what are the stages of business planning

The Business Planning Process: 6 Steps To Creating a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

• Do Your Research
• Calculate Your Financial Forecast
• Draft Your Plan
• Revise & Proofread
• Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. Consider each new step a new project that requires project planning and execution. You may ask yourself the following questions:

• What are your business goals?
• What is the current state of your business?
• What are the current industry trends?
• What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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Other Helpful Business Plan Articles & Templates

How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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The 7 Steps of the Business Planning Process: A Complete Guide

In this article, we'll provide a comprehensive guide to the seven steps of the business planning process, and discuss the role of Strikingly website builder in creating a professional business plan.

Step 1: Conducting a SWOT Analysis

The first step in the business planning process is to conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis will help you understand your business's internal and external environment, and it can help you identify areas of improvement and growth.

Strengths and weaknesses refer to internal factors such as the company's resources, capabilities, and culture. Opportunities and threats are external factors such as market trends, competition, and regulations.

You can conduct a SWOT analysis by gathering information from various sources such as market research, financial statements, and feedback from customers and employees. You can also use tools such as a SWOT matrix to visualize your analysis.

What is a SWOT Analysis?

A SWOT analysis is a framework for analyzing a business's internal and external environment. The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses include internal factors such as the company's resources, capabilities, and culture. Opportunities and threats are external factors such as market trends, competition, and regulations.

A SWOT analysis can help businesses identify areas of improvement and growth, assess their competitive position, and make informed decisions. It can be used for various purposes, such as business planning, product development, marketing strategy, and risk management.

Importance of Conducting a SWOT Analysis

Conducting a SWOT analysis is crucial for businesses to develop a clear understanding of their internal and external environment. It can help businesses identify their strengths and weaknesses and uncover new opportunities and potential threats. By doing so, businesses can make informed decisions about their strategies, resource allocation, and risk management.

A SWOT analysis can also help businesses identify their competitive position in the market and compare themselves to their competitors. This can help businesses differentiate themselves from their competitors and develop a unique value proposition.

Example of a SWOT Analysis

Here is an example of a SWOT analysis for a fictional business that sells handmade jewelry:

• Unique and high-quality products
• Skilled and experienced craftsmen
• Strong brand reputation and customer loyalty
• Strategic partnerships with local boutiques
• Limited production capacity
• High production costs
• Limited online presence
• Limited product variety

Opportunities

• Growing demand for handmade products
• Growing interest in sustainable and eco-friendly products
• Opportunities to expand online presence and reach new customers
• Opportunities to expand product lines
• Increasing competition from online and brick-and-mortar retailers
• Fluctuating consumer trends and preferences
• Economic downturns and uncertainty
• Increased regulations and compliance requirements

This SWOT analysis can help the business identify areas for improvement and growth. For example, the business can invest in expanding its online presence, improving its production efficiency, and diversifying its product lines. The business can also leverage its strengths, such as its skilled craftsmen and strategic partnerships, to differentiate itself from its competitors and attract more customers.

Step 2: Defining Your Business Objectives

Once you have conducted a SWOT analysis, the next step is to define your business objectives. Business objectives are specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with your business's mission and vision.

Your business objectives can vary depending on your industry, target audience, and resources. Examples of business objectives include increasing sales revenue, expanding into new markets, improving customer satisfaction, and reducing costs.

You can use tools such as a goal-setting worksheet or a strategic planning framework to define your business objectives. You can also seek input from your employees and stakeholders to ensure your objectives are realistic and achievable.

What is Market Research?

Market research is an integral part of the business planning process. It gathers information about a target market or industry to make informed decisions. It involves collecting and analyzing data on consumer behavior, preferences, and buying habits, as well as competitors, industry trends, and market conditions.

Market research can help businesses identify potential customers, understand their needs and preferences, and develop effective marketing strategies. It can also help businesses identify market opportunities, assess their competitive position, and make informed product development, pricing, and distribution decisions.

Importance of Market Research in Business Planning

Market research is a crucial component of the business planning process. It can help businesses identify market trends and opportunities, assess their competitive position, and make informed decisions about their marketing strategies, product development, and business operations.

By conducting market research, businesses can gain insights into their target audience's behavior and preferences, such as their purchasing habits, brand loyalty, and decision-making process. This can help businesses develop targeted marketing campaigns and create products that meet their customers' needs.

Market research can also help businesses assess their competitive position and identify gaps in the market. Businesses can differentiate themselves by analyzing their competitors' strengths and weaknesses and developing a unique value proposition.

Different Types of Market Research Methods

Businesses can use various types of market research methods, depending on their research objectives, budget, and time frame. Here are some of the most common market research methods:

Surveys are a common market research method that involves asking questions to a sample of people about their preferences, opinions, and behaviors. Surveys can be conducted through various channels like online, phone, or in-person surveys.

• Focus Groups

Focus groups are a qualitative market research method involving a small group to discuss a specific topic or product. Focus groups can provide in-depth insights into customers' attitudes and perceptions and can help businesses understand the reasoning behind their preferences and behaviors.

Interviews are a qualitative market research method that involves one-on-one conversations between a researcher and a participant. Interviews can be conducted in person, over the phone, or through video conferencing and can provide detailed insights into a participant's experiences, perceptions, and preferences.

• Observation

Observation is a market research method that involves observing customers' behavior and interactions in a natural setting such as a store or a website. Observation can provide insights into customers' decision-making processes and behavior that may not be captured through surveys or interviews.

• Secondary Research

Secondary research involves collecting data from existing sources, like industry reports, government publications, or academic journals. Secondary research can provide a broad overview of the market and industry trends and help businesses identify potential opportunities and threats.

By combining these market research methods, businesses can comprehensively understand their target market and industry and make informed decisions about their business strategy.

Step 3: Conducting Market Research

Market research should always be a part of your strategic business planning. This step gathers information about your target audience, competitors, and industry trends. This information can help you make informed decisions about your product or service offerings, pricing strategy, and marketing campaigns.

There are various market research methods, such as surveys, focus groups, and online analytics. You can also use tools like Google Trends and social media analytics to gather data about your audience's behavior and preferences.

Market research can be time-consuming and costly, but it's crucial for making informed decisions that can impact your business's success. Strikingly website builder offers built-in analytics and SEO optimization features that can help you track your website traffic and audience engagement.

Step 4: Identifying Your Target Audience

Identifying your target audience is essential in the business planning process. Your target audience is the group of people who are most likely to buy your product or service. Understanding their needs, preferences, and behaviors can help you create effective marketing campaigns and improve customer satisfaction.

You can identify your target audience by analyzing demographic, psychographic, and behavioral data. Demographic data include age, gender, income, and education level. Psychographic data includes personality traits, values, and lifestyle. Behavioral data includes buying patterns, brand loyalty, and online engagement.

Once you have identified your target audience, you can use tools such as buyer personas and customer journey maps to create a personalized and engaging customer experience. Strikingly website builder offers customizable templates and designs to help you create a visually appealing and user-friendly website for your target audience.

What is a Target Audience?

A target audience is a group most likely to be interested in and purchase a company's products or services. A target audience can be defined based on various factors such as age, gender, location, income, education, interests, and behavior.

Identifying and understanding your target audience is crucial for developing effective marketing strategies and improving customer engagement and satisfaction. By understanding your target audience's needs, preferences, and behavior, you can create products and services that meet their needs and develop targeted marketing campaigns that resonate with them.

Importance of Identifying Your Target Audience

Identifying your target audience is essential for the success of your business. By understanding your target audience's needs and preferences, you can create products and services that meet their needs and develop targeted marketing campaigns that resonate with them.

Here are reasons why identifying your target audience is important:

• Improve customer engagement. When you understand your target audience's behavior and preferences, you can create a more personalized and engaging customer experience to improve customer loyalty and satisfaction.
• Develop effective marketing strategies. Targeting your marketing efforts to your target audience creates more effective and efficient marketing campaigns that can increase brand awareness, generate leads, and drive sales.
• Improve product development. By understanding your target audience's needs and preferences, you can develop products and services that meet their specific needs and preferences, improving customer satisfaction and retention.
• Identify market opportunities. If you identify gaps in the market or untapped market segments, you can develop products and services to meet unmet needs and gain a competitive advantage.

Examples of Target Audience Segmentation

Here are some examples of target audience segmentation based on different demographic, geographic, and psychographic factors:

• Demographic segmentation. Age, gender, income, education, occupation, and marital status.
• Geographic segmentation. Location, region, climate, and population density.
• Psychographic segmentation. Personality traits, values, interests, and lifestyle.

Step 5: Developing a Marketing Plan

A marketing plan is a strategic roadmap that outlines your marketing objectives, strategies, tactics, and budget. Your marketing plan should align with your business objectives and target audience and include a mix of online and offline marketing channels.

Marketing strategies include content marketing, social media marketing, email marketing, search engine optimization (SEO), and paid advertising. Your marketing tactics can include creating blog posts, sharing social media posts, sending newsletters, optimizing your website for search engines, and running Google Ads or Facebook Ads.

To create an effective marketing plan , research your competitors, understand your target audience's behavior, and set clear objectives and metrics. You can also seek customer and employee feedback to refine your marketing strategy.

Strikingly website builder offers a variety of marketing features such as email marketing, social media integration, and SEO optimization tools. You can also use the built-in analytics dashboard to track your website's performance and monitor your marketing campaign's effectiveness.

What is a Marketing Plan?

A marketing plan is a comprehensive document that outlines a company's marketing strategy and tactics. It typically includes an analysis of the target market, a description of the product or service, an assessment of the competition, and a detailed plan for achieving marketing objectives.

A marketing plan can help businesses identify and prioritize marketing opportunities, allocate resources effectively, and measure the success of their marketing efforts. It can also provide the marketing team with a roadmap and ensure everyone is aligned with the company's marketing goals and objectives.

Importance of a Marketing Plan in Business Planning

A marketing plan is critical to business planning. It can help businesses identify their target audience, assess their competitive position, and develop effective marketing strategies and tactics.

Here are a few reasons why a marketing plan is important in business planning:

• Provides a clear direction. A marketing plan can provide a clear direction for the marketing team and ensure everyone is aligned with the company's marketing goals and objectives.
• Helps prioritize marketing opportunities. By analyzing the target market and competition, a marketing plan can help businesses identify and prioritize marketing opportunities with the highest potential for success.
• Ensures effective resource allocation. A marketing plan can help businesses allocate resources effectively and ensure that marketing efforts are focused on the most critical and impactful activities.
• Measures success. A marketing plan can provide a framework for measuring the success of marketing efforts and making adjustments as needed.

Examples of Marketing Strategies and Tactics

Here are some examples of marketing strategies and tactics that businesses can use to achieve their marketing objectives:

• Content marketing. Creating and sharing valuable and relevant content that educates and informs the target audience about the company's products or services.
• Social media marketing. Leveraging social media platforms like Facebook, Twitter, and Instagram to engage with the target audience, build brand awareness, and drive website traffic.
• Search engine optimization (SEO). Optimizing the company's website and online content to rank higher in search engine results and drive organic traffic.
• Email marketing. Sending personalized and targeted emails to the company's email list to nurture leads, promote products or services, and drive sales.
• Influencer marketing. Partnering with influencers or industry experts to promote the company's products or services and reach a wider audience.

By using a combination of these marketing strategies and tactics, businesses can develop a comprehensive and effective marketing plan that aligns with their marketing goals and objectives.

Step 6: Creating a Financial Plan

A financial plan is a detailed document that outlines your business's financial projections, budget, and cash flow. Your financial plan should include a balance sheet, income statement, and cash flow statement, and it should be based on realistic assumptions and market trends.

To create a financial plan, you should consider your revenue streams, expenses, assets, and liabilities. You should also analyze your industry's financial benchmarks and projections and seek input from financial experts or advisors.

.jpg)Image taken from Strikingly Templates

Strikingly website builder offers a variety of payment and e-commerce features, such as online payment integration and secure checkout. You can also use the built-in analytics dashboard to monitor your revenue and expenses and track your financial performance over time.

What is a Financial Plan?

A financial plan is a comprehensive document that outlines a company's financial goals and objectives and the strategies and tactics for achieving them. It typically includes a description of the company's financial situation, an analysis of revenue and expenses, and a projection of future financial performance.

A financial plan can help businesses identify potential risks and opportunities, allocate resources effectively, and measure the success of their financial efforts. It can also provide a roadmap for the finance team and ensure everyone is aligned with the company's financial goals and objectives.

Importance of Creating a Financial Plan in Business Planning

Creating a financial plan is a critical component of the business planning process. It can help businesses identify potential financial risks and opportunities, allocate resources effectively, and measure the success of their financial efforts.

Here are some reasons why creating a financial plan is important in business planning:

• Provides a clear financial direction. A financial plan can provide a clear direction for the finance team and ensure everyone is in sync with the company's financial goals and objectives.
• Helps prioritize financial opportunities. By analyzing revenue and expenses, a financial plan can help businesses identify and prioritize financial opportunities with the highest potential for success.
• Ensures effective resource allocation. A financial plan can help businesses allocate resources effectively and ensure that financial efforts are focused on the most critical and impactful activities.
• Measures success. A financial plan can provide a framework for measuring the success of financial efforts and making adjustments as needed.

Examples of Financial Statements and Projections

Here are some examples of financial statements and projections that businesses can use in their financial plan:

• Income statement. A financial statement that shows the company's revenue and expenses over a period of time, typically monthly or annually.
• Balance sheet. A financial statement shows the company's assets, liabilities, and equity at a specific time, typically at the end of a fiscal year.
• Cash flow statement. A financial statement that shows the company's cash inflows and outflows over a period of time, typically monthly or annually.
• Financial projections. Forecasts of the company's future financial performance based on assumptions and market trends. This can include revenue, expenses, profits, and cash flow projections.

Step 7: Writing Your Business Plan

The final step in the business planning process is to write your business plan. A business plan is a comprehensive document that outlines your business's mission, vision, objectives, strategies, and financial projections.

A business plan can help you clarify your business idea, assess the feasibility of your business, and secure funding from investors or lenders. It can also provide a roadmap for your business and ensure that you stay focused on your goals and objectives.

Importance of Writing a Business Plan

Writing a business plan is an essential component of the business planning process. It can help you clarify your business idea , assess the feasibility of your business, and secure funding from investors or lenders.

Here are some reasons why writing a business plan is important:

• Clarifies your business idea. Writing a business plan can help you clarify your business idea and understand your business's goals, objectives, and strategies.
• Assesses the feasibility of your business. A business plan can help you assess the feasibility of your business and identify potential risks and opportunities.
• Secures funding. A well-written business plan can help you secure funding from investors or lenders by demonstrating the potential of your business and outlining a clear path to success.
• Provides a roadmap for your business. A business plan can provide a roadmap and ensure that you stay focused on your goals and objectives.

Tips on How to Write a Successful Business Plan

Here are some tips on how to write a business plan successfully:

• Start with an executive summary. The executive summary is a brief business plan overview and should include your business idea, target market, competitive analysis, and financial projections.
• Describe your business and industry. Provide a detailed description of your business and industry, including your products or services, target market, and competitive landscape.
• Develop a marketing strategy. Outline your marketing strategy and tactics, including your target audience, pricing strategy, promotional activities, and distribution channels.
• Provide financial projections. Provide detailed financial projections, including income statements, balance sheets, and cash flow statements, as well as assumptions and risks.
• Keep it concise and clear. Keep your business plan concise and clear, and avoid using jargon or technical terms that may confuse or intimidate readers.

Role of Strikingly Website Builder in Creating a Professional Business Plan

Strikingly website builder can play a significant role in creating a professional business plan. Strikingly provides an intuitive and user-friendly platform that allows you to create a professional-looking website and online store without coding or design skills.

Using Strikingly, you can create a visually appealing business plan and present it on your website with images, graphics, and videos to enhance the reader's experience. You can also use Strikingly's built-in templates and a drag-and-drop editor to create a customized and professional-looking business plan that reflects your brand and style.

Strikingly also provides various features and tools that can help you showcase your products or services, promote your business, and engage with your target audience. These features include e-commerce functionality, social media integration, and email marketing tools.

Let’s Sum Up!

In conclusion, the 7 steps of the business planning process are essential for starting and growing a successful business. By conducting a SWOT analysis, defining your business objectives, conducting market research, identifying your target audience, developing a marketing plan, creating a financial plan, and writing your business plan, you can set a solid foundation for your business's success.

Strikingly website builder can help you throughout the business planning process by offering a variety of features such as analytics, marketing, e-commerce , and business plan templates. With Strikingly, you can create a professional and engaging website and business plan that aligns with your business objectives and target audience.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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Business Planning

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on June 08, 2023

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Table of contents, what is business planning.

Business planning is a crucial process that involves creating a roadmap for an organization to achieve its long-term objectives. It is the foundation of every successful business and provides a framework for decision-making, resource allocation, and measuring progress towards goals.

Business planning involves identifying the current state of the organization, determining where it wants to go, and developing a strategy to get there.

It includes analyzing the market, identifying target customers, determining a competitive advantage, setting financial goals, and establishing operational plans.

The business plan serves as a reference point for all stakeholders , including investors, employees, and partners, and helps to ensure that everyone is aligned and working towards the same objectives.

Importance of Business Planning

Business planning plays a critical role in the success of any organization, as it helps to establish a clear direction and purpose for the business. It allows the organization to identify its goals and objectives, develop strategies and tactics to achieve them, and establish a framework of necessary resources and operational procedures to ensure success.

Additionally, a well-crafted business plan can serve as a reference point for decision-making, ensuring that all actions taken by the organization are aligned with its long-term objectives.

It can also facilitate communication and collaboration among team members, ensuring that everyone is working towards a common goal.

Furthermore, a business plan is often required when seeking funding or investment from external sources, as it demonstrates the organization's potential for growth and profitability. Overall, business planning is essential for any organization looking to succeed and thrive in a competitive market.

Business Planning Process

Step 1: defining your business purpose and goals.

Begin by clarifying your business's purpose, mission, and long-term goals. These elements should align with the organization's core values and guide every aspect of the planning process.

Step 2: Conducting Market Research and Analysis

Thorough market research and analysis are crucial to understanding the industry landscape, identifying target customers, and gauging the competition. This information will inform your business strategy and help you find your niche in the market.

