From “How to Write a Great Business Plan” by William A. Sahlman. Harvard Business Review, July-August, 1997.
Jeremie Spitzer and Paul G. Silva talked to us about their experience creating a business plan for Zform, a software entertainment company that creates fully accessible games for both blind and sighted communities.
Spitzer says that before actually sitting down to write the business plan for Zform, he hadn’t thought at all about marketing. He soon realized that he needed to do some research and identify the competition.
“Don’t just jump into a new venture [without planning] because you will drown in the small details and won’t even realize that you’re way off base. A business plan forces you to think of all the details that you wouldn’t normally think about. When you write your plans down on paper, you have to be clear. The process of writing forces you to work out the details.”
Spitzer emphasizes that there is no such thing as a final plan. “You need to accept and be comfortable with the fact that your business plan is a live document that will always be changing.”
Silva suggests looking to others for advice. “Planning is essentially answering questions that have already been laid out for you by people that are experienced and know exactly what will hurt your venture if you don’t plan. The process of planning was ten times more valuable than the actual business plan itself.”
Silva believes in learning from others’ mistakes. He regularly reads the “Postmortem” section of Game Developer magazine, which talks about games that have failed and why they have failed.
Silva advises new venture seekers, “Talk to an industry veteran who has experienced failure, and ask why.“
Another viewpoint on business plans comes from Phyl Speser of Foresight Science & Technology. “Most folks will disagree with me, but I think [business plans] are highly overrated. Boeing never had a business plan until late in the last century. They knew what they did: they built airplanes. If you’re going out for venture capital money, you need a twenty+ page plan. If you’re not, you usually need a much smaller one. Essentially, you need as much of a plan as is necessary for your team or your investors. Otherwise, don’t waste the time.”
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10 Characteristics of Successful Entrepreneurs
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Multiple factors go into starting a successful business venture, including a strong concept and initial funding. But, perhaps the most important ingredient is the entrepreneur. These are individuals who must transform their ideas into a fully operational business.
If you’re thinking about launching your own venture, you might be wondering if you have what it takes to be an entrepreneur . But first, what’s an entrepreneur, and what do they do?
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What Is Entrepreneurship?
While entrepreneurship is commonly thought of as the process of starting a business, there are several nuances to consider.
In the HBS Online course Entrepreneurship Essentials , entrepreneurship is defined as “the pursuit of opportunity beyond the resources currently controlled.” An opportunity can be a myriad of things, but the course describes it as "a proposed venture to sell a product or service for which customers are willing to pay more than the required investments and operating costs.”
Entrepreneurs —either as individuals or in teams—discover opportunities throughout their personal and professional lives. They form hypotheses on ways to deliver value to customers and perform structured tests to validate their ideas. This often involves recruiting teammates through networking and investing funds to determine how they’ll deliver a product or service at an acceptable cost.
Great entrepreneurs come from all walks of life. In Entrepreneurship Essentials, it’s noted that “there’s no single personality profile, and it’s important to pay attention to the entrepreneurial team, rather than focus on the individual.” And while that's true, there are certain characteristics and skills that are particularly important for entrepreneurs to have when starting and leading a venture.
Here are 10 characteristics shared by successful entrepreneurs.
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1. Curiosity
Successful entrepreneurs have a distinct personality trait that sets them apart from other organizational leaders: a sense of curiosity. An entrepreneur's ability to remain curious allows them to continuously seek new opportunities. Rather than settling for what they think they know, entrepreneurs ask challenging questions and explore different avenues.
This is validated in the online course Entrepreneurship Essentials , where entrepreneurship is described as a “process of discovery." Without curiosity, entrepreneurs can’t achieve their main objective: discovering new opportunities.
The drive they have to continuously ask questions and challenge the status quo can lead them to valuable discoveries easily overlooked by other business professionals.
2. Willingness to Experiment
Along with curiosity, entrepreneurs require an understanding of structured experimentation, such as design thinking . With each new opportunity, an entrepreneur must run tests to determine if it’s worthwhile to pursue.
For example, if you have an idea for a new product or service that fulfills an underserved demand, you’ll have to ensure customers are willing to pay for it and it meets their needs . To do so, you’ll need to conduct thorough market research and run meaningful tests to validate your idea and determine its potential.
3. Adaptability
Entrepreneurship is an iterative process, and new challenges and opportunities present themselves at every turn. It’s nearly impossible to be prepared for every scenario, but successful business leaders must be adaptable.
This is especially true for entrepreneurs who need to evaluate situations and remain flexible to ensure their business keeps moving forward, no matter what unexpected changes occur.
4. Decisiveness
To be successful, an entrepreneur has to make difficult decisions and stand by them. As a leader, they’re responsible for guiding the trajectory of their business, including every aspect from funding and strategy to resource allocation.
Being decisive doesn’t always mean being correct. Entrepreneurs need the confidence to make challenging decisions and see them through to the end. If the outcome turns out to be less than favorable, the decision to take corrective action is just as important.
Check out our video on the characteristics of successful entrepreneurs below, and subscribe to our YouTube channel for more explainer content!
5. Self-Awareness
A great entrepreneur is aware of their strengths and weaknesses. Rather than letting shortcomings hold them back, they build well-rounded teams that complement their abilities.