Step 3: Creating a Business Model and Strategy

Based on the insights from your market research, develop a business model that outlines how your organization will create, deliver, and capture value. This will inform the overall business strategy, including identifying target markets, value propositions, and competitive advantages.

Step 4: Developing a Marketing Plan

A marketing plan details how your organization will promote its products or services to target customers. This includes defining marketing objectives, tactics, channels, budgets, and performance metrics to measure success.

Step 5: Establishing Operational and Financial Plans

The operational plan outlines the day-to-day activities, resources, and processes required to run your business. The financial plan projects revenue, expenses, and cash flow, providing a basis for assessing the organization's financial health and long-term viability.

Step 6: Reviewing and Revising the Business Plan

Regularly review and update your business plan to ensure it remains relevant and reflects the organization's current situation and goals. This iterative process enables proactive adjustments to strategies and tactics in response to changing market conditions and business realities.

Components of a Business Plan

Executive summary.

The executive summary provides a high-level overview of your business plan, touching on the company's mission, objectives, strategies, and key financial projections.

It is critical to make this section concise and engaging, as it is often the first section that potential investors or partners will read.

Company Description

The company description offers a detailed overview of your organization, including its history, mission, values, and legal structure. It also outlines the company's goals and objectives and explains how the business addresses a market need or problem.

Products or Services

Describe the products or services your company offers, emphasizing their unique features, benefits, and competitive advantages. Detail the development process, lifecycle, and intellectual property rights, if applicable.

Market Analysis

The market analysis section delves into the industry, target market, and competition. It should demonstrate a thorough understanding of market trends, growth potential, customer demographics, and competitive landscape.

Marketing and Sales Strategy

Outline your organization's approach to promoting and selling its products or services. This includes marketing channels, sales tactics, pricing strategies, and customer relationship management .

Management and Organization

This section provides an overview of your company's management team, including their backgrounds, roles, and responsibilities. It also outlines the organizational structure and any advisory or support services employed by the company.

Operational Plan

The operational plan describes the day-to-day operations of your business, including facilities, equipment, technology, and personnel requirements. It also covers supply chain management, production processes, and quality control measures.

Financial Plan

The financial plan is a crucial component of your business plan, providing a comprehensive view of your organization's financial health and projections.

This section should include income statements , balance sheets , cash flow statements , and break-even analysis for at least three to five years. Be sure to provide clear assumptions and justifications for your projections.

Appendices and Supporting Documents

The appendices and supporting documents section contains any additional materials that support or complement the information provided in the main body of the business plan. This may include resumes of key team members, patents , licenses, contracts, or market research data.

Benefits of Business Planning

Helps secure funding and investment.

A well-crafted business plan demonstrates to potential investors and lenders that your organization is well-organized, has a clear vision, and is financially viable. It increases your chances of securing the funding needed for growth and expansion.

Provides a Roadmap for Growth and Success

A business plan serves as a roadmap that guides your organization's growth and development. It helps you set realistic goals, identify opportunities, and anticipate challenges, enabling you to make informed decisions and allocate resources effectively.

Enables Effective Decision-Making

Having a comprehensive business plan enables you and your management team to make well-informed decisions, based on a clear understanding of the organization's goals, strategies, and financial situation.

Facilitates Communication and Collaboration

A business plan serves as a communication tool that fosters collaboration and alignment among team members, ensuring that everyone is working towards the same objectives and understands the organization's strategic direction.

Business planning should not be a one-time activity; instead, it should be an ongoing process that is continually reviewed and updated to reflect changing market conditions, business realities, and organizational goals.

This dynamic approach to planning ensures that your organization remains agile, responsive, and primed for success.

As the business landscape continues to evolve, organizations must embrace new technologies, methodologies, and tools to stay competitive.

The future of business planning will involve leveraging data-driven insights, artificial intelligence, and predictive analytics to create more accurate and adaptive plans that can quickly respond to a rapidly changing environment.

By staying ahead of the curve, businesses can not only survive but thrive in the coming years.

Business Planning FAQs

What is business planning, and why is it important.

Business planning is the process of setting goals, outlining strategies, and creating a roadmap for your company's future. It's important because it helps you identify opportunities and risks, allocate resources effectively, and stay on track to achieve your goals.

What are the key components of a business plan?

A business plan typically includes an executive summary, company description, market analysis, organization and management structure, product or service line, marketing and sales strategies, and financial projections.

How often should I update my business plan?

It is a good idea to review and update your business plan annually, or whenever there's a significant change in your industry or market conditions.

What are the benefits of business planning?

Effective business planning can help you anticipate challenges, identify opportunities for growth, improve decision-making, secure financing, and stay ahead of competitors.

Do I need a business plan if I am not seeking funding?

Yes, even if you're not seeking funding, a business plan can be a valuable tool for setting goals, developing strategies, and keeping your team aligned and focused on achieving your objectives.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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The 4 Phases Needed to Develop a Successful Business Plan

David Gordon

• January 5, 2021
• Type Articles

As they say in the military, “The enemy has a say.” The key to winning is adjusting. In 2021, expect COVID-19 will continue to impact the first half of the year, while the second half could represent different opportunities. Further, a new presidential administration, with its new initiatives, could impact your market looking toward 2022 and 2023.

This is where business planning comes into play.

Planning is about understanding the landscape, knowing what you want to achieve and then determining how to achieve it. It requires gathering information to understand your environment; determining current deployment; resources; where you can solicit assistance and then determining what you need to do (or procure) to give your team the resources needed to achieve the goal. Then, it is all about execution – developing a plan to achieve your future goals.

The phases of developing a plan include:

1. Introspection, Research & Insights

2. idea generation, 3. aggregation & execution, 4. ongoing evaluation and refinement.

While it sounds comprehensive, and it can be, it can also be streamlined. It all depends upon your organization, style and, if you use an outside facilitator, their ability to ask the right questions, understand your business/industry and add ideas.

This first step is critical. It is about gathering information: quantitative information and qualitative insights.

This can comprise macroeconomic information, marketplace information, industry insights and data analysis. The goal is to have a sense of where the economy and market are going while understanding your strengths, weaknesses, opportunities, and threats (SWOT), which comes from information gathering.

Understand your relationship with your market, your company, your customers, and the potential of each. Data can deliver these insights. Internal business intelligence data, combined with external economic data, can be powerful tools.

Some additional areas to consider include:

• Do you “plan” expecting today’s COVID-19 environment or a different one? For how long?
• What is your expectation of the market? Future macro trends and the potential opportunities that they can create? For example, how will the new presidential administration’s likely focus on clean energy and the climate impact your markets?
• How have your processes been impacted?
• More importantly, how are customers and their customers being impacted? What are their new expectations? What is their outlook?
• What is your staff’s input?

As part of this process, “customer” insights can be beneficial. This should be 360-degree input. From end-customers/contractors, distributors (if you are a manufacturer), salespeople (and reps/RSMs), perhaps even employees or suppliers. Ask their opinion about the market, their opportunities, how “you” can improve and more. Those who contribute want you to succeed.

Next, ask departments how they can improve. How can “you/they” be easier to do business with? What additional value can each bring to their customers? What processes need to be improved? How can utilization, and productivity, increase? What is their value proposition, and the company’s, today and what could it be?

If you are in sales, the issues are the same, but focus on their goals and account package. Where are customer needs? Where are they going? What is your value proposition, according to your sales organization? How can you generate more? What do you need to be successful (or, more importantly, what does your company need to do to be more successful with your customers/in your territory?)

Ask what is important for account retention as well as for taking share. Then prioritize.

It is about asking for information, seeking opportunities, developing ideas, changing models and anticipating the future, becoming knowledgeable. Going into 2021, many companies will be more conservative with investments and will seek to reallocate funding. Focus and enhancing models will be critical. Opportunities abound.

Once you have gathered information and know the current and projected state, the next phase is identifying what strategies you want to continue. Conduct an idea generation exercise to determine what’s next.

This brainstorming exercise helps identify what new strategies will emerge. Consider what competitors are doing. Look at distributors/manufacturers in other industries or markets. Ask customers what would be of benefit to them.

Next it is about aggregating the ideas, developing a project plan and calendaring the activities to ensure time implementation.

For some initiatives, you may want advance time to present the strategy to your key suppliers or distributors to gather their input, or perhaps get their buy-in. For distributors, remember your 2021 earned co-op funds will probably decline, as they are based upon 2020 performance.

Gather the thoughts, determine the feasibility, gain budgetary insight and then prioritize. Inevitably, you cannot do everything. Every company is, at some point, resource-constrained.

An area that is challenging for most companies is ongoing evaluation of strategy with periodic reviews that allow the company to refine its strategy. It is like taking a road trip and finding out that there is construction on a segment of the highway. You can slow down or consider a detour/alternate route that enables you to continue. Adjustments are needed in plans. The key is achieving the end goal within the defined timeframe.

Reporting these metrics to various stakeholders also helps earn buy-in for future initiatives.

Strategic planning is a commitment to intentionally succeed. It is a leadership decision that reinforces to your staff that the company has a roadmap to achieve success and is committed to profitable growth. Involving your team helps develop a better “product” as well as earns their buy-in to the strategy, to implementation and to success.

Planning can be a process, or it can be a workshop. The key is, have a plan so you can be intentional in your actions.

David Gordon is president of Channel Marketing Group, a distribution strategy and marketing consulting firm helping distributors, manufacturers and representatives in the industrial and construction industries generate insights and ideas to drive growth. For more information on Channel Marketing Group, visit channelmkt.com . Reach Gordon at [email protected] . 

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Business Planning Process: Create a Business Plan That Works

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Radhika Agarwal

• December 15, 2023

If you are planning to start or grow your business, you might have heard about the importance of the business planning process countless times. And yes, it is necessary to have a plan. After all, it’ll be your roadmap to success.

But how would you go about it? Where will you start? And most importantly is there a tried and tested process that can make your job easier? What if we told you there is such a process?

And through this article, we’ll walk you through everything from what is business planning to the steps of the business planning process .

What is Business Planning?

Business planning is the process of giving structure to your business idea. It acts as a roadmap to your business journey, helps you get through obstacles, and maximizes opportunities.

It also helps you set realistic goals and pursue the same with a structured action plan.

Moreover, through a business plan, you can analyze your company’s strengths and weaknesses, and understand how that would impact your company while dealing with market competition and how your strengths would help you achieve your goal.

Above all, doing business with a well-written business plan increases your chances of success.

Steps of the Business Planning Process

Although there’s no sole right way to go about the process of planning your business, here’s a compilation of steps that’ll make your planning process faster and easier.

1. Carry out your research

The first step to creating a business plan is to do thorough research about the business and industry you are trying to get into. Tap into all the information you can get about your target audience, potential customer base, competitors, market and industry trends, cost of business, etc.

You can give a form to your research by asking yourself the following questions:

• What are your goals?
• Where does your business stand currently?
• What are the prevailing market trends?
• What strategies is your competitor following?

You can find your answers by conducting market surveys, talking to customers and industry experts, designing good questionnaires, reading articles, blogs, and news updates about your industry and related ones, and so on.

Also, it is a good practice to conduct a SWOT analysis for your company to understand how your company’s strengths and weaknesses would help you stand apart from your competitors based on the current market statistics.

2. Make a Framework

Once you’re done with your research the next step is to make a framework or a set of strategies for your business based on your research and business goals. You can either design strategies from scratch or reframe previously tried and tested successful strategies to fit your business goals.

But remember that you’ll have to tweak strategies to fit your unique competitive advantages and goals. Hence, strategies that are already being used can act as a good foundation, but it is essential to remember that you’ll have to expand upon them or improvise them for your business.

This step can be completed by taking a deep dive into your customer’s buying motivations and challenges that your product can help solve. Based on that, make a marketing plan, operations plan, and cost structure for your business at least for the first few years of your business.

3. Formulate your Financial Forecasts

No matter how tedious finances might seem, they are an integral part of any business. When you map out your finances it is essential to note down all the costs you’ll incur as you grow and run your business for the next five years and what would be your potential revenue, and if or not it would leave room for profit.

You can get your financial forecast by adding your financial assumptions to a financial system which will give you your cash flow statements and give you an idea of what amount of funds you’ll need to start and run your business for the first year.

This step is especially helpful if you want to acquire funding for your business. Nonetheless, it helps you prepare to deal with the financial aspects of your business.

A financial statement essentially provides details of a company’s expenses and profits. It also provides an overview of the company’s current financial stance, including its assets and liabilities.

Through this section try to write down and explain how you plan to use your investments and how would the same give a return.

4. Draft a Plan

As you’re done with creating business strategies and planning your finances, it is time to draft your business plan and compile everything into a single document. As you are done with all the technical aspects, this step should feel relatively easy.

But if you need help drafting a business plan and making it look presentable, you can subscribe to business plan software that comes with predesigned templates and tools to make your work easier .

5. Recheck and Improvise

Now as you’re done with writing your plan, it is a good idea to give it enough time to edit it. Check for any unclear sentences, irrelevant phrases, or confusing terms.

Take suggestions from your team members who are familiar with the functioning of your business. Finally, proofread for any grammar or punctuation errors. One of the most popular and useful pieces of editing advice is to put your work aside for a while and then look at it with fresh eyes to edit it better.

6. Create an Impressive Business Plan Presentation

Now, as you’re done with writing your business plan, it is time to create a presentation that leaves an excellent impression on your audience. Highlight all the important and relevant points.

Also, add references for your investors like your financial reports , resumes of your key team members, snippets of your marketing plan, and past sales reports to have a well-rounded presentation.

It is true that starting a business is intimidating. It includes a bunch of emotions, chaotic ideas, and a will to take risks. (Risks are a part and parcel of starting a business, no matter how much you plan, but yes planning helps you prepare for it.) But in the end, all of us know that all of it is worth it if you have a profitable business in the end.

And business planning is something that takes you one step closer to your idea of success. Moreover, a plan keeps you going in the face of challenges and adversities, and helps you push yourself a little harder to achieve your dreams when things get tougher.

Above all, a business plan helps you take action and turn ideas into a real and functioning business. So, what are you waiting for? Go ahead and start planning !

And while you’re at it, to check out Upmetrics’s business planning software to make business planning easier and faster.

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About the Author

Radhika is an economics graduate and likes to read about every subject and idea she comes across. Apart from that she can discuss her favorite books to lengths( to the point you\'ll start feeling a little annoyed) and spends most of her free time on Google word coach.

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

Published: June 28, 2024

Years ago, I had an idea to launch a line of region-specific board games. I knew there was a market for games that celebrated local culture and heritage. I was so excited about the concept and couldn't wait to get started.

But my idea never took off. Why? Because I didn‘t have a plan. I lacked direction, missed opportunities, and ultimately, the venture never got off the ground.

And that’s exactly why a business plan is important. It cements your vision, gives you clarity, and outlines your next step.

In this post, I‘ll explain what a business plan is, the reasons why you’d need one, identify different types of business plans, and what you should include in yours.

Table of Contents

What is a business plan?

What is a business plan used for.

• Business Plan Template [Download Now]

Purposes of a Business Plan

What does a business plan need to include, types of business plans.

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A business plan is a comprehensive document that outlines a company's goals, strategies, and financial projections. It provides a detailed description of the business, including its products or services, target market, competitive landscape, and marketing and sales strategies. The plan also includes a financial section that forecasts revenue, expenses, and cash flow, as well as a funding request if the business is seeking investment.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

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17.2 The Planning Process

• Outline the planning and controlling processes.

Planning is a process. Ideally it is future oriented, comprehensive, systematic, integrated, and negotiated. 11 It involves an extensive search for alternatives and analyzes relevant information, is systematic in nature, and is commonly participative. 12 The planning model described in this section breaks the managerial function of planning into several steps, as shown in Exhibit 17.3 . Following this step-by-step procedure helps ensure that organizational planning meets these requirements.

Step 1: Developing an Awareness of the Present State

According to management scholars Harold Koontz and Cyril O’Donnell, the first step in the planning process is awareness. 13 It is at this step that managers build the foundation on which they will develop their plans. This foundation specifies an organization’s current status, pinpoints its commitments, recognizes its strengths and weaknesses, and sets forth a vision of the future. Because the past is instrumental in determining where an organization expects to go in the future, managers at this point must understand their organization and its history. It has been said—“The further you look back, the further you can see ahead.” 14

Step 2: Establishing Outcome Statements

The second step in the planning process consists of deciding “where the organization is headed, or is going to end up.” Ideally, this involves establishing goals. Just as your goal in this course might be to get a certain grade, managers at various levels in an organization’s hierarchy set goals. For example, plans established by a university’s marketing department curriculum committee must fit with and support the plans of the department, which contribute to the goals of the business school, whose plans must, in turn, support the goals of the university. Managers therefore develop an elaborate network of organizational plans, such as that shown in Exhibit 17.4 , to achieve the overall goals of their organization.

Goal vs. Domain Planning

Outcome statements can be constructed around specific goals or framed in terms of moving in a particular direction toward a viable set of outcomes. In goal planning , people set specific goals and then create action statements. 15 For example, freshman Kristin Rude decides that she wants a bachelor of science degree in biochemistry (the goal). She then constructs a four-year academic plan that will help her achieve this goal. Kristin is engaging in goal planning. She first identifies a goal and then develops a course of action to realize her goal.

Another approach to planning is domain/directional planning , in which managers develop a course of action that moves an organization toward one identified domain (and therefore away from other domains). 16 Within the chosen domain may lie a number of acceptable and specific goals. For example, high-school senior Neil Marquardt decides that he wants to major in a business-related discipline in college. During the next four years, he will select a variety of courses from the business school curriculum yet never select a major. After selecting courses based on availability and interest, he earns a sufficient number of credits within this chosen domain that enables him to graduate with a major in marketing. Neil never engaged in goal planning, but in the end he will realize one of many acceptable goals within an accepted domain.

The development of the Post-it® product by the 3M Corporation demonstrates how domain planning works. In the research laboratories at 3M, efforts were being made to develop new forms and strengths of cohesive substances. One result was cohesive material with no known value because of its extremely low cohesive level. A 3M division specialist, Arthur L. Fry, frustrated by page markers falling from his hymn book in church, realized that this material, recently developed by Spencer F. Silver, would stick to paper for long periods and could be removed without destroying the paper. Fry experimented with the material as page markers and note pads—out of this came the highly popular and extremely profitable 3M product Scotch Post-it®. Geoff Nicholson, the driving force behind the Post-it® product, comments that rather than get bogged down in the planning process, innovations must be fast-tracked and decisions made whether to continue or move on early during the product development process. 17

Situations in which managers are likely to engage in domain planning include (1) when there is a recognized need for flexibility, (2) when people cannot agree on goals, (3) when an organization’s external environment is unstable and highly uncertain, and (4) when an organization is starting up or is in a transitional period. In addition, domain planning is likely to prevail at upper levels in an organization, where managers are responsible for dealing with the external environment and when task uncertainty is high. Goal planning (formulating goals compatible with the chosen domain) is likely to prevail in the technical core, where there is less uncertainty.

Hybrid Planning

Occasionally, coupling of domain and goal planning occurs, creating a third approach, called hybrid planning . In this approach, managers begin with the more general domain planning and commit to moving in a particular direction. As time passes, learning occurs, uncertainty is reduced, preferences sharpen, and managers are able to make the transition to goal planning as they identify increasingly specific targets in the selected domain. Movement from domain planning to goal planning occurs as knowledge accumulates, preferences for a particular goal emerge, and action statements are created.

Consequences of Goal, Domain, and Hybrid Planning

Setting goals not only affects performance directly, but also encourages managers to plan more extensively. That is, once goals are set, people are more likely to think systematically about how they should proceed to realize the goals. 18 When people have vague goals, as in domain planning, they find it difficult to draw up detailed action plans and are therefore less likely to perform effectively. When studying the topic of motivation, you will learn about goal theory. Research suggests that goal planning results in higher levels of performance than does domain planning alone. 19

Step 3: Premising

In this step of the planning process, managers establish the premises, or assumptions, on which they will build their action statements. The quality and success of any plan depends on the quality of its underlying assumptions. Throughout the planning process, assumptions about future events must be brought to the surface, monitored, and updated. 20

Managers collect information by scanning their organization’s internal and external environments. They use this information to make assumptions about the likelihood of future events. As Kristin considers her four-year pursuit of her biochemistry major, she anticipates that in addition to her savings and funds supplied by her parents, she will need a full-time summer job for two summers in order to cover the cost of her undergraduate education. Thus, she includes finding full-time summer employment between her senior year of high school and her freshman year and between her freshman and sophomore years of college as part of her plan. The other two summers she will devote to an internship and finding postgraduate employment—much to mom and dad’s delight! Effective planning skills can be used throughout your life. The plan you develop to pay for and complete your education is an especially important one.

Step 4: Determining a Course of Action (Action Statements)

In this stage of the planning process, managers decide how to move from their current position toward their goal (or toward their domain). They develop an action statement that details what needs to be done, when, how, and by whom. The course of action determines how an organization will get from its current position to its desired future position. Choosing a course of action involves determining alternatives by drawing on research, experimentation, and experience; evaluating alternatives in light of how well each would help the organization reach its goals or approach its desired domain; and selecting a course of action after identifying and carefully considering the merits of each alternative.

Step 5: Formulating Supportive Plans

The planning process seldom stops with the adoption of a general plan. Managers often need to develop one or more supportive or derivative plans to bolster and explain their basic plan. Suppose an organization decides to switch from a 5-day, 40-hour workweek (5/40) to a 4-day, 40-hour workweek (4/40) in an attempt to reduce employee turnover. This major plan requires the creation of a number of supportive plans. Managers might need to develop personnel policies dealing with payment of daily overtime. New administrative plans will be needed for scheduling meetings, handling phone calls, and dealing with customers and suppliers.

Planning, Implementation, and Controlling

After managers have moved through the five steps of the planning process and have drawn up and implemented specific plans, they must monitor and maintain their plans. Through the controlling function (to be discussed in greater detail later in this chapter), managers observe ongoing human behavior and organizational activity, compare it to the outcome and action statements formulated during the planning process, and take corrective action if they observe unexpected and unwanted deviations. Thus, planning and controlling activities are closely interrelated (planning ➨ controlling ➨ planning . . .). Planning feeds controlling by establishing the standards against which behavior will be evaluated during the controlling process. Monitoring organizational behavior (the control activity) provides managers with input that helps them prepare for the upcoming planning period—it adds meaning to the awareness step of the planning process.

Influenced by total quality management (TQM) and the importance of achieving continuous improvement in the processes used, as well as the goods and services produced, organizations such as IBM-Rochester have linked their planning and controlling activities by adopting the Deming cycle (also known as the Shewhart cycle).

It has been noted on numerous occasions that many organizations that do plan fail to recognize the importance of continuous learning. Their plans are either placed on the shelf and collect dust or are created, implemented, and adhered to without a systematic review and modification process. Frequently, plans are implemented without first measuring where the organization currently stands so that future comparisons and evaluations of the plan’s effectiveness cannot be determined. The Deming cycle , shown in Exhibit 17.6 , helps managers assess the effects of planned action by integrating organizational learning into the planning process. The cycle consists of four key stages: (1) Plan—create the plan using the model discussed earlier. (2) Do—implement the plan. (3) Check—monitor the results of the planned course of action; organizational learning about the effectiveness of the plan occurs at this stage. (4) Act—act on what was learned, modify the plan, and return to the first stage in the cycle, and the cycle begins again as the organization strives for continuous learning and improvement.

Concept Check

• What are the five steps in the planning process?
• What is the difference between goal, domain, and hybrid planning?
• How are planning, implementation, and controlling related?

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/principles-management/pages/1-introduction

• Authors: David S. Bright, Anastasia H. Cortes
• Publisher/website: OpenStax
• Book title: Principles of Management
• Publication date: Mar 20, 2019
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-management/pages/1-introduction
• Section URL: https://openstax.org/books/principles-management/pages/17-2-the-planning-process

© Jan 9, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

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• What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

Related resources

15 creative elevator pitch examples for every scenario

How Asana streamlines strategic planning with work management

How to create a CRM strategy: 6 steps (with examples)

What is management by objectives (MBO)?

Bigger Bottom Line

What are the 4 stages of business planning?

Are you a small business owner feeling overwhelmed by the thought of creating a business plan? Don’t worry, you’re not alone. Many entrepreneurs find the idea of planning intimidating, but it doesn’t have to be. The truth is, effective business planning is an iterative process that evolves as your business grows. By breaking it down into four key stages, you can create a roadmap that will guide your decision-making and help you achieve your goals.

But before we dive into the stages, let’s address a common objection: “Why do I need a business plan? Can’t I just wing it?” While it’s true that some business owners succeed without a formal plan, having one can significantly increase your chances of success. A well-crafted plan not only helps you clarify your vision and strategy but also serves as a valuable tool for attracting investors, securing financing, and keeping your team aligned.

Stage 1: Initial Planning and Research

The first stage of business planning is all about laying the foundation. In this phase, you’ll conduct market research, analyze your competition, and gather insights about your target audience. This crucial step will help you identify opportunities, assess risks, and determine the viability of your business idea.

During this stage, you’ll also define your unique value proposition – what sets your business apart from others in the market. Additionally, you’ll want to outline your business model, including your products or services, pricing strategy, and revenue streams.

Stage 2: Strategic Planning

With a solid understanding of the market and your business idea, you’ll move on to strategic planning. This stage involves setting clear goals and objectives for your business, both short-term and long-term. You’ll also develop strategies for achieving those goals, considering factors such as marketing, operations, and financial projections.

One crucial aspect of strategic planning is identifying your target market and developing a comprehensive marketing plan. This plan should outline how you’ll reach and engage your ideal customers, whether through digital marketing, traditional advertising, or other tactics.

Stage 3: Operational Planning

In the third stage, you’ll focus on the nitty-gritty details of how your business will operate on a day-to-day basis. This includes everything from staffing and management structures to supply chain management and inventory control.

During this stage, you’ll also need to consider legal and regulatory requirements, such as obtaining necessary licenses and permits, and ensuring compliance with relevant laws and regulations.

Stage 4: Financial Planning and Projections

The final stage of business planning revolves around finances. Here, you’ll develop detailed financial projections, including income statements, balance sheets, and cash flow statements. These projections will help you understand your funding requirements, plan for growth, and make informed decisions about investments and expenditures.

Additionally, this stage involves securing financing, whether through traditional lenders, investors, or alternative funding sources. A solid financial plan will not only increase your chances of obtaining financing but also help you manage your resources effectively once your business is up and running.

As you navigate these four stages, remember that business planning is an ongoing process. Your plan should be a living document that evolves as your business grows and as market conditions change. Regularly review and update your plan to ensure it remains relevant and aligned with your goals.

In conclusion, effective business planning is essential for small business owners who want to increase their chances of success. By breaking it down into four stages – initial planning and research, strategic planning, operational planning, and financial planning and projections – you can create a comprehensive roadmap that will guide your decision-making and help you achieve your entrepreneurial dreams.

Looking for more small business help? See our article on The Crucial Areas of a Small Business

5 Fundamental Principles of Business Planning

4 min. read

Updated May 10, 2024

I’ve been doing business planning professionally since the 1980s. It’s changed a lot.

These days, I very much advocate the one-page business plan for managing all businesses and all business owners, regardless of whether or not you need the full formal traditional business plan used for seeking investment or business loans.  

What I recommend for real business planning has changed a lot over the decades, but these five fundamental business planning principles have remained constant.

1. Do only what you’ll use

Lean business means avoiding waste and doing only what has value.

Therefore, the right form for your business plan is the form that best serves your business purpose. Furthermore, for the vast majority of business owners, the purpose of planning is getting what they want from the business—setting strategy and tactics, executing, reviewing results, and revising as needed.

That purpose is best served with growth planning that starts with a one-page plan and continues with a planning process involving regular review and revision.

You keep it lean because that’s easier, better, and really all you’re going to use.

2. It’s a continuous process, not just a plan

With growth planning, your business plan is always a fresh, current version. You never finish a business plan, heave a sigh of relief, and congratulate yourself that you’ll never have to do that again. You don’t use it once and throw it away.

You don’t store it in a drawer to gather dust.

The PRRR cycle in growth planning

However, this kind of regularly updated planning is clearly better for business than a more static elaborate business plan. With growth planning, the plan is smaller and streamlined, so you can update it easily and often, at least once a month.

Your plan is much more useful than a static plan because it is always current, tracked and reviewed, frequently revised, and a valuable tool for managing.

• You run your business according to priorities.
• Your tactics match your strategy.
• Your specific business activities match your tactics.
• And accountability is part of the process.

The team is aware of the performance metrics, milestones, and progress, or lack thereof. Things get done.

Furthermore, even in the old days of elaborate business plans, it was always true that a good business plan was never done. I’ve been pointing that out in published books, magazine articles, and blog posts since the 1980s.

That’s not new with growth planning. It’s just more important and more obvious than ever before.

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• 3. It assumes constant change

One of the strongest and most pervasive myths about planning is dead wrong: planning doesn’t reduce flexibility. It builds flexibility. Growth planning manages change. It is not threatened by change.

People say, “ Why would I do a business plan? That just locks me in. It’s a straitjacket.”

And I say: wrong. Never do something just because it’s in the plan. There is no merit whatsoever in sticking to a plan just for the plan’s sake. You never plan to run yourself into a brick wall over and over.

Instead, understand that the plan relates long-term to short-term, sales to costs and expenses and cash flow, marketing to sales, and lots of other interdependencies in the business.

When things change—and they always do—the plan helps you keep track of what affects what else so you can adjust accordingly.

• 4. It empowers accountability

It is easier to be friends with your coworkers than to manage them well. Every small business owner suffers from the problem of management and accountability.

Growth planning sets clear expectations and then follows up on results. It compares results with expectations.

People on a team are held accountable only if management actually tracks results and communicates them to those responsible after the fact.

5. It’s planning, not accounting

One of the most common errors in business planning is confusing planning with accounting. This is true for growth planning too.

Although your projections look like accounting statements, they are just projections. They are always going to be off one way or another, and their purpose isn’t guessing the future exactly right but rather setting expectations and connecting the links between spending and revenue.

Then when you do your monthly reviews, having made the original projection makes adjustments easier.

They are two different dimensions.

Accounting goes from today backward in time in ever-increasing detail. Planning, on the other hand, goes forward into the future in ever-increasing summary and aggregation.

• How these principles apply to growth planning

All five of these principles apply to all business planning, not just growth business planning. However, it’s important to note that growth planning emphasizes all five.

It’s a reflection of the best in business planning.

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.

Table of Contents

• 1. Do only what you’ll use
• 2. It’s a continuous process, not just a plan
• 5. It’s planning, not accounting

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Module 3: Planning and Mission

The planning cycle, learning outcomes.

• Explain the stages of the planning cycle.
• Explain why the planning cycle is an essential part of running a business.

Organizations have goals they want to achieve, so they must consider the best way of reaching their goals and must decide the specific steps to be taken. However, this is not a linear, step-by-step process. It is an iterative process with each step reconsidered as more information is gathered. As organizations go through the planning, they may realize that a different approach is better and go back to start again.

Remember that planning is only one of the management functions and that the functions themselves are part of a cycle. Planning, and in fact all of the management functions, is a cycle within a cycle. For most organizations, new goals are continually being made or existing goals get changed, so planning never ends. It is a continuing, iterative process.

In the following discussion, we will look at the steps in the planning cycle as a linear process. But keep in mind that at any point in the process, the planner may go back to an earlier step and start again.

Stages in the Planning Cycle

The stages in the planning cycle

Define objectives

The first, and most crucial, step in the planning process is to determine what is to be accomplished during the planning period. The vision and mission statements provide long-term, broad guidance on where the organization is going and how it will get there. The planning process should define specific goals and show how the goals support the vision and mission. Goals should be stated in measurable terms where possible. For example, a goal should be “to increase sales by 15 percent in the next quarter” not “increase sales as much as possible.”

Develop premises

Planning requires making some assumptions about the future. We know that conditions will change as plans are implemented and managers need to make forecasts about what the changes will be. These include changes in external conditions (laws and regulations, competitors’ actions, new technology being available) and internal conditions (what the budget will be, the outcome of employee training, a new building being completed). These assumptions are called the plan premises. It is important that these premises be clearly stated at the start of the planning process. Managers need to monitor conditions as the plan is implemented. If the premises are not proven accurate, the plan will likely have to be changed.

Evaluate alternatives

There may be more than one way to achieve a goal. For example, to increase sales by 12 percent, a company could hire more salespeople, lower prices, create a new marketing plan, expand into a new area, or take over a competitor. Managers need to identify possible alternatives and evaluate how difficult it would be to implement each one and how likely each one would lead to success. It is valuable for managers to seek input from different sources when identifying alternatives. Different perspectives can provide different solutions.

Identify resources

Next, managers must determine the resources needed to implement the plan. They must examine the resources the organization currently has, what new resources will be needed, when the resources will be needed, and where they will come from. The resources could include people with particular skills and experience, equipment and machinery, technology, or money. This step needs to be done in conjunction with the previous one, because each alternative requires different resources. Part of the evaluation process is determining the cost and availability of resources.

Plan and implement tasks

Management will next create a road map that takes the organization from where it is to its goal. It will define tasks at different levels in the organizations, the sequence for completing the tasks, and the interdependence of the tasks identified. Techniques such as Gantt charts and critical path planning are often used to help establish and track schedules and priorities.

Determine tracking and evaluation methods

It is very important that managers can track the progress of the plan. The plan should determine which tasks are most critical, which tasks are most likely to encounter problems, and which could cause bottlenecks that could delay the overall plan. Managers can then determine performance and schedule milestones to track progress. Regular monitoring and adjustment as the plan is implemented should be built into the process to assure things stay on track.

Practice Question

The planning cycle: essential part of running a business.

Following the planning cycle process assures the essential aspects of running a business are completed. In addition, the planning process itself can have benefits for the organization. The essential activities include the following:

• Maintaining organizational focus: Defining specific goals requires managers to consider the vision, mission, and values of the organization and how these will be operationalized. The methods and selected goals can demonstrate that the vision, mission, and values statements are working documents that are not just for show but prescribe activities.
• Encouraging diverse participation: Planning activities provide an opportunity for input from different functions, departments, and people. Some organizations establish planning committees that intentionally include people from diverse backgrounds to bring new perspectives into the planning process.
• Empowering and motivating employees: When people are involved in developing plans they will be more committed to the plans. Allowing diverse input into the planning cycle empowers people to contribute and motivates them to support the outcomes.

PRactice Question

There are several stages, or steps, in the planning process. It is not unusual to have to repeat steps as conditions change. This process is essential to a business to maintain focus, gather diverse opinions, and empower and motivate employees.

• The Planning Cycle. Authored by : John/Lynn Bruton and Lumen Learning. License : CC BY: Attribution
• Image: Stages in the Planning Cycle. Authored by : Lumen Learning. License : CC BY: Attribution

Business Life Cycle

The five stages of a business' life

What is the Business Life Cycle?

The business life cycle is the progression of a business in phases over time and is most commonly divided into five stages: launch, growth, shake-out, maturity, and decline. The cycle is shown on a graph with the horizontal axis as time and the vertical axis as dollars or various financial metrics. In this article, we will use three financial metrics to describe the status of each business life cycle phase, including sales , profit , and cash flow .

Image: CFI’s FREE Corporate Finance Class .

Phase One: Launch

Each company begins its operations as a business and usually by launching new products or services . During the launch phase, sales are low but slowly (and hopefully steadily) increasing. Businesses focus on marketing to their target consumer segments by advertising their comparative advantages and value propositions. However, as revenue is low and initial startup costs are high, businesses are prone to incur losses in this phase.

In fact, throughout the entire business life cycle, the profit cycle lags behind the sales cycle and creates a time delay between sales growth and profit growth. This lag is important as it relates to the funding life cycle, which is explained in the latter part of this article.

Finally, the cash flow during the launch phase is also negative but dips even lower than the profit. This is due to the capitalization of initial startup costs that may not be reflected in the business’ profit but that are certainly reflected in its cash flow.