In many cases, it’s the entrepreneurial team, rather than an individual, that drives a business venture toward success. When starting your own business, it’s critical to surround yourself with teammates who have complementary talents and contribute to a common goal.
Related: 10 Tips to Help You Boost Team Performance
6. Risk Tolerance
Entrepreneurship is often associated with risk. While it’s true that launching a venture requires an entrepreneur to take risks, they also need to take steps to minimize it.
While many things can go wrong when launching a new venture, many things can go right. According to Entrepreneurship Essentials , entrepreneurs who actively manage the relationship between risk and reward position their companies to “benefit from the upside.”
Successful entrepreneurs are comfortable with encountering some level of risk to reap the rewards of their efforts; however, their risk tolerance is tightly related to their efforts to mitigate it.
7. Comfort with Failure
In addition to risk-management and calculated decision-making , entrepreneurship requires a certain level of comfort with failure.
“Of startups that have more than one employee, 70 percent survive at least two years, half last at least five years, and a quarter last 15 years,” says Harvard Business School Professor William Sahlman in Entrepreneurship Essentials . “Even then, only a small fraction of the survivors get to be significant employers.”
The reasons for failure are vast and encompass everything from a lack of business scalability to low product-market fit . While many of these risks can be avoided, some are inevitable.
Despite this, entrepreneurs must prepare themselves for, and be comfortable with, failure. Rather than let fear hold them back, they maintain a positive attitude to allow the possibility of success to propel them forward.
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8. Persistence
While many successful entrepreneurs are comfortable with the possibility of failing, it doesn’t mean they give up easily. Rather, they see failure as an opportunity to learn and grow.
Throughout the entrepreneurial process, many hypotheses turn out to be wrong, and some ventures fail altogether. Part of what makes an entrepreneur successful is their willingness to learn from mistakes, ask questions, and persist until they reach their goal.
Related: How to Become a More Resilient Leader
9. Innovative Thinking
Innovation often goes hand-in-hand with entrepreneurship. While innovation in business can be defined as an idea that’s both novel and useful, it doesn’t always involve creating an entirely new product or service. Some of the most successful startups have taken existing products or services and drastically improved them to meet the changing needs of the market.
Although innovation doesn’t come naturally to every entrepreneur, it’s a type of strategic mindset that can be cultivated. By developing your problem-solving skills , you’ll be well-equipped to spot innovative opportunities and position your venture for success.
10. Long-Term Focus
Most people associate entrepreneurship with starting a business. While the early stages of launching a venture, such as securing funding , are critical to its success, the process doesn’t end once the business is operational.
According to Entrepreneurship Essentials , “it’s easy to start a business, but hard to grow a sustainable and substantial one. Some of the greatest opportunities in history were discovered well after a venture launched.”
Entrepreneurship is a long-term endeavor, and entrepreneurs must focus on the process from beginning to end to ensure long-term success.
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How to Develop the Qualities of an Entrepreneur
There’s no right or wrong way to be an entrepreneur. Characteristics and behaviors like experimentation, persistence, and innovation can be developed with time, experience, and training. As long as you possess the entrepreneurial spirit, you'll be able to seize opportunities and overcome challenges throughout your journey.
Are you interested in learning the ins and outs of entrepreneurship? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.
This post was updated on August 14, 2023. It was originally published on July 7, 2020.
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The Top 5 Benefits of Having a Business Plan
Whether you’re starting a small business or exploring ways to expand an existing business, a Business Plan is an important tool to help guide your decisions. An effective Business Plan is a roadmap to success, providing clarity on all aspects of your business, from marketing and finance, through to operations, products, services, people and how you will be better than your competitors.
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The purpose of a business plan is to help articulate a strategy for starting or changing your business. It defines how you will achieve your most important business objectives. A good Business Plan should help you to sleep at night if you are a business owner.
For existing businesses, a business plan should be updated annually as a way to guide growth and navigate expansion into new markets. Your plan should include explicit objectives for hiring new employees, what structure you will have, what products and services your business will provide, how you will promote them and how you will finance business operations.
If you are considering starting a business, a Business Plan can help you to check the viability of a business before investing too much time or money in it. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.
The Benefits of Having a Business Plan:
1. Increased Clarity
A business plan can bring clarity to the decision-making process regarding key aspects of the business such as capital investments, leases, resourcing, etc. You can't do everything. A good Business Plan will help you identify business critical priorities and milestones to focus on.
2. Creation of a Marketing Roadmap
Marketing is an important aspect of a business plan. It helps to define your target market(s), target customers and how you will promote and place your product / service to these markets / customers.
3. Support for Funding
Whether you’re seeking credit from a bank or capital from investors, a business plan that answers questions about profitability and revenue generation is often required.
4. Helps to Secure Talent
For a business to succeed, attracting talented workers and partners is vital. Part of a business plan’s purpose is to help bring in the right talent, at the right time. Staff want to understand the vision, how the business will achieve its goals, and how they can contribute to this in their own roles.
5. Provides Structure
A business plan provides structure and defines business management objectives. It becomes a reference tool to keep the business on track with sales targets and operational milestones. When used properly and consulted regularly, it can help measure and manage your priority areas of focus.
Download your Business Plan template for $49.99 + GST here.
Many people engage us as business coaches to take a weekly / fortnightly step-by-step approach to the development of their own Business Plans, with the added benefit of our expertise and guidance throughout the process. In this way, you learn the essential aspects of running a successful business, while crafting your very own business plan over 8-12 weeks.