Phase Two: Growth

In the growth phase, companies experience rapid sales growth. As sales increase rapidly, businesses start seeing profit once they pass the break-even point. However, as the profit cycle still lags behind the sales cycle, the profit level is not as high as sales. Finally, the cash flow during the growth phase becomes positive, representing an excess cash inflow.

Phase Three: Shake-out

During the shake-out phase, sales continue to increase, but at a slower rate, usually due to either approaching market saturation or the entry of new competitors in the market . Sales peak during the shake-out phase. Although sales continue to increase, profit starts to decrease in the shake-out phase. This growth in sales and decline in profit represents a significant increase in costs. Lastly, cash flow increases and exceeds profit.

Phase Four: Maturity

When the business matures, sales begin to decrease slowly. Profit margins get thinner, while cash flow stays relatively stagnant. As firms approach maturity, major capital spending is largely behind the business, and therefore cash generation is higher than the profit on the income statement .

However, it’s important to note that many businesses extend their business life cycle during this phase by reinventing themselves and investing in new technologies and emerging markets. This allows companies to reposition themselves in their dynamic industries and refresh their growth in the marketplace.

Phase Five: Decline

In the final stage of the business life cycle, sales, profit, and cash flow all decline. During this phase, companies accept their failure to extend their business life cycle by adapting to the changing business environment. Firms lose their competitive advantage and finally exit the market.

Corporate Funding Life Cycle

In the funding life cycle, the five stages remain the same but are placed on the horizontal axis. Across the vertical axis is the level of risk in the business; this includes the level of risk of lending money or providing capital to the business.

While the business life cycle contains sales, profit, and cash as financial metrics, the funding life cycle consists of sales, business risk, and debt funding as key financial indicators. The business risk cycle is inverse to the sales and debt funding cycle.

At launch, when sales are the lowest, business risk is the highest. During this phase, it is impossible for a company to finance debt due to its unproven business model and uncertain ability to repay debt. As sales begin to increase slowly, the corporations’ ability to finance debt also increases.

As companies experience booming sales growth, business risks decrease, while their ability to raise debt increases. During the growth phase, companies start seeing a profit and positive cash flow, which evidences their ability to repay debt.

The corporations’ products or services have been proven to provide value in the marketplace. Companies at the growth stage seek more and more capital as they wish to expand their market reach and diversify their businesses.

During the shake-out phase, sales peak. The industry experiences steep growth, leading to fierce competition in the marketplace. However, as sales peak, the debt financing life cycle increases exponentially. Companies prove their successful positioning in the market, exhibiting their ability to repay debt. Business risk continues to decline.

As corporations approach maturity, sales start to decline. However, unlike the earlier stages where the business risk cycle was inverse to the sales cycle, business risk moves in correlation with sales to the point where it carries no business risk. Due to the elimination of business risk, the most mature and stable businesses have the easiest access to debt capital.

In the final stage of the funding life cycle, sales begin to decline at an accelerating rate. This decline in sales portrays the companies’ inability to adapt to changing business environments and extend their life cycles.

Understanding the business life cycle is critical for investment bankers, corporate financial analysts, and other professionals in the financial services industry. You can benefit by checking out the additional information resources that CFI offers, such as those listed below.

Additional Resources

Thank you for reading this guide on the 5 stages of a business or industry life cycle. To help you advance your career, check out the additional CFI resources below:

• Corporate Development
• Careers in Corporate Development
• Diffusion of Innovation
• M&A Process Overview
• See all valuation resources
• See all commercial lending resources
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How to write a business plan in seven simple steps

When written effectively, a business plan can help raise capital, inform decisions, and draw new talent.

Companies of all sizes have one thing in common: They all began as small businesses.  Starting small  is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.

Writing a business plan is often the first step in transforming your business from an idea into something tangible . As you write, your thoughts begin to solidify into strategy, and a path forward starts to emerge. But a business plan is not only the realm of startups; established companies can also benefit from revisiting and rewriting theirs. In any case, the formal documentation can provide the clarity needed to motivate staff , woo investors, or inform future decisions.  

No matter your industry or the size of your team, the task of writing a business plan—a document filled with so much detail and documentation—can feel daunting. Don’t let that stop you, however; there are easy steps to getting started. 

What is a business plan and why does it matter? 

A business plan is a formal document outlining the goals, direction, finances, team, and future planning of your business. It can be geared toward investors, in a bid to raise capital, or used as an internal document to align teams and provide direction. It typically includes extensive market research, competitor analysis, financial documentation, and an overview of your business and marketing strategy. When written effectively, a business plan can help prescribe action and keep business owners on track to meeting business goals. 

Who needs a business plan?

A business plan can be particularly helpful during a company’s initial growth and serve as a guiding force amid the uncertainty, distractions, and at-times rapid developments involved in starting a business . For enterprise companies, a business plan should be a living, breathing document that guides decision-making and facilitates intentional growth.

“You should have a game plan for every major commitment you’ll have, from early-stage founder agreements to onboarding legal professionals,” says Colin Keogh, CEO of the Rapid Foundation—a company that brings technology and training to communities in need—and a WeWork Labs mentor in the UK . “You can’t go out on funding rounds or take part in accelerators without any planning.”

How to make a business plan and seven components every plan needs

While there is no set format for writing a business plan, there are several elements that are typically included. Here’s what’s important to consider when writing your business plan. 

1. Executive summary 

No longer than half a page, the executive summary should briefly introduce your business and describe the purpose of the business plan. Are you writing the plan to attract capital? If so, specify how much money you hope to raise, and how you’re going to repay the loan. If you’re writing the plan to align your team and provide direction, explain at a high level what you hope to achieve with this alignment, as well as the size and state of your existing team.

The executive summary should explain what your business does, and provide an introductory overview of your financial health and major achievements to date.  

2. Company description 

To properly introduce your company, it’s important to also describe the wider industry. What is the financial worth of your market? Are there market trends that will affect the success of your company? What is the state of the industry and its future potential? Use data to support your claims and be sure to include the full gamut of information—both positive and negative—to provide investors and your employees a complete and accurate portrayal of your company’s milieu. 

Go on to describe your company and what it provides your customers. Are you a sole proprietor , LLC, partnership, or corporation? Are you an established company or a budding startup? What does your leadership team look like and how many employees do you have? This section should provide both historical and future context around your business, including its founding story, mission statement , and vision for the future. 

It’s essential to showcase your point of difference in your company description, as well as any advantages you may have in terms of expert talent or leading technology. This is typically one of the first pieces of the plan to be written.

3. Market analysis and opportunity

Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider market is essential for the success of your business, and these considerations should be described here. 

In addition to this, it’s important to include research into the target demographic of your product or service. This might be in the form of fictional customer personas, or a broader overview of the income, location, age, gender, and buying habits of your existing and potential customers. 

Though the research should be objective, the analysis in this section is a good place to reiterate your point of difference and the ways you plan to capture the market and surpass your competition.

4. Competitive analysis 

Beyond explaining the elements that differentiate you from your competition, it’s important to provide an in-depth analysis of your competitors themselves.

This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should explore the value propositions of these competitors, and explain the ways you can compete with, or exploit, their strengths and weaknesses. 

5. Execution plan: operations, development, management 

This segment provides details around how you’re going to do the work necessary to fulfill this plan. It should include information about your organizational structure and the everyday operations of your team, contractors, and physical and digital assets.

Consider including your company’s organizational chart, as well as more in-depth information on the leadership team: Who are they? What are their backgrounds? What do they bring to the table? Potentially include the résumés of key people on your team. 

For startups, your execution plan should include how long it will take to begin operations, and then how much longer to reach profitability. For established companies, it’s a good idea to outline how long it will take to execute your plan, and the ways in which you will change existing operations.

If applicable, it’s also beneficial to include your strategy for hiring new team members and scaling into different markets. 

6. Marketing plan 

It’s essential to have a comprehensive marketing plan in place as you scale operations or kick off a new strategy—and this should be shared with your stakeholders and employees. This segment of your business plan should show how you’re going to promote your business, attract customers, and retain existing clients.

Include brand messaging, marketing assets, and the timeline and budget for engaging consumers across different channels. Potentially include a marketing SWOT analysis into your strengths, weaknesses, opportunities, and threats. Evaluate the way your competitors market themselves, and how your target audience responds—or doesn’t respond—to these messages.

7. Financial history and projections  

It’s essential to disclose all finances involved in running your company within your business plan. This is so your shareholders properly understand how you’re projected to perform going forward, and the progress you’ve made so far. 

You should include your income statement, which outlines annual net profits or losses; a cash flow statement, which shows how much money you need to launch or scale operations; and a balance sheet that shows financial liabilities and assets. 

“An income statement is the measure of your financial results for a certain period and the most accurate report of business activities during that time, [whereas a balance sheet] presents your assets, liabilities, and equity,” Amit Perry, a corporate finance expert, explained at a WeWork Labs educational session in Israel.

It’s crucial to understand the terms correctly so you know how to present your finances when you’re speaking to investors. Amit Perry, CEO and founder of Perryllion Ltd.

In addition, if you’re asking for funding, you will need to outline exactly how much money you need as well as where this money will go and how you plan to pay it back. 

12 quick tips for writing a business plan 

Now that you know what components are traditionally included in a business plan, it’s time to consider how you’ll actually construct the document.

Here are 12 key factors to keep in mind when writing a business plan. These overarching principles will help you write a business plan that serves its purpose (whatever that may be) and becomes an easy reference in the years ahead. 

1. Don’t be long-winded

Use clear, concise language and avoid jargon. When business plans are too long-winded, they’re less likely to be used as intended and more likely to be forgotten or glazed over by stakeholders. 

2. Show why you care

Let your passion for your business shine through; show employees and investors why you care (and why they should too). 

3. Provide supporting documents

Don’t be afraid to have an extensive list of appendices, including the CVs of team members, built-out customer personas, product demonstrations, and examples of internal or external messaging. 

4. Reference data

All information regarding the market, your competitors, and your customers should reference authoritative and relevant data points.  

5. Research, research, research

The research that goes into your business plan should take you longer than the writing itself. Consider tracking your research as supporting documentation. 

6. Clearly demonstrate your points of difference

At every opportunity, it’s important to drive home the way your product or service differentiates you from your competition and helps solve a problem for your target audience. Don’t shy away from reiterating these differentiating factors throughout the plan. 

7. Be objective in your research

As important as it is to showcase your company and the benefits you provide your customers, it’s also important to be objective in the data and research you reference. Showcase the good and the bad when it comes to market research and your financials; you want your shareholders to know you’ve thought through every possible contingency. 

8. Know the purpose of your plan

It’s important you understand the purpose of your plan before you begin researching and writing. Be clear about whether you’re writing this plan to attract investment, align teams, or provide direction. 

9. Identify your audience

The same way your business plan must have a clearly defined purpose, you must have a clearly defined audience. To whom are you writing? New investors? Current employees? Potential collaborators? Existing shareholders? 

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10. Avoid jargon

Avoid using industry-specific jargon, unless completely unavoidable, and try making your business plan as easy to understand as possible—for all potential stakeholders. 

11. Don’t be afraid to change it

Your business plan should evolve with your company’s growth, which means your business plan document should evolve as well. Revisit and rework your business plan as needed, and remember the most important factor: having a plan in place, even if it changes.

A business plan shouldn’t just be a line on your to-do list; it should be referenced and used as intended going forward. Keep your business plan close, and use it to inform decisions and guide your team in the years ahead. 

Creating a business plan is an important step in growing your company 

Whether you’re just starting out or running an existing operation, writing an effective business plan can be a key predictor of future success. It can be a foundational document from which you grow and thrive . It can serve as a constant reminder to employees and clients about what you stand for, and the direction in which you’re moving. Or, it can prove to investors that your business, team, and vision are worth their investment. 

No matter the size or stage of your business, WeWork can help you fulfill the objectives outlined in your business plan—and WeWork’s coworking spaces can be a hotbed for finding talent and investors, too. The benefits of coworking spaces include intentionally designed lounges, conference rooms, and private offices that foster connection and bolster creativity, while a global network of professionals allows you to expand your reach and meet new collaborators. 

Using these steps to write a business plan will put you in good stead to not only create a document that fulfills a purpose but one that also helps to more clearly understand your market, competition, point of difference, and plan for the future. 

For more tips on growing teams and building a business, check out all our articles on  Ideas by WeWork.

Caitlin Bishop is a writer for WeWork’s  Ideas by WeWork , based in New York City. Previously, she was a journalist and editor at  Mamamia  in Sydney, Australia, and a contributing reporter at  Gotham Gazette .

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How to Write a Business Plan: Beginner’s Guide (& Templates)

Written by: Chloe West

Thinking about starting a business? One of the first steps you’ll need to take is to write a business plan. A business plan can help guide you through your financial planning, marketing strategy, unique selling point and more.

Making sure you start your new business off on the right foot is key, and we’re here to help. We’ve put together this guide to help you write your first business plan. Or, you can skip the guide and dive right into a business plan template .

Ready to get started?

Here’s a short selection of 8 easy-to-edit business plan templates you can edit, share and download with Visme. View more templates below:

8-Step Process for Writing a Business Plan

What is a business plan, why is a business plan important, step #1: write your executive summary, step #2: put together your company description, step #3: conduct your market analysis, step #4: research your competition, step #5: outline your products or services, step #6: summarize your financial plan, step #7: determine your marketing strategy, step #8: showcase your organizational chart, 14 business plan templates to help you get started.

A business plan is a document that helps potential new business owners flesh out their business idea and put together a bird’s eye view of their business. Writing a business plan is an essential step in any startup’s ideation process.

Business plans help determine demographics, market analysis, competitive analysis, financial projections, new products or services, and so much more.

Each of these bits of information are important to have on hand when you’re trying to start a business or pitching investors for funds.

Here’s an example of a business plan that you can customize to incorporate your own business information.

We’re going to walk you through some of the most important parts of your business plan as well as how to write your own business plan in 8 easy steps.

If you’re in the beginning stages of starting a business , you might be wondering if it’s really worth your time to write out your business plan. 

We’re here to tell you that it is.

A business plan is important for a number of reasons, but mostly because it helps to set you up for success right from the start.

Here are four reasons to prove to you why you need to start your business off on the right foot with a plan.

Reason #1: Set Realistic Goals and Milestones

Putting together a business plan helps you to set your objectives for growth and make realistic goals while you begin your business. 

By laying out each of the steps you need to take in order to build a successful business, you’re able to be more reasonable about what your timeline is for achieving everything as well as what your financial projections are.

The best way to set goals is using the SMART goals guidelines, outlined below.

Reason #2: Grow Your Business Faster

Having a business plan helps you be more organized and strategic, improving the overall performance of your business as you start out. In fact, one study found that businesses with a plan grow 30% faster than businesses that don’t.

Doesn’t that sound reason enough alone to start out your business venture with a solidified plan? We thought so too, but we’ve still got two more reasons.

Reason #3: Minimize Risk

Starting a new business is uncharted territory. However, when you start with a roadmap for your journey, it makes it easier to see success and minimize the risks that come with startups.

Minimize risk and maximize profitability by documenting the most important parts of your business planning.

Reason #4: Secure Funding

And finally, our last reason that business plans are so important is that if you plan to pitch investors for funding for your new venture, they’re almost always going to want to see a detailed business plan before deciding whether or not to invest.

You can easily create your business plan and investor pitch deck right here with Visme. Just sign up for a free account below to get started. 

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The executive summary is a brief overview of your entire business plan, giving anyone who reads through your document a quick understanding of what they’re going to learn about your business idea.

However, you need to remember that some of the people who are going to read your business plan don’t want to or have time to read the entire thing. So your executive summary needs to incorporate all of the most important aspects of your plan.

Here’s an example of an executive summary from a business plan template you can customize and turn into your own.

Your executive summary should include:

• Key objective(s)
• Market research
• Competitor information
• Products/services
• Value proposition
• Overview of your financial plan
• How you’re going to actually start your business

One thing to note is that you should actually write your executive summary after the rest of your business plan so that you can properly summarize everything you’ve already created.

So at this point, simply leave a page blank for your executive summary so you can come back to it at the end of your business plan.

The next step is to write out a full description of your business and its core offerings. This section of your business plan should include your mission statement and objectives, along with your company history or overview.

In this section, you may also briefly describe your business formation details from a legal perspective.

Mission Statement

Don’t spend too much time trying to craft this. Your mission statement is a simple “why” you started this business. What are you trying to achieve? Or what does your business solve?

This can be anything from one single quote or a paragraph, but it doesn’t need to be much longer than that. In fact, this could be very similar to your value proposition.

What are your goals? What do you plan to achieve in the first 90 days or one year of your business? What kind of impact do you hope to make on the market?

These are all good points to include in your objectives section so anyone reading your business plan knows upfront what you hope to achieve.

History or Overview

If you’re not launching a brand new business or if you’ve previously worked on another iteration of this business, let potential investors know the history of your company.

If not, simply provide an overview of your business, sharing what it does or what it will do.

Your third step is to conduct a market analysis so you know how your business will fit into its target market. This page in your business plan is simply meant to summarize your findings. Most of your time should be spent actually doing the research.

Your market analysis needs to look at things like:

• Market size, and if it’s grown in recent years or shrinking
• The segment of the market you plan to target
• Demographics and behavior of your target audience
• The demand for your product or service
• Your competitive advantage or differentiation strategy
• The average price of your product or service

Put together a summary of your market analysis and industry research in a 1-2 page format, like we see below.

Your next step is to conduct a competitive analysis. While you likely touched on this briefly during your market analysis, now is the time to do a deep dive so that you have a good grasp on what your competitors are doing and how they are generating customers.

Start by creating a profile of all your existing competitors, or at the very least, your closest competitors – the ones who are offering very similar products or services to you, or are in a similar vicinity (if you’re opening a brick and mortar store).

Focus on their strengths and what they’re doing really well so that you can emulate their best qualities in your own way. Then, look at their weaknesses and what your business can do better.

Take note of their current marketing strategy, including the outlets you see a presence, whether it’s on social media, you hear a radio ad, you see a TV ad, etc. You won’t always find all of their marketing channels, but see what you can find online and on their website.

After this, take a minute to identify potential competitors based on markets you might try out in the future, products or services you plan to add to your offerings, and more.

Then put together a page or two in your business plan that highlights your competitive advantage and how you’ll be successful breaking into the market.

Step five is to dedicate a page to the products or services that your business plans to offer.

Put together a quick list and explanation of what each of the initial product or service offerings will be, but steer clear of industry jargon or buzzwords. This should be written in plain language so anyone reading has a full understanding of what your business will do.

You can have a simple list like we see in the sample page above, or you can dive a little deeper. Depending on your type of business, it might be a good idea to provide additional information about what each product or service entails.

The next step is to work on the financial data of your new business. What will your overhead be? How will your business make money? What are your estimated expenses and profits over the first few months to a year? The expenses should cover all the spending whether they are recurring costs or just one-time LLC filing fees .

There is so much that goes into your financial plan for a new business, so this is going to take some time to compile. Especially because this section of your business plan helps potential cofounders or investors understand if the idea is even viable.

Your financial plan should include at least five major sections:

• Sales Forecast: The first thing you want to include is a forecast or financial projection of how much you think your business can sell over the next year or so. Break this down into the different products, services or facets of your business.
• Balance Sheet: This section is essentially a statement of your company’s financial position. It includes existing assets, liabilities and equity to demonstrate the company’s overall financial health.
• Income Statement: Also known as a profit and loss statement (P&L), this covers your projected expenses and revenue, showcasing whether your business will be profitable or not.
• Operating Budget: A detailed outline of your business’s income and expenses. This should showcase that your business is bringing in more than it’s spending.
• Cash Flow Statements: This tracks how much cash your business has at any given point, regardless of whether customers or clients have paid their bills or have 30-60+ days to do so.

While these are the most common financial statements, you may discover that there are other sections that you want to include or that lenders may want to see from you.

You can automate the process of looking through your documents with an OCR API , which will collect the data from all your financial statements and invoices.

The next step is coming up with a successful marketing plan so that you can actually get the word out about your business. 

Throughout your business plan, you’ve already researched your competitors and your target market, both of which are major components of a good marketing strategy. You need to know who you’re marketing to, and you want to do it better than your competition.

On this page or throughout this section of your business plan, you need to focus on your chosen marketing channels and the types of marketing content you plan to create.

Start by taking a look at the channels that your competitors are on and make sure you have a good understanding of the demographics of each channel as well. You don’t want to waste time on a marketing channel that your target audience doesn’t use.

Then, create a list of each of your planned marketing avenues. It might look something like:

• Social media ( Facebook, Instagram, Pinterest)
• Email newsletter
• Digital ads

Depending on the type of business you’re starting, this list could change quite a bit — and that’s okay. There is no one-size-fits-all marketing strategy, and you need to find the one that brings in the highest number of potential customers.

Your last section will be all about your leadership and management team members. Showcasing that you have a solid team right from the start can make potential investors feel better about funding your venture.

You can easily put together an organizational chart like the one below, with the founder/CEO at the top and each of your team leaders underneath alongside the department they’re in charge of.

Simply add an organizational chart like this as a page into your overall business plan and make sure it matches the rest of your design to create a cohesive document.

If you want to create a good business plan that sets your new business up for success and attracts new investors, it’s a good idea to start with a template. 

We’ve got 14 options below from a variety of different industries for you to choose from. You can customize every aspect of each template to fit your business branding and design preferences.

If you're pressed for time, Visme's AI business plan generator can churn out compelling business plans in minutes. Just input a detailed prompt, choose the design, and watch the tool generate your plan in a few seconds.

Template #1: Photography Business Plan Template

This feminine and minimalistic business plan template is perfect for getting started with any kind of creative business. Utilize this template to help outline the step-by-step process of getting your new business idea up and running.

Template #2: Real Estate Business Plan Template

Looking for a more modern business plan design? This template is perfect for plainly laying out each of your business plans in an easy-to-understand format. Adjust the red accents with your business’s colors to personalize this template.

Template #3: Nonprofit Business Plan Template

Creating a business and marketing plan for your nonprofit is still an essential step when you’re just starting out. You need to get the word out to increase donations and awareness for your cause.

Template #4: Restaurant Business Plan Template

If your business plan needs to rely heavily on showcasing photos of your products (like food), this template is perfect for you. Get potential investors salivating at the sight of your business plan, and they’re sure to provide the capital you need.

Template #5: Fashion Business Plan Template

Serifs are in. Utilize this template with stunning serif as all the headers to create a contemporary and trendy business plan design that fits your business. Adjust the colors to match your brand and easily input your own content.

Template #6: Daycare Business Plan Template

Creating a more kid-friendly or playful business? This business plan template has bold colors and design elements that will perfectly represent your business and its mission. 

Use the pages you need, and remove any that you don’t. You can also duplicate pages and move the elements around to add even more content to your business plan.

Template #7: Consulting Business Plan Template

This classic business plan template is perfect for a consulting business that wants to use a stunning visual design to talk about its services.

Template #8: Coffee Shop Business Plan Template

Customize this coffee shop business plan template to match your own business idea. Adjust the colors to fit your brand or industry, replace photos with your own photography or stock photos that represent your business, and insert your own logo, fonts and colors throughout.

Template #9: SaaS Business Plan Template

A SaaS or service-based company also needs a solid business plan that lays out its financials, list of services, target market and more. This template is the perfect starting point.

Template #10: Small Business Plan Template

Every startup or small business needs to start out with a strong business plan in order to start off on the right foot and set yourself up for success. This template is an excellent starting point for any small business.

Template #11: Ecommerce Business Plan Template

An ecommerce business plan is ideal for planning out your pricing strategy of all of your online products, as well as the site you plan to use for setting up your store, whether WordPress, Shopify, Wix or something else.

Template #12: Startup Business Plan Template

Customize this template and make it your own! Edit and Download  

This is another generic business plan template for any type of startup to customize. Switch out the content, fonts and colors to match your startup branding and increase brand equity.

Template #13: One-Page Business Plan Template

Want just a quick business plan to get your idea going before you bite the bullet and map out your entire plan? This one-page template is perfect for those just starting to flesh out a new business idea.

Template #14: Salon Business Plan Template

This salon business plan template is easy on the design and utilizes a light color scheme to put more focus on the actual content. You can use the design as is or keep it as a basis for your own design elements.

Create Your Own Business Plan Today

Ready to write your business plan? Once you’ve created all of the most important sections, get started with a business plan template to really wow your investors and organize your startup plan.

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About the Author

Chloe West is the content marketing manager at Visme. Her experience in digital marketing includes everything from social media, blogging, email marketing to graphic design, strategy creation and implementation, and more. During her spare time, she enjoys exploring her home city of Charleston with her son.

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5 Stages Of The Business Life Cycle & How To Prepare For Each

Want to know more about the business life cycle? Explore these five main stages, learn how to prepare for each of them and see real-life examples.

Did you know that around 20% of startups fail during the first year of operations?

Understanding the key stages of the business life cycle is essential to ensuring that your business avoids that fate.

It is important to identify at which stage of the business life cycle your enterprise is, because that will define the direction of your operations and inform your company’s strategic planning. 

In this post, we will cover the evolutionary process of an average business, from the inception of the business idea to its decline, and explore how the business life cycle is different from business growth .

We will also identify examples and discuss the most important areas to focus on during each stage of the life cycle.

Let’s jump right in!

Table of Contents

What Is A Business Life Cycle?

A business life cycle is a cyclical representation of the stages an average business goes through from seeding to decline and renewal.

This evolutionary overview helps entrepreneurs and leaders optimize growth through the key stages, increasing the value of their business.

Stages Of Business Life Cycle vs. Business Growth:  How Are They Different?  

The main differences between the stages of a business life cycle and business growth are the way their stages are categorized and the way in which they are utilized.

While sometimes used interchangeably, these terms represent different takes on the evolution of a business, are used by different types of business owners and each have a distinct set of stages.

Take a look at the key differences between the two in the table below:

As shown above, a small and medium sized business owner will value and strive to achieve the four business growth stages: startup, growth, expansion and maturity. This is done in a bid to harness prolonged growth and keep their brand relevant for years to come.

Meanwhile, serial entrepreneurs will track the business life cycle as they aim to receive maximum profits for their business once it has reached its peak.

What Are The 5 Stages Of A Company Life Cycle?

The evolution of entrepreneurial ventures spans various phases, from planting the seeds of a business idea to reaching maturity and in some cases, decline. The five cyclical stages in a business’s existence are:

1. Seed & Development

Your business’s life cycle begins with an idea. Before your business has sprouted to life, you are ready to plant your business seed and nurture it to success.

Called the seed stage in reference to seed funding, it is during this phase that entrepreneurs search for the investors that will financially support their startup .

During this period, you’ll need to ask yourself whether your business idea will provide both short-term return-on-investment (ROI) and long-term profits.

Goal: Making an estimate of your idea’s business feasibility – that is, if it’s worth developing into an actual business.

Challenge : 42% of startups fail due to a lack of demand for their products or services. As such, identifying and pursuing a market niche that offers sustainable demand is the main challenge at the seed stage.

What to focus on:

• Reach out to investors: Financial support at this stage is crucial, so try to find individuals or organizations that may be interested in your project enough to provide monetary assistance. This will involve a great deal of market and economic research to establish the project’s feasibility.
• Create a business plan: It is always important to analyze and firmly establish the strengths, weaknesses, opportunities and threats your business may encounter in the market you intend to enter. The financial foundation of your launch will be a large factor in the success of your business, so try to plan that as much as possible, to the very last detail.
• Garner advice and opinion from professionals: Experienced industry specialists and entrepreneurs you may have access to, as well as business associates, friends and colleagues who are competent in this regard, can provide valuable insight and opinions on the potential of your business idea. Inquire about their main takeaways from the seed funding stage of their own projects and the biggest obstacles they had to overcome. 
• Consider the market and your role in it: Ask yourself if the market is ready to accept your business and if your concept, product, service or idea can fill an existing need in the market. How can your idea soothe the pain points of your prospective customers and clients?

At the startup stage of the business lifecycle, you’ll need funding from investors, banks or your own back pocket.

Regardless of where your funding comes from, extreme flexibility, adaptability and resourcefulness are your best friends at this stage. It’s a period of testing, failing and trying again.

The startup stage is usually marked by:

• Adapting your business model to the changing perspectives of the market and the feedback of your first customers
• Learning how to turn a profit
• Outlining your strategy and work processes
• Business formation and incorporation

Due to so many changes and alterations, you may feel a sense of confusion at this stage. Resist the urge to dwell on it, trust the process and power your way through: difficulties are natural at this stage and the path will be much clearer soon enough.

Goal : Making your business operational, sustainable and, most of all, profitable.

Challenge : Only 15.8% of businesses manage to move from the startup stage to the growth stage within a year. The main challenge of this stage is to develop a business model that will turn a profit, attract new customers and retain employees. 

• Establish a business structure: At the beginning of the startup stage, your employees are likely wearing many hats. Everybody does a little bit of everything, which is a prerogative for any new enterprise, but a corporate structure must exist in order for the company to keep growing beyond this phase.
• Consistently implement new ideas: During the startup phase, you spend your time meeting people and coming up with new ways to sell your products or services. Listening to customer feedback and trying new ideas will provide clarity on what aspect of your product(s) or service(s) to focus on in the future. 
• Figure out a sustainable cash flow: This is the right time to come up with a business model that provides a consistent cash flow that will, in turn, provide consistent growth and the ability to retain old employees and hire new ones.
• Face and overcome various challenges: Managing cash reserves and sales expectations, while establishing a customer base and a market presence are some of the biggest trials you will have to confront with decisiveness at this particular stage of the business life cycle. 

3. Growth 

At the growth stage of the business life cycle, your enterprise begins to solidify its place in the market. Your business strategy begins to settle and your clients are able to explain your business model to other prospects.

Businesses at this stage tend to have:

• Customers and clients of 7+ years
• Strong cash flow and profits
• Low turnover

This is the path toward making the most of your business potential: as you grow into the role of your company’s leader, a competent team of highly-qualified individuals should take over a number of big responsibilities.

Goal : Maximizing your profits and your customer base; creating a solid, intricate corporate and team structure. Achieving this would support your business in making the jump from growth to maturity, something only 30% of firms achieve each year.

Challenge : Addressing the new demands of your business, such as attending to new customers, expanding your workforce, m anaging revenue and o utperforming the competition. 

• Turn your focus inward: The key point here should be building a team by hiring quality people to run segmented operations. As the manager of your business, you should spend time on whatever helps the company grow and anticipate barriers that could decelerate this growth. Through a well-established recruitment process, create order and cohesion with clearly defined objectives.
• Strengthen your customer relationships: Your high-profile employees should take a more proactive stance toward client relationships as well as internal processes. Both experienced senior leaders and workers at lower levels should partake in helping your clients become advocates, thus pushing your enterprise to grow even further.
• Require investments: To deliver your business into the maturity stage, the growth phase needs investment. Outside investment capital is what you will likely have to require through either investors or debt. In the case of the former, you will gain advisors and give up equity. With the latter, you retain equity and sign personal guarantees with banks for funding. 

4. Maturity

The main characteristics of a business at the maturity stage are:

• Annual growth of around 5%
• Tenured employees of around 8 years
• Branches or subsidiaries

This is the period of the biggest level of security you as a business manager may feel since starting out. This security stems from professional management running a daily business, stable annual profits and relative predictability of the overall business situation. 

Your business is consistent and dependable, can defend its market position and expand into new verticals through the sheer power of brand recognition. This, alongside a strong cash position, makes your business attractive for acquisitions and mergers.

As a decision-maker, this may leave you with two choices: to reinvest in your company and its sustainability, or to exit and cash out to begin new ventures.  

Goal : Deciding the future of your business and your involvement in it. Over half of businesses at this stage will remain in the maturity phase year-on-year as they maximize profits and assess their options.

Challenge : Analyzing the potential benefits and drawbacks of each choice and making an informed decision.

• Expanding the business: Before deciding on this step, ask yourself if the business can sustain more growth. What are the market opportunities, if any, for another expansion? Can you cover the possible failure financially? Are you, as a leader, fit to navigate the challenges that new expansion would bring?
• Finding an exit strategy: This step will require a great deal of internal and external company position analysis. You, along with the management team, must communicate the right information at the right time, to the right people. You can perform this exit through a partial or full sale of the business. How the sale process will turn out will depend on the type of business you have and the decisions you make about moving forward.

5. Renewal/Decline

After a period of stability and success, a business may start to decline in revenue, profits, internal structure and external brand reputation .

A sure sign of any company’s decline is when leaders and owners no longer show an inclination toward investing in people or technology, but instead look at what they can take from the business as they plan their withdrawal.

However, renewal efforts should really begin before the decline phase sets in – good business leaders should be able to anticipate the change in business and market beforehand. 

Goal : Reinventing your business by innovating and reinvesting or cashing out.

Challenge : T aking an honest, timely look and identifying the spectrum on which your business falls – investing and expanding or selling and exiting.

• Assemble a team of people who are experts on mergers and acquisitions:  This should include accountants, lawyers, investment bankers and other relevant parties who can see to it that the merger process checks all legal and financial boxes.
• Talk with sales and marketing about reinvesting: They can help figure out how to meet emerging changes in the market and whether there is capacity within the company to meet these changes. This might include modifying current offerings or inventing a completely new business model, which is both time-consuming and costly. 

3 Real-Life Business Life Cycle Examples

Having looked at each of the five business life cycle stages in depth, let’s analyze some real world examples of businesses and their owners who either got it right or wrong.

1. Blockbuster

Founded in 1985, Blockbuster’s rapid early-life growth led to the video rental chain operating with nearly 3,600 stores in 1993. Having reached growth and maturity within just eight years, Blockbuster was subject to a merger worth $8.4 billion in 1994.

Over the next decade, Blockbuster continued its market domination and reaches peak maturity. However, the rise of Netflix, paired with failed takeover bids for Hollywood Video and Circuit City, led to falling sales.

Blockbuster had reached its infamous decline.

By 2010, the company had filed for bankruptcy and as of 2023 there is just one Blockbuster store remaining , located in Oregon.

Elon Musk’s earliest ventures are a blueprint for successful business life cycle management. Having founded the online business directory Zip2 in 1995, he sold the company just four years later for $307 million .

However, it was PayPal where Musk made his billions. Originally named X.com (a URL which now leads to Twitter ), the online payments company was founded by Musk in 1999.

Following a merger with Confinity, rapid growth and a name change to PayPal, the business was sold to eBay for $1.5 billion in 2002.

A gigantic deal at the time, PayPal’s market value spiked to $362 billion 2021 before slumping to $70 billion in 2023 – perhaps 20 years after Musk sold his stake PayPal has finally reached its decline stage.

3. Linktree

Founded in 2016, Linktree is a link in bio tool, allowing businesses and content creators to advertize all of their content in one place.

Today, Linktree is used by over 35 million users, and its most recent valuation places the company at $1.3 billion .

Linktree continues to grow by adding new features like payments and Shopify integration, and only time will tell if its owners choose to sell once it reaches maturity.

Business Life Cycle Stages: Takeaways

Understanding the business life cycle and your position in it makes it that much easier to predict pending roadblocks and, with careful planning, stay one step ahead of these challenges.

The 5 stages of the business life cycle are:

• Seed and development
• Renewal/Decline

Business aims, strategies and objectives are not set in stone – they change as your business and the surrounding market change. Being aware of what stage of the business life cycle you’re at can help with anticipating what’s coming around the bend.

The key takeaways across all stages of the business life cycle include:

• Consider your business’s place in the market
• Establish your company’s business structure
• Listen to feedback and adjust your business model
• Find a sustainable cash flow
• Turn your focus inward toward recruiting quality people and delegating key duties 
• Expand the business or find an exit strategy
• Reinvest to innovate or sell to maximize profits

The mixture of business acumen, instinct and the ability to interpret the signs of change in your environment will all impact the precision of your decision-making when moving from stage to stage.

Regardless of what life cycle stage your business is experiencing, our team of expert consultants are on hand to guide you through its decision-making complexities. Contact us online , call us at (800) 206-9413 or fill in our request a quote form below to learn more about our bespoke consulting services.

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Gabriel is a hands-on leader and digital expert focused on providing strategies that grow brands online. He has worked with Fortune 500 companies and reputable startups, including Google, Microsoft, SONY, NFL, NYU, P&G, Fleet Bank and NASA. In addition to columns in Forbes, Entrepreneur, The New York Times and American Express, Gabriel has made numerous media appearances, from Bloomberg and Reuters to ABC News and CNN.