If you would like more information about how to create an effective Business Plan for your business, with our guidance, then please don't hesitate to contact Business Agility. We are business coaches who are former CEOs and MDs. We know what it takes to be successful in business.
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How To Start A Business In 11 Steps (2024 Guide)
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Updated: Apr 7, 2024, 1:44pm
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Table of Contents
Before you begin: get in the right mindset, 1. determine your business concept, 2. research your competitors and market, 3. create your business plan, 4. choose your business structure, 5. register your business and get licenses, 6. get your finances in order, 7. fund your business, 8. apply for business insurance, 9. get the right business tools, 10. market your business, 11. scale your business, what are the best states to start a business, bottom line, frequently asked questions (faqs).
Starting a business is one of the most exciting and rewarding experiences you can have. But where do you begin? There are several ways to approach creating a business, along with many important considerations. To help take the guesswork out of the process and improve your chances of success, follow our comprehensive guide on how to start a business. We’ll walk you through each step of the process, from defining your business idea to registering, launching and growing your business.
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The public often hears about overnight successes because they make for a great headline. However, it’s rarely that simple—they don’t see the years of dreaming, building and positioning before a big public launch. For this reason, remember to focus on your business journey and don’t measure your success against someone else’s.
Consistency Is Key
New business owners tend to feed off their motivation initially but get frustrated when that motivation wanes. This is why it’s essential to create habits and follow routines that power you through when motivation goes away.
Take the Next Step
Some business owners dive in headfirst without looking and make things up as they go along. Then, there are business owners who stay stuck in analysis paralysis and never start. Perhaps you’re a mixture of the two—and that’s right where you need to be. The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may take minutes while others take a long time. The point is to always take the next step.
Most business advice tells you to monetize what you love, but it misses two other very important elements: it needs to be profitable and something you’re good at. For example, you may love music, but how viable is your business idea if you’re not a great singer or songwriter? Maybe you love making soap and want to open a soap shop in your small town that already has three close by—it won’t be easy to corner the market when you’re creating the same product as other nearby stores.
If you don’t have a firm idea of what your business will entail, ask yourself the following questions:
- What do you love to do?
- What do you hate to do?
- Can you think of something that would make those things easier?
- What are you good at?
- What do others come to you for advice about?
- If you were given ten minutes to give a five-minute speech on any topic, what would it be?
- What’s something you’ve always wanted to do, but lacked resources for?
These questions can lead you to an idea for your business. If you already have an idea, they might help you expand it. Once you have your idea, measure it against whether you’re good at it and if it’s profitable.
Your business idea also doesn’t have to be the next Scrub Daddy or Squatty Potty. Instead, you can take an existing product and improve upon it. You can also sell a digital product so there’s little overhead.
What Kind of Business Should You Start?
Before you choose the type of business to start, there are some key things to consider:
- What type of funding do you have?
- How much time do you have to invest in your business?
- Do you prefer to work from home or at an office or workshop?
- What interests and passions do you have?
- Can you sell information (such as a course), rather than a product?
- What skills or expertise do you have?
- How fast do you need to scale your business?
- What kind of support do you have to start your business?
- Are you partnering with someone else?
- Does the franchise model make more sense to you?
Consider Popular Business Ideas
Not sure what business to start? Consider one of these popular business ideas:
- Start a Franchise
- Start a Blog
- Start an Online Store
- Start a Dropshipping Business
- Start a Cleaning Business
- Start a Bookkeeping Business
- Start a Clothing Business
- Start a Landscaping Business
- Start a Consulting Business
- Start a Photography Business
- Start a Vending Machine Business
Most entrepreneurs spend more time on their products than they do getting to know the competition. If you ever apply for outside funding, the potential lender or partner wants to know: what sets you (or your business idea) apart? If market analysis indicates your product or service is saturated in your area, see if you can think of a different approach. Take housekeeping, for example—rather than general cleaning services, you might specialize in homes with pets or focus on garage cleanups.
Primary Research
The first stage of any competition study is primary research, which entails obtaining data directly from potential customers rather than basing your conclusions on past data. You can use questionnaires, surveys and interviews to learn what consumers want. Surveying friends and family isn’t recommended unless they’re your target market. People who say they’d buy something and people who do are very different. The last thing you want is to take so much stock in what they say, create the product and flop when you try to sell it because all of the people who said they’d buy it don’t because the product isn’t something they’d buy.
Secondary Research
Utilize existing sources of information, such as census data, to gather information when you do secondary research. The current data may be studied, compiled and analyzed in various ways that are appropriate for your needs but it may not be as detailed as primary research.
Conduct a SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis allows you to look at the facts about how your product or idea might perform if taken to market, and it can also help you make decisions about the direction of your idea. Your business idea might have some weaknesses that you hadn’t considered or there may be some opportunities to improve on a competitor’s product.
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Asking pertinent questions during a SWOT analysis can help you identify and address weaknesses before they tank your new business.
A business plan is a dynamic document that serves as a roadmap for establishing a new business. This document makes it simple for potential investors, financial institutions and company management to understand and absorb. Even if you intend to self-finance, a business plan can help you flesh out your idea and spot potential problems. When writing a well-rounded business plan, include the following sections:
- Executive summary: The executive summary should be the first item in the business plan, but it should be written last. It describes the proposed new business and highlights the goals of the company and the methods to achieve them.