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The 5 steps of the strategic planning process

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Starting a project without a strategy is like trying to bake a cake without a recipe — you might have all the ingredients you need, but without a plan for how to combine them, or a vision for what the finished product will look like, you’re likely to end up with a mess. This is especially true when working with a team — it’s crucial to have a shared plan that can serve as a map on the pathway to success.

Creating a strategic plan not only provides a useful document for the future, but also helps you define what you have right now, and think through and outline all of the steps and considerations you’ll need to succeed.

What is strategic planning?

While there is no single approach to creating a strategic plan, most approaches can be boiled down to five overarching steps:

• Define your vision
• Assess where you are
• Determine your priorities and objectives
• Define responsibilities
• Measure and evaluate results

Each step requires close collaboration as you build a shared vision, strategy for implementation, and system for understanding performance.

Related: Learn how to hold an effective strategic planning meeting

Why do I need a strategic plan?

Building a strategic plan is the best way to ensure that your whole team is on the same page, from the initial vision and the metrics for success to evaluating outcomes and adjusting (if necessary) for the future. Even if you’re an expert baker, working with a team to bake a cake means having a collaborative approach and clearly defined steps so that the result reflects the strategic goals you laid out at the beginning.

The benefits of strategic planning also permeate into the general efficiency and productivity of your organization as a whole. They include: 

• Greater attention to potential biases or flaws, improving decision-making 
• Clear direction and focus, motivating and engaging employees
• Better resource management, improving project outcomes 
• Improved employee performance, increasing profitability
• Enhanced communication and collaboration, fostering team efficiency 

Next, let’s dive into how to build and structure your strategic plan, complete with templates and assets to help you along the way.

Before you begin: Pick a brainstorming method

There are many brainstorming methods you can use to come up with, outline, and rank your priorities. When it comes to strategy planning, it’s important to get everyone’s thoughts and ideas out before committing to any one strategy. With the right facilitation , brainstorming helps make this process fair and transparent for everyone involved.  

First, decide if you want to run a real-time rapid ideation session or a structured brainstorming . In a rapid ideation session, you encourage sharing half-baked or silly ideas, typically within a set time frame. The key is to just get out all your ideas quickly and then edit the best ones. Examples of rapid ideation methods include round robin , brainwriting , mind mapping , and crazy eights . 

In a structured brainstorming session, you allow for more time to prepare and edit your thoughts before getting together to share and discuss those more polished ideas. This might involve brainstorming methods that entail unconventional ways of thinking, such as reverse brainstorming or rolestorming . 

Using a platform like Mural, you can easily capture and organize your team’s ideas through sticky notes, diagrams, text, or even images and videos. These features allow you to build actionable next steps immediately (and in the same place) through color coding and tagging. 

Whichever method you choose, the ideal outcome is that you avoid groupthink by giving everyone a voice and a say. Once you’ve reached a consensus on your top priorities, add specific objectives tied to each of those priorities.

Related: Brainstorming and ideation template

1. Define your vision

Whether it’s for your business as a whole, or a specific initiative, successful strategic planning involves alignment with a vision for success. You can think of it as a project-specific mission statement or a north star to guide employees toward fulfilling organizational goals. 

To create a vision statement that explicitly states the ideal results of your project or company transformation, follow these four key steps: 

• Engage and involve the entire team . Inclusivity like this helps bring diverse perspectives to the table. 
• Align the vision with your core values and purpose . This will make it familiar and easy to follow through. 
• Stay grounded . The vision should be ambitious enough to motivate and inspire yet grounded enough to be achievable and relevant.
• Think long-term flexibility . Consider future trends and how your vision can be flexible in the face of challenges or opportunities. 

For example, say your vision is to revolutionize customer success by streamlining and optimizing your process for handling support tickets. It’s important to have a strategy map that allows stakeholders (like the support team, marketing team, and engineering team) to know the overall objective and understand the roles they will play in realizing the goals. 

This can be done in real time or asynchronously , whether in person, hybrid, or remote. By leveraging a shared digital space , everyone has a voice in the process and room to add their thoughts, comments, and feedback. 

Related: Vision board template

2. Assess where you are

The next step in creating a strategic plan is to conduct an assessment of where you stand in terms of your own initiatives, as well as the greater marketplace. Start by conducting a resource assessment. Figure out which financial, human, and/or technological resources you have available and if there are any limitations. You can do this using a SWOT analysis.

What is SWOT analysis?

SWOT analysis is an exercise where you define:

• Strengths: What are your unique strengths for this initiative or this product? In what ways are you a leader?
• Weaknesses: What weaknesses can you identify in your offering? How does your product compare to others in the marketplace?
• Opportunities: Are there areas for improvement that'd help differentiate your business?
• Threats: Beyond weaknesses, are there existing potential threats to your idea that could limit or prevent its success? How can those be anticipated?

For example, say you have an eco-friendly tech company and your vision is to launch a new service in the next year. Here’s what the SWOT analysis might look like: 

• Strengths : Strong brand reputation, loyal customer base, and a talented team focused on innovation
• Weaknesses : Limited bandwidth to work on new projects, which might impact the scope of its strategy formulation 
• Opportunities : How to leverage and experiment with existing customers when goal-setting
• Threats : Factors in the external environment out of its control, like the state of the economy and supply chain shortages

This SWOT analysis will guide the company in setting strategic objectives and formulating a robust plan to navigate the challenges it might face. 

Related: SWOT analysis template

3. Determine your priorities and objectives

Once you've identified your organization’s mission and current standing, start a preliminary plan document that outlines your priorities and their corresponding objectives. Priorities and objectives should be set based on what is achievable with your available resources. The SMART framework is a great way to ensure you set effective goals . It looks like this:  

• Specific: Set clear objectives, leaving no room for ambiguity about the desired outcomes.
• Measurable : Choose quantifiable criteria to make it easier to track progress.
• Achievable : Ensure it is realistic and attainable within the constraints of your resources and environment.
• Relevant : Develop objectives that are relevant to the direction your organization seeks to move.
• Time-bound : Set a clear timeline for achieving each objective to maintain a sense of urgency and focus.

For instance, going back to the eco-friendly tech company, the SMART goals might be: 

• Specific : Target residential customers and small businesses to increase the sales of its solar-powered device line by 25%. 
• Measurable : Track monthly sales and monitor customer feedback and reviews. 
• Achievable : Allocate more resources to the marketing, sales, and customer service departments. 
• Relevant : Supports the company's growth goals in a growing market of eco-conscious consumers. 
• Time-bound : Conduct quarterly reviews and achieve this 25% increase in sales over the next 12 months.

With strategic objectives like this, you’ll be ready to put the work into action. 

Related: Project kickoff template

4. Define tactics and responsibilities

In this stage, individuals or units within your team can get granular about how to achieve your goals and who'll be accountable for each step. For example, the senior leadership team might be in charge of assigning specific tasks to their team members, while human resources works on recruiting new talent. 

It’s important to note that everyone’s responsibilities may shift over time as you launch and gather initial data about your project. For this reason, it’s key to define responsibilities with clear short-term metrics for success. This way, you can make sure that your plan is adaptable to changing circumstances. 

One of the more common ways to define tactics and metrics is to use the OKR (Objectives and Key Results) method. By outlining your OKRs, you’ll know exactly what key performance indicators (KPIs) to track and have a framework for analyzing the results once you begin to accumulate relevant data. 

For instance, if our eco-friendly tech company has a goal of increasing sales, one objective might be to expand market reach for its solar-powered products. The sales team lead would be in charge of developing an outreach strategy. The key result would be to successfully launch its products in two new regions by Q2. The KPI would be a 60% conversation rate in those targeted markets.  

Related: OKR planning template  

5. Manage, measure, and evaluate

Once your plan is set into motion, it’s important to actively manage (and measure) progress. Before launching your plan, settle on a management process that allows you to measure success or failure. In this way, everyone is aligned on progress and can come together to evaluate your strategy execution at regular intervals.

Determine the milestones at which you’ll come together and go over results — this can take place weekly, monthly, or quarterly, depending on the nature of the project.

One of the best ways to evaluate progress is through agile retrospectives (or retros) , which can be done in real time or asynchronously. During this process, gather and organize feedback about the key elements that played a role in your strategy. 

Related: Retrospective radar template

Retrospectives are typically divided into three parts:

• What went well.
• What didn’t go well.
• New opportunities for improvement.

This structure is also sometimes called the “ rose, thorn, bud ” framework. By using this approach, team members can collectively brainstorm and categorize their feedback, making the next steps clear and actionable. Creating an action plan during a post-mortem meeting is a crucial step in ensuring that lessons learned from past projects or events are effectively translated into tangible improvements. 

Another method for reviewing progress is the quarterly business review (QBR). Like the agile retrospective, it allows you to collect feedback and adjust accordingly. In the case of QBRs, however, we recommend dividing your feedback into four categories:

• Start (what new items should be launched?).
• Stop (what items need to be paused?).
• Continue (what is going well?).
• Change (what could be modified to perform better?).

Strategic planners know that planning activities continue even after a project is complete. There’s always room for improvement and an action plan waiting to be implemented. Using the above approaches, your team can make room for new ideas within the existing strategic framework in order to track better to your long-term goals.

Related: Quarterly business review template

Conclusions

The beauty of the strategic plan is that it can be applied from the campaign level all the way up to organizational vision. Using the strategic planning framework, you build buy-in , trust, and transparency by collaboratively creating a vision for success, and mapping out the steps together on the road to your goals.

Also, in so doing, you build in an ability to adapt effectively on the fly in response to data through measurement and evaluation, making your plan both flexible and resilient.

Related: 5 Tips for Holding Effective Post-mortems

Why Mural for strategic planning

Mural unlocks collaborative strategic planning through a shared digital space with an intuitive interface, a library of pre-fab templates, and methodologies based on design thinking principles.

Outline goals, identify key metrics, and track progress with a platform built for any enterprise.

Learn more about strategic planning with Mural.

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• Building Your Business
• Becoming an Owner

The 7 Stages of Starting and Running a Business

The Lifecycle of a Business

Darrell Zahorsky is an expert in search engine optimization (SEO) and marketing. He has worked for companies and clients such as Blackberry, ADP, and Subway.

The Seed Stage

The start-up stage, the growth stage, the established stage, the expansion stage, the decline stage, the exit stage, frequently asked questions.

Hero Images / Getty Images

A small business goes through various stages of development. Your challenges will change and require different approaches to be successful. You need to be able to anticipate upcoming challenges and have strategies to succeed at each stage of the business lifecycle.

Key Takeaways

• Start with one idea while working to establish a customer base and market presence
• Focus on expanding and growing your business even after it becomes profitable
• Work with valuation experts and tax professionals if you're planning on exiting your business

The seed stage of your business lifecycle is when your business is just a thought or an idea. Most seed-stage companies will have to overcome the challenge of market acceptance and pursue one opportunity. Don't try to take on too much at once.

At this stage of the business the focus your focus should be on making sure your idea works well with your skills, experience, and passions. You'll also need to decide on a business ownership structure, come up with a business plan, and get funding.

You might be able to self-fund your business, get investments from friends and family, or apply for government grants. If you have some sort of existing client base for your business already, you may be able to get them to invest.

Once your business legally exists, you'll need to make sure you can provide whatever products or services you're planning on selling, and establish a customer base and market presence. You might need to change your business strategy or raise more cash if your expenses are higher than anticipated.

Try not to burn through your cash too quickly. It may take longer than you anticipate for your business to become profitable or break even.

If your business is growing, that means that your revenue and customer base are also likely growing. You might need to hire and train new employees to handle with the additional workload that comes with a growing business.

You may also need to invest additional money in the company to maintain your success. If you don't have enough cash available, you might be able to take out a loan through the Small Business Administration.

It's still a lot of work to maintain your business once it's become self-sustaining or even profitable. Make sure you're maintaining or growing your revenue stream by keeping up with any new developments in the industry or changing customer preferences.

If your original business is doing reasonably well, or if it can't grow anymore without a new customer base, it may be time for the business to expand into a new market. In some cases it may be easier for you to expand into a small, niche market, because a larger market is likely to be more competitive and may take longer to break into.

Make sure you do plenty of planning and research before deciding where to invest your resources. You may want to focus on markets that are related to your existing business.

In the decline stage, sales, profit, and cash flow all decline. A business owner might be forced to sell or close their business if they cannot sufficiently cut costs or increase their profits. A business might be able to avoid declining by reinventing itself, or branching out into new markets or technologies. That way, it can reposition itself and begin new growth in the marketplace.

There are a few ways you might leave a business that you started. You might be able to sell your business and start a new venture, the business might not have worked out, or you might be ready to completely retire from work.

Can You Sell Your Business?

Even though it might have taken years of hard work to build the company, you'll need to consider its real value in the current marketplace. A qualified valuation expert can help you figure out the fair market value of your business and may be able to help you come up with a strategy to help you increase the profitability of your company before you sell.

Closing Your Business

In some situations, you may need to close rather than sell your business. If you have any partners, you'll need a written agreement when closing the business. If you have an LLC or a corporation, you need to legally dissolve it.

You'll need to cancel any registrations, permits, licenses, and business names as well as your Employer Identification Number. Make sure you notify federal and state tax agencies that you are closing your business.

Make sure all your financial obligations have been met. Pay any employees you might have, and handle final returns of income tax and sales tax. You'll need to maintain business documents after the business has closed, including tax and employment records.

You'll need to keep tax and employment records after your business has closed. You'll typically need to hold onto these records for three to seven years.

If you can, you'll also want to consult with a tax expert or financial advisor while closing out your business. That way you can make sure you're meeting all of the necessary requirements.

What Is the Stage After Start-Up?

The stage after the start-up stage is the growth stage. You'll need to make sure your business begins to grow a revenue and customer base.

How Do I Start My Own Business From Scratch?

You'll need to do market research to find out if your idea has the potential to be profitable. You'll also need to write a business plan and figure out how to get funding for your business, whether it's through investors, loans, or self-funding.

U.S. Small Business Administration. " Loans ."

CFI. " Business Life Cycle ."

U.S. Small Business Administration. " Close or Sell Your Business ."

• Stages of the business lifecycle

Stages of the Business Lifecycle

Whether you are a new business owner or have run your small business for years, it is wise to familiarize yourself with the five cycles of change: startup, growth, maturity, transition and succession. This applies to small retail shops and online business alike, as every type of business may go through several or all of these stages.

Why do you want to start your own business? Maybe your family needs additional income or you’re unfulfilled by your current job and want to work for yourself. Whether it’s out of necessity or desire, you need to evaluate your skills, expertise and the level of risk you want to take on before starting a new venture. This also applies to people who may feel obligated to take over a family business.

According to the U.S. Bureau of Labor Statistics , only half of small businesses survive past five years. As one would expect, after the first few relatively challenging years, businesses tend to become more successful and survival rates improve. These statistics hold true across different industries, including manufacturing, retail trade, food service, hotel and construction.

As a prospective business owner, you should familiarize yourself with what to expect. And remember, no matter the stage, it’s important to take stock of how your company is performing and do everything in your power to stay competitive and successful. Each stage brings new challenges that owners need to address to protect their businesses, and new opportunities to grow and improve.

Before you start a business, you need to be realistic about how much money you’ll need to get up and running. Startup costs can include inventory, office space, equipment, anticipated tax costs and employee payroll. Being passionate about something — owning a restaurant, beauty salon, technical service or construction company — is not enough on its own to guarantee success. The length of time it takes to start a business often depends on the type of business and the location. If it is just one person and no loans are required, it could take as little as a month or two to get started. If it is a larger company with employees and startup funding is required, it could take up to a year to get the business off the ground.

During the first stage, it’s important to research the market and competitive landscape, write a business plan and secure funding .

First-time business owners will need to understand the essential steps to follow as they launch their new venture.

• Research the market and competitive landscape. Figure out who your main competitors will be and what your ideal customers look like. You can research this by conducting phone or face-to-face interviews, online surveys or focus groups with potential customers to get their feedback. Consider asking them why they purchase a specific product or service, what they like or don’t like about competitors’ products and what price they would be willing to pay for what your company plans to offer.
• Identify what you’ll sell. Whether you plan to offer a product, service or both, narrow in on what you’ll sell and how you’ll make it different from your competitors’ offerings. Even if you’re selling identical products or services, you could distinguish yourself with your location, customer service or shopping experience.
• Write a business plan. A business plan is a roadmap for the future of your company and often outlines the goals for the first, third and fifth years in business. If you need outside investors to loan you money in order to get started, they will need to review your business plan and financial statements before investing.
• Set financial goals. Get specific about how much money you’ll need to invest, borrow, spend and can reasonably make during your first year in business. Some businesses aren’t profitable for the first few years while they build their reputation and customer base. You’ll need a plan for covering expenses during that time.
• Consider partnership. If you don’t have the funds or expertise to launch a business on your own, consider partnering with someone who has complementary skills or money to invest. A potential partnership could develop over time and offset your startup costs with additional funding from a partner. Another possibility is that you are hired by an owner of a company who wants to sell the business in the future and offers you the opportunity to buy the business in a phased buying process. Instead of needing to have cash on hand for an upfront sale, the owner might offer you a stake in the business for investing a number of years as an employee. This could be a good solution for an aging owner to transition the business and secure the future of their employees, as well as their own retirement.
• Secure funding. From getting small business loans to crowdfunding campaigns, there are many ways you can raise money to start your company.
• Create your business. Make it official by choosing a business name and creating your business entity . You could have to register your business; get federal and state tax identification numbers, permits or licenses; and may want to file for trademarks, copyrights or patents. You can also set up a bank account to manage the business’s money.
• Hire employees. If you hire workers, you’ll want to make sure you’re following state and federal employment laws and learn about managing employees . The U.S. Department of Labor website is a good resource for learning more about labor laws.
• Build your customer base. Once your business is up and running, you’ll want to focus on building your customer base. You can do this by providing excellent customer service, special deals and offering incentives to new customers. A marketing campaign can also help, and it could be as simple as handing out a printed coupon or offering incentives like two-for-one sales.
• Market your product or service. It’s also important to promote your new business and build awareness of the business, which you can do by creating a website, social media accounts and marketing at community or industry events. If you have the budget, consider starting an advertising campaign. You can do this online, in local newspapers or wherever else you think your ideal customers will see the advertisements.
• Monitor cash flow. Keeping an eye on incoming and outgoing cash (i.e., cash flow ) is critical to managing a business. Often, unexpected business expenses can put owners into a cash-flow crunch that can impact their ability to pay suppliers and employees.