- Company description: The company description covers what problems your product or service solves and why your business or idea is best. For example, maybe your background is in molecular engineering, and you’ve used that background to create a new type of athletic wear—you have the proper credentials to make the best material.
- Market analysis: This section of the business plan analyzes how well a company is positioned against its competitors. The market analysis should include target market, segmentation analysis, market size, growth rate, trends and a competitive environment assessment.
- Organization and structure: Write about the type of business organization you expect, what risk management strategies you propose and who will staff the management team. What are their qualifications? Will your business be a single-member limited liability company (LLC) or a corporation ?
- Mission and goals: This section should contain a brief mission statement and detail what the business wishes to accomplish and the steps to get there. These goals should be SMART (specific, measurable, action-orientated, realistic and time-bound).
- Products or services: This section describes how your business will operate. It includes what products you’ll offer to consumers at the beginning of the business, how they compare to existing competitors, how much your products cost, who will be responsible for creating the products, how you’ll source materials and how much they cost to make.
- Background summary: This portion of the business plan is the most time-consuming to write. Compile and summarize any data, articles and research studies on trends that could positively and negatively affect your business or industry.
- Marketing plan: The marketing plan identifies the characteristics of your product or service, summarizes the SWOT analysis and analyzes competitors. It also discusses how you’ll promote your business, how much money will be spent on marketing and how long the campaign is expected to last.
- Financial plan: The financial plan is perhaps the core of the business plan because, without money, the business will not move forward. Include a proposed budget in your financial plan along with projected financial statements, such as an income statement, a balance sheet and a statement of cash flows. Usually, five years of projected financial statements are acceptable. This section is also where you should include your funding request if you’re looking for outside funding.
Learn more: Download our free simple business plan template .
Come Up With an Exit Strategy
An exit strategy is important for any business that is seeking funding because it outlines how you’ll sell the company or transfer ownership if you decide to retire or move on to other projects. An exit strategy also allows you to get the most value out of your business when it’s time to sell. There are a few different options for exiting a business, and the best option for you depends on your goals and circumstances.
The most common exit strategies are:
- Selling the business to another party
- Passing the business down to family members
- Liquidating the business assets
- Closing the doors and walking away
Develop a Scalable Business Model
As your small business grows, it’s important to have a scalable business model so that you can accommodate additional customers without incurring additional costs. A scalable business model is one that can be replicated easily to serve more customers without a significant increase in expenses.
Some common scalable business models are:
- Subscription-based businesses
- Businesses that sell digital products
- Franchise businesses
- Network marketing businesses
Start Planning for Taxes
One of the most important things to do when starting a small business is to start planning for taxes. Taxes can be complex, and there are several different types of taxes you may be liable for, including income tax, self-employment tax, sales tax and property tax. Depending on the type of business you’re operating, you may also be required to pay other taxes, such as payroll tax or unemployment tax.
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When structuring your business, it’s essential to consider how each structure impacts the amount of taxes you owe, daily operations and whether your personal assets are at risk.
An LLC limits your personal liability for business debts. LLCs can be owned by one or more people or companies and must include a registered agent . These owners are referred to as members.
- LLCs offer liability protection for the owners
- They’re one of the easiest business entities to set up
- You can have a single-member LLC
- You may be required to file additional paperwork with your state on a regular basis
- LLCs can’t issue stock
- You’ll need to pay annual filing fees to your state
Limited Liability Partnership (LLP)
An LLP is similar to an LLC but is typically used for licensed business professionals such as an attorney or accountant. These arrangements require a partnership agreement.
- Partners have limited liability for the debts and actions of the LLP
- LLPs are easy to form and don’t require much paperwork
- There’s no limit to the number of partners in an LLP
- Partners are required to actively take part in the business
- LLPs can’t issue stock
- All partners are personally liable for any malpractice claims against the business
Sole Proprietorship
If you start a solo business, you might consider a sole proprietorship . The company and the owner, for legal and tax purposes, are considered the same. The business owner assumes liability for the business. So, if the business fails, the owner is personally and financially responsible for all business debts.
- Sole proprietorships are easy to form
- There’s no need to file additional paperwork with your state
- You’re in complete control of the business
- You’re personally liable for all business debts
- It can be difficult to raise money for a sole proprietorship
- The business may have a limited lifespan
Corporation
A corporation limits your personal liability for business debts just as an LLC does. A corporation can be taxed as a C corporation (C-corp) or an S corporation (S-corp). S-corp status offers pass-through taxation to small corporations that meet certain IRS requirements. Larger companies and startups hoping to attract venture capital are usually taxed as C-corps.
- Corporations offer liability protection for the owners
- The life span of a corporation is not limited
- A corporation can have an unlimited number of shareholders
- Corporations are subject to double taxation
- They’re more expensive and complicated to set up than other business structures
- The shareholders may have limited liability
Before you decide on a business structure, discuss your situation with a small business accountant and possibly an attorney, as each business type has different tax treatments that could affect your bottom line.