If your business has hit major milestones during the startup stage and achieved sales goals, your business can begin to explore opportunities for growth. Once your business has established a customer base and become known for a product or service, you can focus on ways to grow your sales and operations.

During a growth stage, your business may begin to make more money, breaking even, becoming profitable or increasing profitability.

If your product or service is taking off, it could be time to look for more funding from investors so you can expand your business. You may need to invest in equipment, hire more employees to expand your best-performing products or services. It may also be time to discontinue or try to improve the products or services that haven’t been selling well.

Throughout the startup stage, most of the burden of running the business might have been on you as the owner. If your business is growing, you may be able to hire and train employees to help manage day-to-day functions. With this staff in place, you’ll have more time to focus on marketing the business and managing others.

This could also be a good time to focus on investing more money into your emergency fund , to help pay for unexpected setbacks or invest in upcoming opportunities.

After several years in business, your company may hit a stage of maturity when it’s more stable and profitable. This is the third stage in the life cycle of a business.

When you first started your business, you may have taken a limited salary. Now, as an owner, you can most likely start taking a regular salary from the company.

Mature businesses should have strong brand recognition and a secure or growing customer base that allows them to expand product lines into new or existing markets.

At this point, you can count on your employees to manage the day-to-day operations as you focus on long-term goals.

The transition stage represents a period where a company must deal with change. The transition may be positive or negative, and it could be due to many factors, including:

• Declining sales
• Changing market conditions that are impacting the business
• A shift in customers’ preferences
• An opportunity for rapid growth
• A personal situation

For some businesses, a larger competitor moving in nearby or a slowing desire for their product or service could result in declining sales. When you’re faced with these threats, you need to figure out how to retain and attract customers.

The transition stage can also be a period of immense growth. Once your business becomes well-known, you may have opportunities to partner with much larger companies or groups of customers. Before taking on a large order from a bigger company or national chain store, make sure you can meet the demand in addition to your other orders coming in. When a small company gets a big break by landing a huge order, it can be an opportunity for growth and increase awareness about your company. Conversely, if you are unable to meet the demand, it could damage your reputation and business.

You may need extra funds to invest in production and sales staff, but it could be months before you reap the rewards of the sales. Managing these large outflows and inflows of money can be a challenge that you’ll need to address to survive a period of rapid growth.

With your long-term goals in mind, you may want to focus on creating tactical plans to guide your immediate responses during a transition. A tactical plan will take your business’s strengths and weaknesses, along with external threats and opportunities, into account; this can help you come up with solutions to problems or opportunities. Each of these solutions can help you achieve those long-term goals.

The final stage of a business’s life cycle is when an owner decides to close, sell or bring in a successor to take over the company.

Owners may decide to move on for a variety of reasons. You might want to try something new, your business may be in decline or you could be dealing with personal or health issues. Or, your business might be doing great, and you think you could get a great price and then retire.

For small business owners, a successor is often a family member, friend or current employee who wants to take over and run the business. However, you could also try to sell your business to someone who you don’t already know.

You may also want to sell the entire business to the person, or retain partial ownership and receive income from the business’s profits even though you’re no longer involved with the day-to-day operations. Some business owners agree to stay on and help train the new owner during the transition.

The sale process can vary depending on the type of business and where it’s located, but it often involves several steps:

• Determine the business’s worth. Evaluate the value of the business based on its assets and sales. A small business may be worth several times its yearly sales, but the value can vary depending on the specifics of the situation. You can hire a professional or company to help determine the business’s value if you’re unsure of what to do. Look for someone who has experience evaluating similar businesses and can use that experience to guide the valuation. If you are determining the value on your own, review some of the steps in the process that you will need to complete.
• Prepare your financial documents. Potential buyers will want to review your business’s records, financial statements and tax returns to get a better understanding of the business’s financial situation and sales history. Make sure all your documents are ready and accurate.
• Find prospective buyers. You may be able to list your business for sale online or in local publications. You could also work with a business broker, a professional who can match sellers with potential buyers in exchange for a cut of the sale price.
• Get financing in order. Many business buyers will need to take out a loan to buy your business. You may also have to lend the buyer money by allowing the buyer to pay you part of the selling price, plus interest, over time. Seller-financing can be important because it shows the buyer, and the other lenders, that you believe in the business’s future.
• Negotiate the terms of the sale. As with many transactions, expect the buyer to negotiate the sale price and terms of the agreement. You may want to hire professionals who have managed small business sales before, including an accountant and attorney, to review everything before the final sale.
• Close the deal. Once you come to an agreement, it’s time to make the sale official by signing the legal contracts that turn over control and ownership to the buyer. These contracts can be difficult to write and understand, and your attorney should likely be involved in this final step.

If you’re unable to find a seller or can’t get a high enough price for your business, you may want to pass the business on to a family member, friend or employee for free. You could still retain partial ownership and have an income from the business.

Or, if the business is already declining and you think it won’t survive for much longer, you may want to close the business completely rather than selling or passing it on.

Closing a business can be a straightforward process if it doesn’t have a lot of debt. You can sell the business assets and end contracts, and may need to file paperwork with your state government to disband your business entity (if you created one). If you don’t officially disband the entity, you may need to continue to pay state filing fees or taxes.

If you can’t afford the business’s debt, you may want to try and work with the creditors to pay over time or settle for a lower amount. Bankruptcy may also be an option depending on the amount of debt and the business’s and your personal financial situation.

Disclaimer: No Legal Advice Intended This site provides general information related to creating and running a business. The content of this site is for informational purposes only and not for the purpose of providing legal or tax advice or opinions. The contents of this site, and the viewing of the information on this site, should not be construed as, and should not be relied upon for, legal, financial or tax advice in any particular circumstance or fact situation. No action should be taken in reliance on the information contained on this site, and Visa Inc. disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. You should contact an attorney to obtain advice with respect to any particular legal or tax issue or problem, including those relating to your current or potential business. The contents of this site have been developed for a U.S. audience.

Organizational Planning Guide: Types of Plans, Steps, and Examples

Organizational planning is like charting your company’s path on a map. You need to know what direction you’re headed to stay competitive.

But what exactly is organizational planning and how do you do it effectively? This guide will cover:

The Different Components or Types of Organizational Plans?

The 5 Process Steps of Organizational Planning

Organizational planning examples.

Organizational Planning Tools

What is Organizational Planning?

Organizational planning is the process of defining a company’s reason for existing, setting goals aimed at realizing full potential, and creating increasingly discrete tasks to meet those goals.

Each phase of planning is a subset of the prior, with strategic planning being the foremost

There are four phases of a proper organizational plan: strategic, tactical, operational, and contingency. Each phase of planning is a subset of the prior, with strategic planning being the foremost.

Types of Organizational Planning

A strategic plan is the company’s big picture. It defines the company’s goals for a set period of time, whether that’s one year or ten, and ensures that those goals align with the company’s mission, vision, and values. Strategic planning usually involves top managers, although some smaller companies choose to bring all of their employees along when defining their mission, vision, and values.

The tactical strategy describes how a company will implement its strategic plan. A tactical plan is composed of several short-term goals, typically carried out within one year, that support the strategic plan. Generally, it’s the responsibility of middle managers to set and oversee tactical strategies, like planning and executing a marketing campaign.

Operational

Operational plans encompass what needs to happen continually, on a day-to-day basis, in order to execute tactical plans. Operational plans could include work schedules, policies, rules, or regulations that set standards for employees, as well as specific task assignments that relate to goals within the tactical strategy, such as a protocol for documenting and addressing work absences.

Contingency

Contingency plans wait in the wings in case of a crisis or unforeseen event. Contingency plans cover a range of possible scenarios and appropriate responses for issues varying from personnel planning to advanced preparation for outside occurrences that could negatively impact the business. Companies may have contingency plans for things like how to respond to a natural disaster, malfunctioning software, or the sudden departure of a C-level executive.

The organizational planning process includes five phases that, ideally, form a cycle.

Strategic, tactical, operational, and contingency planning fall within these five stages.

1. Develop the strategic plan

Steps in this initial stage include:

Review your mission, vision, and values

Gather data about your company, like performance-indicating metrics from your sales department

Perform a SWOT analysis; take stock of your company’s strengths, weaknesses, opportunities, and threats

Set big picture goals that take your mission, vision, values, data, and SWOT analysis into account

2. Translate the strategic plan into tactical steps

At this point, it’s time to create tactical plans. Bring in middle managers to help do the following:

Define short-term goals—quarterly goals are common—that support the strategic plan for each department, such as setting a quota for the sales team so the company can meet its strategic revenue goal

Develop processes for reviewing goal achievement to make sure strategic and tactical goals are being met, like running a CRM report every quarter and submitting it to the Chief Revenue Officer to check that the sales department is hitting its quota

Develop contingency plans, like what to do in case the sales team’s CRM malfunctions or there’s a data breach

3. Plan daily operations

Operational plans, or the processes that determine how individual employees spend their day, are largely the responsibility of middle managers and the employees that report to them. For example, the process that a sales rep follows to find, nurture, and convert a lead into a customer is an operational plan. Work schedules, customer service workflows, or GDPR policies that protect prospective customers’ information all aid a sales department in reaching its tactical goal—in this case, a sales quota—so they fall under the umbrella of operational plans.

This stage should include setting goals and targets that individual employees should hit during a set period.

Managers may choose to set some plans, such as work schedules, themselves. On the other hand, individual tasks that make up a sales plan may require the input of the entire team. This stage should also include setting goals and targets that individual employees should hit during a set period.

4. Execute the plans

It’s time to put plans into action. Theoretically, activities carried out on a day-to-day basis (defined by the operational plan) should help reach tactical goals, which in turn supports the overall strategic plan.

5. Monitor progress and adjust plans

No plan is complete without periods of reflection and adjustment. At the end of each quarter or the short-term goal period, middle managers should review whether or not they hit the benchmarks established in step two, then submit data-backed reports to C-level executives. For example, this is when the manager of the sales department would run a report analyzing whether or not a new process for managing the sales pipeline helped the team reach its quota. A marketing team, on the other hand, might analyze whether or not their efforts to optimize advertising and landing pages succeeded in generating a certain number of leads for the sales department.

Depending on the outcome of those reviews, your org may wish to adjust parts of its strategic, tactical, or operational plans. For example, if the sales team didn’t meet their quota their manager may decide to make changes to their sales pipeline operational plan.

These templates and examples can help you start thinking about how to format your organizational plan.

This is a single page two-year strategic plan for a fictional corporation. Notice that the goals listed in the “Strategic Objectives and Organization Goals” section follow the SMART goals model: They’re specific, measurable, actionable, relevant, and time-based.

Workforce Planning

Companies need to use workforce planning to analyze, forecast, and plan for the future of their personnel. Workforce planning helps identify skill gaps, inefficiencies, opportunities for employee growth, and to prepare for future staffing needs.

Use Pingboard as a tool to plan and unite your workforce. Start today for free !

This is a two-year action plan for an administration, which could also be described as a tactical plan. Organization-wide goals—aka strategic goals—that are relevant to this department are listed in the top section, while the more tactical goals for the manager of this department are listed below.

Check out this strategic plan template . You’ll notice that tasks for an individual employee fall under operational planning. Note the space within each item for the manager to leave feedback for the employee.

Organizational Planning is Vital for a Successful Business

While organizational planning is a long and complex process, it’s integral to the success of your company. Luckily, the process becomes more automatic and intuitive with regular planning and review meetings.

Use Pingboard’s org chart software to help you plan and communicate your strategy. With Pingboard users can build and share multiple versions of their org chart to help with succession plans, organization redesigns, merger and acquisitions plans. Pingboard also helps with hiring plans by allowing you to communicate open roles in your live org chart so employees understand where their company is growing and what roles they can apply for. Pingboard’s employee directory helps find successors for specific roles by allowing managers to search through their workforce for the skills and experience needed to fill a position.

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EntreLeadership: What Are the 5 Stages of Business?

14 Min Read | May 24, 2024

Ever heard of an ultramarathon? It’s a race that’s anywhere from 30 to more than 200 miles long. So to go from couch potato to distance runner, you’d have to commit to loads of blood, sweat and tears. Could you do it? Absolutely! But only with a great plan and the guts to keep going.

The same is true of growing a successful business. A load of hard work stands between the dream that got you started and the impact you want to make. Pushing through the challenges can be exciting and exhausting. Some days you feel on fire. Others you’re completely burned out and even disconnected from your dream. No wonder roughly one business shuts down for every business that opens. 1 Hello, Debbie Downer.

So, how do you beat odds like that? First, understand that every business goes through growing pains. And those pains look different depending on the stage of business you’re in. The secret is to have a plan—a way to identify your stage of business so you know what to expect and what to focus on to carve a path through each challenge.

What is EntreLeadership?

That’s what the EntreLeadership system helps you do. The term “EntreLeadership” (pronounced ON-tray-leadership) represents both the passion of an entrepreneur and the character of a leader. And the EntreLeadership system is the proven way for business owners to lead a team, grow a business, and build a legacy.

This system includes the Stages of Business . These are the same five stages small-business leader Dave Ramsey scratched and clawed his way through as he grew his business into a national brand—Ramsey Solutions. Working with and coaching leaders and business owners for more than three decades has also helped us recognize the universal challenges and opportunities that define the Stages of Business (or what some call the business life cycle) and how to move from one stage to the next.

As you learn and apply the real-life principles and processes Dave learned through the school of hard knocks, you can grow your business from the one-person daily grind of the Treadmill Operator (stage one) and build a life-changing legacy (stage five). Even better, you’ll be equipped not just to build any ol’ business but to scale a business with soul.

Ready to Level Up Your Business?

Find out your Stage of Business with our free assessment and get free resources to help you level up by focusing on the right things at the right time.

What to Expect in Your Business Life Cycle

Before we take a deep dive into the Stages of Business, there’s one more fact every serious business owner must face: There’s no easy button or shortcut for running and growing a thriving business. You have to push through the five unavoidable stages of business. And each stage has a unique set of challenges and requires you to master a new set of skills. 

Yep, that’s right—once you overcome one hurdle, your reward is a new hurdle to clear. So if you’re looking for a get-rich-quick scheme or a way to just sit back and coast through running your business, you’ve come to the wrong place.

Related article : What Is Work Ethic (and How to Build a Strong One in Your Team)?

You probably thought running a business sounded fun—until you realized it would actually run you. Discover the EntreLeadership System—the small-business road map that takes the guesswork out of growth.

Now, are you ready for some good news? Here it is: Applying the five Stages of Business will help you avoid the headaches and hassles of trying other systems that don’t work. (And there are a lot of bad business theories and systems out there that’ll get you nowhere.)

Even better than that, working through these five Stages of Business will help you build a business that means something to you—something that changes lives, families and even communities. Heck, you can even change the world. To advance through the stages, you also have to focus on six drivers. We won't hit on the 6 Drivers of Business here, but get familiar with them so you're clear on how to propel forward faster. 

Ready to get a little dirt under your fingernails? Let’s go!

The Five Stages of Business are:

• Treadmill Operator
• Trailblazer
• Peak Performer
• Legacy Builder

Stage 1: Treadmill Operator

Congratulations! This is the first stage of business, and if you’re here, you’re no longer a wantraprenuer. You’ve worked your tail off and beaten the odds. You’re in business. But the thing is, you’re also stuck in the role of chief everything officer.

Unless you inherited or bought a company, most leaders start in the Treadmill Operator stage. This can be a super exciting place for a season, but that’s exactly what it should be—a season. This isn’t a stage you want to camp out in forever. If you do, it’ll wear you out and take you down.

You might be a Treadmill Operator if:

• You work all day doing the thing that makes the money. Then at night, you do the paperwork, pay vendors, take care of emails, and try to collect payment.
• There’s more to-do list than there is day, so important things like going to your kid’s soccer games or taking your spouse on a date feel nearly impossible.
• Your success—being good at lots of things and afraid to pass off responsibilities—has trapped you in your business.
• You’re burned out.

What’s the primary Treadmill Operator business problem?

Too much of the business relies on you. Your core revenue comes from you doing the thing your business is built on.

What can you look forward to when you overcome the problem?

Most of the business results are generated without you.

Key things to learn:

If earning all the revenue falls on you, you really don’t own a business—you own a job. If you want to lead a business that thrives, you have to stop letting your business run you and start running your business. Then, and only then, most of your business results can be generated without you. You probably already know that, so the question is: “How do I get off this flipping treadmill?” These are the critical skills you have to learn to move past this stage:

• Time management
• Business budgeting

You’ve got to do plenty of other things to stay in business, like pay the light bill and provide good customer service. But not developing these four skills will hold you back more than anything else. Once you generate margin with your time and money, hire reliable help, and get nonessentials off your plate, you can squeeze in time for marketing and strategic planning that will help you increase your impact.

You’ll also grow your business enough to afford to bring on more team members. Remember, the less you need to be the doer, the more you can be the leader. In short, you’ll work your way off the treadmill and into leading a team. And that will land you right in the Pathfinder stage.

Stage 2: Pathfinder

The biggest blessings in business are the people. And the biggest burdens? Also the people. In the Pathfinder stage, you are now 100% in the people business, which comes with a special set of challenges to overcome.

You might be a Pathfinder if:

• Running your business feels like a game of whack-a-mole. You’re herding cats and putting out fires all day, and your results are all over the place.
• You struggle with some team members who don’t do things the way they need to or don’t care about the business like you do.
• The mission you’re on, the values you live by, and the vision you have for your business are second nature to you but not to your team. That keeps you from moving in a shared direction.

What’s the primary Pathfinder business problem?

You lack clear direction.

Your team is engaged in a shared direction.