Helpful Resources
- How To Set Up an LLC in 7 Steps
- How To Start a Sole Proprietorship
- How To Start a Corporation
- How To Start a Nonprofit
- How To Start a 501(c)(3)
There are several legal issues to address when starting a business after choosing the business structure. The following is a good checklist of items to consider when establishing your business:
Choose Your Business Name
Make it memorable but not too difficult. Choose the same domain name, if available, to establish your internet presence. A business name cannot be the same as another registered company in your state, nor can it infringe on another trademark or service mark that is already registered with the United States Patent and Trademark Office (USPTO).
Business Name vs. DBA
There are business names, and then there are fictitious business names known as “Doing Business As” or DBA. You may need to file a DBA if you’re operating under a name that’s different from the legal name of your business. For example, “Mike’s Bike Shop” is doing business as “Mike’s Bikes.” The legal name of the business is “Mike’s Bike Shop,” and “Mike’s Bikes” is the DBA.
You may need to file a DBA with your state, county or city government offices. The benefits of a DBA include:
- It can help you open a business bank account under your business name
- A DBA can be used as a “trade name” to brand your products or services
- A DBA can be used to get a business license
Register Your Business and Obtain an EIN
You’ll officially create a corporation, LLC or other business entity by filing forms with your state’s business agency―usually the Secretary of State. As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business. You’ll also pay a filing fee. The state will send you a certificate that you can use to apply for licenses, a tax identification number (TIN) and business bank accounts.
Next, apply for an employer identification number (EIN) . All businesses, other than sole proprietorships with no employees, must have a federal employer identification number. Submit your application to the IRS and you’ll typically receive your number in minutes.
Get Appropriate Licenses and Permits
Legal requirements are determined by your industry and jurisdiction. Most businesses need a mixture of local, state and federal licenses to operate. Check with your local government office (and even an attorney) for licensing information tailored to your area.
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Open a Business Bank Account
Keep your business and personal finances separate. Here’s how to choose a business checking account —and why separate business accounts are essential. When you open a business bank account, you’ll need to provide your business name and your business tax identification number (EIN). This business bank account can be used for your business transactions, such as paying suppliers or invoicing customers. Most times, a bank will require a separate business bank account to issue a business loan or line of credit.
Hire a Bookkeeper or Get Accounting Software
If you sell a product, you need an inventory function in your accounting software to manage and track inventory. The software should have ledger and journal entries and the ability to generate financial statements.
Some software programs double as bookkeeping tools. These often include features such as check writing and managing receivables and payables. You can also use this software to track your income and expenses, generate invoices, run reports and calculate taxes.
There are many bookkeeping services available that can do all of this for you, and more. These services can be accessed online from any computer or mobile device and often include features such as bank reconciliation and invoicing. Check out the best accounting software for small business, or see if you want to handle the bookkeeping yourself.
Determine Your Break-Even Point
Before you fund your business, you must get an idea of your startup costs. To determine these, make a list of all the physical supplies you need, estimate the cost of any professional services you will require, determine the price of any licenses or permits required to operate and calculate the cost of office space or other real estate. Add in the costs of payroll and benefits, if applicable.
Businesses can take years to turn a profit, so it’s better to overestimate the startup costs and have too much money than too little. Many experts recommend having enough cash on hand to cover six months of operating expenses.
When you know how much you need to get started with your business, you need to know the point at which your business makes money. This figure is your break-even point.
In contrast, the contribution margin = total sales revenue – cost to make product
For example, let’s say you’re starting a small business that sells miniature birdhouses for fairy gardens. You have determined that it will cost you $500 in startup costs. Your variable costs are $0.40 per birdhouse produced, and you sell them for $1.50 each.
Let’s write these out so it’s easy to follow:
| |
| $500 for the first month |
| 40 cents per birdhouse |
| $1.50 |
| $500/($1.50 - 40 cents) |
| |
This means that you need to sell at least 456 units just to cover your costs. If you can sell more than 456 units in your first month, you will make a profit.
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There are many different ways to fund your business—some require considerable effort, while others are easier to obtain. Two categories of funding exist: internal and external.
Internal funding includes:
- Personal savings
- Credit cards
- Funds from friends and family
If you finance the business with your own funds or with credit cards, you have to pay the debt on the credit cards and you’ve lost a chunk of your wealth if the business fails. By allowing your family members or friends to invest in your business, you are risking hard feelings and strained relationships if the company goes under. Business owners who want to minimize these risks may consider external funding.
External funding includes:
- Small business loans
- Small business grants
- Angel investors
- Venture capital
- Crowdfunding
Small businesses may have to use a combination of several sources of capital. Consider how much money is needed, how long it will take before the company can repay it and how risk-tolerant you are. No matter which source you use, plan for profit. It’s far better to take home six figures than make seven figures and only keep $80,000 of it.
Funding ideas include:
- Invoice factoring: With invoice factoring , you can sell your unpaid invoices to a third party at a discount.
- Business lines of credit: Apply for a business line of credit , which is similar to a personal line of credit. The credit limit and interest rate will be based on your business’s revenue, credit score and financial history.
- Equipment financing: If you need to purchase expensive equipment for your business, you can finance it with a loan or lease.
- Small Business Administration (SBA) microloans: Microloans are up to $50,000 loans that can be used for working capital, inventory or supplies and machinery or equipment.
- Grants: The federal government offers grants for businesses that promote innovation, export growth or are located in historically disadvantaged areas. You can also find grants through local and regional organizations.
- Crowdfunding: With crowdfunding , you can raise money from a large group of people by soliciting donations or selling equity in your company.
Choose the right funding source for your business by considering the amount of money you need, the time frame for repayment and your tolerance for risk.
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You need to have insurance for your business , even if it’s a home-based business or you don’t have any employees. The type of insurance you need depends on your business model and what risks you face. You might need more than one type of policy, and you might need additional coverage as your business grows. In most states, workers’ compensation insurance is required by law if you have employees.
Work With an Agent To Get Insured
An insurance agent can help determine what coverages are appropriate for your business and find policies from insurers that offer the best rates. An independent insurance agent represents several different insurers, so they can shop around for the best rates and coverage options.
Basic Types of Business Insurance Coverage
- Liability insurance protects your business against third-party claims of bodily injury, property damage and personal injury such as defamation or false advertising.
- Property insurance covers the physical assets of your business, including your office space, equipment and inventory.
- Business interruption insurance pays for the loss of income if your business is forced to close temporarily due to a covered event such as a natural disaster.
- Product liability insurance protects against claims that your products caused bodily injury or property damage.
- Employee practices liability insurance covers claims from employees alleging discrimination, sexual harassment or other wrongful termination.
- Workers’ compensation insurance covers medical expenses and income replacement for employees who are injured on the job.
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Business tools can help make your life easier and make your business run more smoothly. The right tools can help you save time, automate tasks and make better decisions.
Consider the following tools in your arsenal:
- Accounting software : Track your business income and expenses, prepare financial statements and file taxes. Examples include QuickBooks and FreshBooks.
- Customer relationship management (CRM) software : This will help you manage your customer relationships, track sales and marketing data and automate tasks like customer service and follow-ups. Examples include Zoho CRM and monday.com.
- Project management software : Plan, execute and track projects. It can also be used to manage employee tasks and allocate resources. Examples include Airtable and ClickUp.
- Credit card processor : This will allow you to accept credit card payments from customers. Examples include Stripe and PayPal.
- Point of sale (POS) : A system that allows you to process customer payments. Some accounting software and CRM software have POS features built-in. Examples include Clover and Lightspeed.
- Virtual private network (VPN) : Provides a secure, private connection between your computer and the internet. This is important for businesses that handle sensitive data. Examples include NordVPN and ExpressVPN.
- Merchant services : When customers make a purchase, the money is deposited into your business account. You can also use merchant services to set up recurring billing or subscription payments. Examples include Square and Stripe.
- Email hosting : This allows you to create a professional email address with your own domain name. Examples include G Suite and Microsoft Office 365.
Many business owners spend so much money creating their products that there isn’t a marketing budget by the time they’ve launched. Alternatively, they’ve spent so much time developing the product that marketing is an afterthought.
Create a Website
Even if you’re a brick-and-mortar business, a web presence is essential. Creating a website doesn’t take long, either—you can have one done in as little as a weekend. You can make a standard informational website or an e-commerce site where you sell products online. If you sell products or services offline, include a page on your site where customers can find your locations and hours. Other pages to add include an “About Us” page, product or service pages, frequently asked questions (FAQs), a blog and contact information.
Optimize Your Site for SEO
After getting a website or e-commerce store, focus on optimizing it for search engines (SEO). This way, when a potential customer searches for specific keywords for your products, the search engine can point them to your site. SEO is a long-term strategy, so don’t expect a ton of traffic from search engines initially—even if you’re using all the right keywords.
Create Relevant Content
Provide quality digital content on your site that makes it easy for customers to find the correct answers to their questions. Content marketing ideas include videos, customer testimonials, blog posts and demos. Consider content marketing one of the most critical tasks on your daily to-do list. This is used in conjunction with posting on social media.
Get Listed in Online Directories
Customers use online directories like Yelp, Google My Business and Facebook to find local businesses. Some city halls and chambers of commerce have business directories too. Include your business in as many relevant directories as possible. You can also create listings for your business on specific directories that focus on your industry.
Develop a Social Media Strategy
Your potential customers are using social media every day—you need to be there too. Post content that’s interesting and relevant to your audience. Use social media to drive traffic back to your website where customers can learn more about what you do and buy your products or services.
You don’t necessarily need to be on every social media platform available. However, you should have a presence on Facebook and Instagram because they offer e-commerce features that allow you to sell directly from your social media accounts. Both of these platforms have free ad training to help you market your business.
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To scale your business, you need to grow your customer base and revenue. This can be done by expanding your marketing efforts, improving your product or service, collaborating with other creators or adding new products or services that complement what you already offer.
Think about ways you can automate or outsource certain tasks so you can focus on scaling the business. For example, if social media marketing is taking up too much of your time, consider using a platform such as Hootsuite to help you manage your accounts more efficiently. You can also consider outsourcing the time-consumer completely.
You can also use technology to automate certain business processes, including accounting, email marketing and lead generation. Doing this will give you more time to focus on other aspects of your business.
When scaling your business, it’s important to keep an eye on your finances and make sure you’re still profitable. If you’re not making enough money to cover your costs, you need to either reduce your expenses or find ways to increase your revenue.
Build a Team
As your business grows, you’ll need to delegate tasks and put together a team of people who can help you run the day-to-day operations. This might include hiring additional staff, contractors or freelancers.