Playwright and Nobel Prize winner George Bernard Shaw said the biggest misconception about communication is that it has happened. That’s the risk you run at the Pathfinder stage. To keep you and your team aligned, you need to define and master these critical areas for your business:

• Mission/vision
• Core values
• Role clarity
• Communication

It’s not enough to have mission, vision and values statements in a binder somewhere or even on a poster in the hall. At the Pathfinder stage, you have to work to plant all of that into the hearts and minds of every team member so it shapes their actions and decision-making. That means you get to become the chief reminding officer. And if you get sick of reminding your team of your mission, vision and values—good! That means you’re just starting to repeat them enough.

What’s another leadership task you now get to take on? Getting work done and achieving goals with and through a group of people . You’ll start to see better communication and people influence happen as you master the Pathfinder stage. And as you and your team all pull together in the same direction, you’ll build momentum that leads you to the Trailblazer stage of business.

Related article :  Mastermind Groups: What Are They, and How Can They Help You Grow Your Business?

Stage 3: Trailblazer

One thing you’ll notice as you hit the Trailblazer stage in your business is speed—as in work’s coming at you almost faster than you can keep up with. You and your team have the tiger by the tail, but it could turn around and bite you if you’re all stretched too thin to manage it.

You might be a Trailblazer if:

• You’re moving fast and making gains, but you don’t have a clear plan of where you’re going (let alone how to get there). You’re more reactionary than intentional.
• You’re ready to develop leaders who are so in sync with you that they can finish your sentences.
• You get glimpses of ways you could scale your business but are thrilled and terrified because you lack repeatable processes.
• You know company culture matters but don’t have time to build it.

What’s the primary Trailblazer business problem?

You lack the leaders and plan to scale your business.

You have a leadership team who’s executing a plan that’s scaling your business.

In this stage, your number one aim is to create a strategic, scalable plan along with a solid leadership team to get ’er done. To help you manage the speed and scope of your business, you need bulletproof processes and systems that get repeatable results at scale. In the early days, getting stuff done by brute force was fine, but it’s time to work smarter, not just harder. (If someone told you blazing new trails so you can grow your business isn’t hard work, they lied to you). Your most important objectives now become:

• Process improvement
• Leadership development
• Intentional culture
• Organizational maturity

Once you build a leadership team that functions as one team with one dream, you’re on your way to making your desired future a reality. And when you level up your leadership, your systems and your company culture, you’ll naturally blaze on to the next stage, which is the peak of your potential Related article : Leadership Development: What It Is and 7 Signs You Need to Invest in Leadership Team Development

Stage 4: Peak Performer

At this stage of the business life cycle, you’re no longer a one-person show. You’re part of an entire company that’s thinking about how to serve people, grow profits, and take performance to the next level. You’ve got the wind to your back, and you’re sailing. Well done! But there’s a tricky new challenge just waiting to take that wind right out of your sails. It’s called complacency.

You might be a Peak Performer if:

• Business is doing great, but you risk relying more on what you’ve already done well than what you need to do next to stay competitive.
• You can afford to be more hands off in the daily operations of delivering your product or service.
• You’re investing most of your time in developing leaders.
• Your team is all in with fulfilling your mission.

What’s the primary Peak Performer business problem?

Your business has become too comfortable.

You and your team have a relentless culture of getting better.

As your business continues to grow, Peak Performers empower a deep bench of leaders to carry out the mission, vision and strategy of the business. But no matter how successful you are, you have to keep fighting for your business and its culture. Running on autopilot slowly weakens the culture that got you this far.

Maybe you’ve heard this saying from author and humorist Mark Twain, “I’m in favor of progress; it’s change I don’t like.” Peak Performers can never afford to shy away from change. So how do you stay on top of your game? You learn how to sustain success through change by digging deep into your business so you can:

• Reconnect to your mission
• Inspire your team
• Reflect and respond
• Disrupt the marketplace

You’re a freaking Peak Performer. Now’s definitely not the time to get too comfortable, or we guarantee your team will too. Lean into why you got into business in the first place, and share your why with your team. That’ll get them more fired up to do work that matters!

You’ll also want to stir some things up at this stage—maybe even break some old habits so you can see your business through fresh eyes. As you reinvent your business (yes, again) and hopefully even generate some market disruption, you’ll create a wave of change instead of being crushed by it. That will lead you to the final stage of the business cycle: Legacy Builder.

Stage 5: Legacy Builder

If you’re a Legacy Builder, you’ve got a lot to be proud of! You’ve built a solid business through a never-quit, servant-leadership attitude, and you’re preparing for the day you’ll hand your company over to a new leader. You want to keep your business in good hands when you step down, but here’s a hard truth: For many business owners, there’s a big difference between what they want and what they’re set up to get.

You might be a Legacy Builder if:

• You spend a lot of energy wondering who should take over your business and how to ready the team for when you step down.
• You’re concerned with how to equip a key leader (and your team) to carry on the work you started with drive, passion and energy.
• You’re looking at your financials and wondering how to value your business.

What’s the primary Legacy Builder business problem?

You don’t have a succession plan—or you have one but haven’t started rolling it out.

The business is successfully running without needing you there.

The Legacy Builder stage can be the most rewarding stage as you reflect on what you’ve built and its impact on others. But to truly be a giant whose shoulders a new generation can stand on, you need a solid succession plan that covers these key areas:

• Reputation transfer
• Financial transfer
• Legal transfer
• Leadership transfer

Those are some big mountains to conquer. We get it. Handing over your business and leadership is a mind game. This is your baby. You’ve spent more than your fair share of sleepless nights and trials by fire growing it into something you’re proud of. And you don’t want anything or anyone to screw that up.

That’s all the more reason to invest a ton of energy into a smooth transfer of trust, power and client care—and to ensure your finances are in order. The last thing you want is to feel like you have to sell your business to your kids to fund your retirement.

When you knock this stage out of the park, you’ll see a new generation of strong, smart, integrity-driven leaders ready to take what you built even further. And you’ll be free to pursue your next big adventure.

What’s Next: Go the Distance

When you have a clear understanding of the stage of business you’re in, you’ll more clearly see how your business is winning, where it’s stuck, and what to do to level up. That’s where EntreLeadership can help.

The stuff you just learned isn’t a far-fetched theory from someone who’s never made payroll. It’s been proven by thousands of business leaders steadily climbing from Treadmill Operator to Legacy Builder. On top of that, it’s the best way to lead your team, grow your business, and create a world-class culture.

• Subscribe to  The EntreLeadership Podcast for advice that can boost your business no matter what stage it's in.
• If you already know your stage of business and you’re ready for more support, join EntreLeadership Elite to accelerate your progress toward the next stage.
• Not sure which stage you’re in? Take our free Stages of Business Assessment . It’ll help you find out where your business stands and give you a plan to overcome what’s holding you back.

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About the author

EntreLeadership

EntreLeadership is the part of Ramsey Solutions that exists to help small-business owners thrive by mastering themselves, rallying their teams, and imposing their will on the marketplace. Thousands of leaders use our proven EntreLeadership System and resources to develop as leaders and grow their businesses. These resources include The EntreLeadership Podcast , EntreLeadership Elite digital membership , books, live events, coaching sessions and business workshops. Learn More.

How to Create a Basic Business Budget

Without a business budget, you’re setting your company up to fail. Learn how to create a budget for a business—and take control of your money.

What Is Company Culture?

What is company culture? It’s the silent language guiding your business’s personality, goals, decisions and practices. And you create culture by default or design.

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From Idea to Maturity, the Five Stages of Business Growth

Whether attempting to increase market share, improve profitability or add staff, every company is trying to grow. Doing so means navigating complex challenges and finding inventive routes forward during that business growth process.

Following are the five stages of the business lifecycle and the steps you can take to increase your chance of success along the way.

Development Stage

Whether you’re pursuing a lifelong dream, or you’ve identified an unmet need in a specific market, taking the initial steps to start your own business can be an exciting time. But with so many factors to consider, the process can also be confusing and challenging. If you’ve made the decision to take the entrepreneurial leap, doing so with a clear plan in place—a roadmap of sorts—will help guide you along the way and prepare you for the inevitable twists and turns that come with starting, and growing, a new business.

So, where do you start? Your best bet is to develop a detailed business plan. Whether you’re in need of funding, a set of goals (and timelines to meet them), a detailed customer profile, or all the above, statistics show that new business owners who start off with a plan are twice as likely to succeed as those that don’t.

With countless resources online to choose from, settling on a specific business plan template can feel a bit overwhelming. But remember, there are no right or wrong answers. The best first step is simply to take one. To help you get started, take a look at this comprehensive, step-by-step business plan resource from Inc. Magazine .

Remember, every business is unique, and your business plan will be as well. One thing that every plan should include, however, is a realistic reflection of your company’s aspirations. It’s also important to understand that most successful business plans regularly evolve over time as reviews are performed, milestones are reached, marketing plans are modified, and new targets and objectives are identified.

While business plans can go a long way in helping you build a business that’s more attractive to outside investors, during these early stages of a business, it’s important to continue creating a foundation that sets you up for success, regardless of outside interests.

That foundation will look different depending on your business’ focus and your ultimate goals, but here are a few items to consider when setting yourself up to take your first big steps into the market:

• Identify how your concept/product/idea fills a need in the market
• Gauge how well accepted it will be in the market
• Determine your ideal outcome – from profits to adoption-rate to overall effectiveness

Start-up Stage

Once you have a plan in place, it’s time to put it into action—kicking off the next stage of business growth: the start-up stage. During this time, you will test the viability of your big ideas—as well as the effectiveness of your capabilities—and this stage can represent a series of make-or-break moments for many small business owners.

But we’re not talking pass/fail tests here. If things aren’t progressing the way you want or need them to be, it’s okay to reassess and pivot as you go. This flexibility will allow you to figure out what changes need to be made to build a healthier, more resilient business. And a large part of building a stronger business comes with attracting (and holding on to) a team that shares your vision and mission—one that can help you do the work necessary to carry out your collective plan.

At this important stage of development, the people you hire can have a lasting, positive impact on the culture, values, and performance that defines your business. That’s why it’s important to build a team that doesn’t just share your goals, but also has the skillset and diversity of ideas necessary to help you achieve them. It’s a tall task, to be sure, but it is possible. And if you’re struggling to find (or attract) the employees you need to make it all happen, there are experienced, outside resources, like G&A, who can help you navigate the recruiting process and build a pipeline of experienced talent.

Another key to creating and maintaining positive momentum, is having the necessary capital on hand to make it all happen. Whether raising money, finding investors, or managing cash flow, knowing your options, and maximizing their potential, can go a long way toward giving you the stability you need to help get your business off the ground.

Read about five different funding options to consider from Forbes .

Ultimately, the start-up stage is when you start to put all the pieces together. As you continue to establish the core elements of your business, a few key areas to focus on include:

• Establishing a customer base and market presence
• Managing accounts in a way that best suits your operation
• Navigating the way your funds are sourced and allocated

Growth Stage

Once you’ve hit a comfortable groove, you’ll be ready to look ahead to the next phase—growing your small business.

The potential for growth is an exciting prospect but knowing how (and when) to make it happen can be a bit of a strategic balancing act. Matching the pace of your increased cash flow and client base without losing sight of the core tenets of your business, for instance, is a struggle that many successful companies have had to navigate.

So, before you fully lean into a growth spurt, take time to review and recalibrate your existing business plan to match your new reality. Doing so can help you more easily determine what is necessary from both a financial and interpersonal perspective. This practice can also provide you with a better understanding of what you’ve achieved, while helping you identify unforeseen opportunities or specific areas for improvement in your business model before plotting your growth strategy.

These strategies from Small Business Development Center experts across the country can help get the ball rolling.

There is no one-size-fits-all solution when planning your next steps, but here are a few simple questions that can help guide your way:

• What’s your small business best at right now?
• What’s driving profits?
• What does the current competitive landscape look like?
• What are current market conditions?

As a growing business, your goal is to identify your market differentiators and what’s driving your profits, then come up with strategies to efficiently expand both.

Expansion Stage

Characterized by a new season of rapid growth and increasing distribution channels, your expansion stage is when you test the boundaries of what is possible for your small business.

At this point in the life of your business, finding ways to increase your market share or revenue streams requires a very detailed understanding of your company’s strengths and what they’re worth on the open market. With that understanding in place, you can begin your evaluation of potential expansion routes and chart a course into new markets to reach new customers. To see how that expansion might look for your business, check out these recommendations from the U.S. Small Business Administration (SBA) .

Regardless of the shape your expansion takes, the key to doing so successfully is to understand the limits of your business while aiming to maximize its potential. One expansion solution, for example, might involve merging with or acquiring another business. Here, the SBA explains the difference between the two and their functions; but these are just two of the many options at your disposal. Expanding with success means finding the solution that best fits your unique business.

Maturity Stage

When your company reaches the maturity stage, it’s the result of a lot of hard work and perseverance, along with a business idea that has proven its worth. Through strategic planning and maneuvering, you and your team created the perfect climate for success—helping you to evolve from start-up to industry standard bearer. It’s now, for mature businesses, that the importance of growth merges with the need for retention and other business interests.

Although maturity is considered a final stage for business growth, it is not a finish line, or a time to sit back, put the evolving strategies and planning aside and coast along for years to come. Businesses are living, breathing entities. Long-term success requires inspiration, continued commitment, and an ability to meet the needs of an ever-changing world and customer base with new products and ideas. Stagnation, at this point, invites greater competition and makes reacting to market trends more cumbersome.

There are any number of ways to keep your offerings fresh and navigate a potential decline stage. Here are a few creative suggestions from the small business section of the Houston Chronicle .

Another way to help ensure continued momentum, is to revisit your business plan once again, and determine whether pivoting to a new expansion stage or considering an exit strategy is the way forward. Evolution, expansion, and reinvention are the hallmarks of any business with a long history of success. If you take into consideration what’s right for you, your team, and your business, the sky's the limit.

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About G&A

As your company grows, so do your responsibilities. For administrative support, access to better, more affordable benefits, comprehensive HR expertise, and more time to focus on the strategic direction of your business, HR outsourcing could be a great option for you and your team. For more information on what a PEO can offer your business, contact one of our experienced business advisors

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More From Forbes

Business life cycle spectrum: where are you.

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Every business goes through four phases of a life cycle: startup, growth, maturity and renewal/rebirth or decline. Understanding what phase you are in can make a huge difference in the strategic planning and operations of your business. I’ve met many business owners who believe they are growing because sales are increasing at 2% each year when they're actually declining because they are losing small customers and only slightly growing big ones. These owners aren’t investing in the necessary systems and people to begin a renewal phase. Alternatively, many businesses in the growth phase aren’t allocating the proper resources to fuel the continued growth and miss valuable market share.

How do you identify which phase your business has entered, and what can you do about it? Here are the telltale signs of each phase and how to ensure success at every step.

During the startup phase, you spend your time meeting people, coming up with new ways to sell your products or services and consistently implementing new ideas. At this point, you won’t have many processes and you should be tweaking your business model to get a sense of the market and how to turn a profit. Your employees are wearing many hats. Few job descriptions and titles should exist because you're still creating a corporate structure.

Although it's an exciting time, it's where most businesses fail. The cash demands often mean you can only underpay yourself and key employees for so long because you'll only retain people for a short period before they will feel like they need to move out to move up in their careers. Use this time to figure out a business model that allows for sustainable cash flow, consistent growth and the ability to hire other people to run it. A business that can't succeed without you working 100 hours per week as the sole “chief, cook and bottle washer” won't grow.

In the growth phase, your clients should be able to explain your business model to other prospects. Keep your pricing level with modest increases for new clients. Existing client relationships should be maturing past the three- to four-year mark. Turnover should be decreasing and you should no longer be worried about making payroll and keeping employees.

The growth phase is where your business solidifies its stance in the marketplace. Turn your focus inward as you build teams and hire higher-level people to run operations. Spend your time on activities that help the company grow and identify what barriers could inhibit your growth. Take the time to strengthen your relationships with clients. Invest in your employees and push them to take more ownership of both internal processes and client relationships.

The growth phase will require investment. You will have to give back profitability to fund growth or seek outside investment capital either through investors or debt. With investors, you give up equity and gain advisors. With debt, you retain all your equity but will likely have to sign personal guarantees with banks to secure funding.

Your business should be growing about 5% annually and your first employees are now reaching eight- to ten-year tenure. You should feel more secure than you have at any other point since you started out. You are probably able to take regular dividends out of the company. Professional management should be running the day-to-day business. And while some emergencies demand your attention, things are relatively predictable.

Mature businesses may not set the world on fire, but they are dependable and consistent. Many mature businesses have a strong cash position and grow through acquisition or spin-offs of other product lines. Mature businesses can defend their market position and expand into new territories using their brand recognition. Operations are relatively smooth and people don't feel burned out. Revenue is steady and predictable. Enjoy this period but be on the lookout for signs that you need to start making a change. At this point, you’ll be able to decide to cash out or reinvest in the business to further growth and sustainability.

Renewal/Decline

Many owners whose businesses are in decline have no idea. They feel that that the top customers they have are growing and demanding more of their services. They see the market as relatively stable.

If revenue has declined for three consecutive quarters, you probably entered the declining phase two or so years ago. Take action and start looking for ways to innovate. If owners are focused on what they can take out of the business before they retire and aren’t willing to invest in new technology, people or marketing, it’s a sign that they're in decline.

If this is you, then you need to decide to cash out or reinvest. Most businesses don’t begin investing in the renewal phase until they are already in a state of decline. Strong business leaders identify that their business and/or the market is changing and will decide to start renewal efforts early.

If you choose to cash out, assemble a team of investment bankers, accountants and others knowledgeable about mergers and acquisition.

If you decide to reinvest in the business, talk with sales and marketing to figure out how to pivot to meet changes in the market. You might need to modify your current offering to meet the needs of new customers or innovate a completely new business. Either way, it’s going to cost money and time.

Every business falls somewhere on this spectrum and many owners never take the time to identify where they are and take action. According to the Exit Planning Institute , 80% of businesses with less than $50 million in annual revenue never sell. Their owners don’t acknowledge where they are in the business life spectrum or make a decision to change. By the time they decide to sell, their business isn’t worth much to potential buyers. You don’t want to get stuck in this situation.

Take honest stock of which of these phases your business is currently in and ask the tough questions. Are you doing the right activities now to ensure your business will have lasting power?

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