Resources for building a team include:
- Hiring platforms: To find the right candidates, hiring platforms, such as Indeed and Glassdoor, can help you post job descriptions, screen résumés and conduct video interviews.
- Job boards: Job boards such as Craigslist and Indeed allow you to post open positions for free.
- Social media: You can also use social media platforms such as LinkedIn and Facebook to find potential employees.
- Freelance platforms: Using Upwork, Freelancer and Fiverr can help you find talented freelancers for one-time or short-term projects. You can also outsource certain tasks, such as customer service, social media marketing or bookkeeping.
You might also consider partnering with other businesses in your industry. For example, if you’re a wedding planner, you could partner with a florist, photographer, catering company or venue. This way, you can offer your customers a one-stop shop for all their wedding needs. Another example is an e-commerce store that partners with a fulfillment center. This type of partnership can help you save money on shipping and storage costs, and it can also help you get your products to your customers faster.
To find potential partnerships, search for businesses in your industry that complement what you do. For example, if you’re a web designer, you could partner with a digital marketing agency.
You can also search for businesses that serve the same target market as you but offer different products or services. For example, if you sell women’s clothing, you could partner with a jewelry store or a hair salon.
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To rank the best states to start a business in 2024, Forbes Advisor analyzed 18 key metrics across five categories to determine which states are the best and worst to start a business in. Our ranking takes into consideration factors that impact businesses and their ability to succeed, such as business costs, business climate, economy, workforce and financial accessibility in each state. Check out the full report .
Starting a small business takes time, effort and perseverance. But if you’re willing to put in the work, it can be a great way to achieve your dreams and goals. Be sure to do your research, create a solid business plan and pivot along the way. Once you’re operational, don’t forget to stay focused and organized so you can continue to grow your business.
How do I start a small business with no money?
There are several funding sources for brand-new businesses and most require a business plan to secure it. These include the SBA , private grants, angel investors, crowdfunding and venture capital.
What is the best business structure?
The best business structure for your business will depend entirely on what kind of company you form, your industry and what you want to accomplish. But any successful business structure will be one that will help your company set realistic goals and follow through on set tasks.
Do I need a business credit card?
You don’t need one, but a business credit card can be helpful for new small businesses. It allows you to start building business credit, which can help you down the road when you need to take out a loan or line of credit. Additionally, business credit cards often come with rewards and perks that can save you money on business expenses.
Do I need a special license or permit to start a small business?
The answer to this question will depend on the type of business you want to start and where you’re located. Some businesses, such as restaurants, will require a special permit or license to operate. Others, such as home daycare providers, may need to register with the state.
How much does it cost to create a business?
The cost of starting a business will vary depending on the size and type of company you want to create. For example, a home-based business will be less expensive to start than a brick-and-mortar store. Additionally, the cost of starting a business will increase if you need to rent or buy commercial space, hire employees or purchase inventory. You could potentially get started for free by dropshipping or selling digital goods.
How do I get a loan for a new business?
The best way to get a loan for a new business is to approach banks or other financial institutions and provide them with a business plan and your financial history. You can also look into government-backed loans, such as those offered by the SBA. Startups may also be able to get loans from alternative lenders, including online platforms such as Kiva.
Do I need a business degree to start a business?
No, you don’t need a business degree to start a business. However, acquiring a degree in business or a related field can provide you with the understanding and ability to run an effective company. Additionally, you may want to consider taking some business courses if you don’t have a degree to learn more about starting and running a business. You can find these online and at your local Small Business Administration office.
What are some easy businesses to start?
One of the easiest businesses to start also has the lowest overhead: selling digital goods. This can include items such as e-books, online courses, audio files or software. If you have expertise in a particular area or niche, this is a great option for you. Dropshipping is also a great option because you don’t have to keep inventory. You could also buy wholesale products or create your own. Once you create your product, you can sell it through your own website or third-party platforms such as Amazon or Etsy.
What is the most profitable type of business?
There is no one answer to this question because the most profitable type of business will vary depending on a number of factors, such as your industry, location, target market and business model. However, some businesses tend to be more profitable than others, such as luxury goods, high-end services, business-to-business companies and subscription-based businesses. If you’re not sure what type of business to start, consider your strengths and interests, as well as the needs of your target market, to help you choose a profitable business idea.
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12.8: Reading- Create Your Business Plan
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Executive Summary
This written guide will help you create a business plan and map out how you will start and run your business successfully.
The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest.
The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document.
Below are several key points that your executive summary should include based on the stage of your business.
If You Are an Established Business
If you are an established business, be sure to include the following information:
- The Mission Statement —This explains what your business is all about. It should be between several sentences and a paragraph.
- Company Information —Include a short statement that covers when your business was formed, the names of the founders and their roles, your number of employees, and your business location(s).
- Growth Highlights —Include examples of company growth, such as financial or market highlights (for example, “XYZ Firm increased profit margins and market share year-over-year since its foundation). Graphs and charts can be helpful in this section.
- Your Products/Services —Briefly describe the products or services you provide.
- Financial Information —If you are seeking financing, include any information about your current bank and investors.
- Summarize future plans —Explain where you would like to take your business.
With the exception of the mission statement, all of the information in the executive summary should be covered in a concise fashion and kept to one page. The executive summary is the first part of your business plan many people will see, so each word should count.
If You Are a Startup or New Business
If you are just starting a business, you won’t have as much information as an established company. Instead, focus on your experience and background as well as the decisions that led you to start this particular enterprise.
Demonstrate that you have done thorough market analysis. Include information about a need or gap in your target market, and how your particular solutions can fill it. Convince the reader that you can succeed in your target market, then address your future plans.
Remember, your Executive Summary will be the last thing you write. So the first section of the business plan that you will tackle is the Company Description section.
Company Description
This section of your business plan provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business and its unique proposition.
What to Include in Your Company Description
- Describe the nature of your business and list the marketplace needs that you are trying to satisfy.
- Explain how your products and services meet these needs.
- List the specific consumers, organizations or businesses that your company serves or will serve.
- Explain the competitive advantages that you believe will make your business a success such as your location, expert personnel, efficient operations, or ability to bring value to your customers.
Next, you’ll need to move on to the Market Analysis section of your plan.
Market Analysis
The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions.
What to Include in Your Market Analysis
- Industry Description and Outlook —Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.
- Information About Your Target Market —Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:
- Distinguishing Characteristics —What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?
- Size of the Primary Target Market —In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group?
- How Much Market Share Can You Gain? —What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.
- Pricing and Gross Margin Targets —Define your pricing structure, gross margin levels, and any discount that you plan to use.
- When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix (which we will discuss later).
- Market share
- Strengths and weaknesses
- How important is your target market to your competitors?
- Are there any barriers that may hinder you as you enter the market?
- What is your window of opportunity to enter the market?
- Are there any indirect or secondary competitors who may impact your success?
- What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?
- Regulatory Restrictions —Include any customer or governmental regulatory requirements affecting your business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business.
Once you’ve completed this section, you can move on to the Organization and Management section of your business plan.
Organization and Management
This section should include: your company’s organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.
Who does what in your business? What is their background and why are you bringing them into the business as board members or employees? What are they responsible for? These may seem like unnecessary questions to answer in a one- or two-person organization, but the people reading your business plan want to know who’s in charge, so tell them. Give a detailed description of each division or department and its function.
This section should include who’s on the board (if you have an advisory board) and how you intend to keep them there. What kind of salary and benefits package do you have for your people? What incentives are you offering? How about promotions? Reassure your reader that the people you have on staff are more than just names on a letterhead.
Organizational Structure
A simple but effective way to lay out the structure of your company is to create an organizational chart with a narrative description. This will prove that you’re leaving nothing to chance, you’ve thought out exactly who is doing what, and there is someone in charge of every function of your company. Nothing will fall through the cracks, and nothing will be done three or four times over. To a potential investor or employee, that is very important.
Ownership Information
This section should also include the legal structure of your business along with the subsequent ownership information it relates to. Have you incorporated your business? If so, is it a C or S corporation? Or perhaps you have formed a partnership with someone. If so, is it a general or limited partnership? Or maybe you are a sole proprietor.
The following important ownership information should be incorporated into your business plan:
- Names of owners
- Percentage ownership
- Extent of involvement with the company
- Forms of ownership (i.e., common stock, preferred stock, general partner, limited partner)
- Outstanding equity equivalents (i.e., options, warrants, convertible debt)
- Common stock (i.e., authorized or issued)
- Management Profiles
- Experts agree that one of the strongest factors for success in any growth company is the ability and track record of its owner/management team, so let your reader know about the key people in your company and their backgrounds. Provide resumes that include the following information:
- Position (include brief position description along with primary duties)
- Primary responsibilities and authority
- Unique experience and skills
- Prior employment
- Special skills
- Past track record
- Industry recognition
- Community involvement
- Number of years with company
- Compensation basis and levels (make sure these are reasonable — not too high or too low)
- Be sure you quantify achievements (e.g. “Managed a sales force of ten people,” “Managed a department of fifteen people,” “Increased revenue by 15 percent in the first six months,” “Expanded the retail outlets at the rate of two each year,” “Improved the customer service as rated by our customers from a 60 percent to a 90 percent rating”)
Also, highlight how the people surrounding you complement your own skills. If you’re just starting out, show how each person’s unique experience will contribute to the success of your venture.
Board of Directors’ Qualifications
The major benefit of an unpaid advisory board is that it can provide expertise that your company cannot otherwise afford. A list of well-known, successful business owners/managers can go a long way toward enhancing your company’s credibility and perception of management expertise.
If you have a board of directors, be sure to gather the following information when developing the outline for your business plan:
- Positions on the board
- Extent of involvement with company
- Historical and future contribution to the company’s success
Service or Product Line
Once you’ve completed the Organizational and Management section of your plan, the next part of your business plan is where you describe your service or product, emphasizing the benefits to potential and current customers. Focus on why your particular product will fill a need for your target customers.
What to Include in Your Service or Product Line Section
- A Description of Your Product/Service —Include information about the specific benefits of your product or service – from your customers’ perspective. You should also talk about your product or service’s ability to meet consumer needs, any advantages your product has over that of the competition, and the current development stage your product is in (e.g., idea, prototype).
- Details About Your Product’s Life Cycle —Be sure to include information about where your product or service is in its life cycle, as well as any factors that may influence its cycle in the future.
- Intellectual Property —If you have any existing, pending, or any anticipated copyright or patent filings, list them here. Also disclose whether any key aspects of a product may be classified as trade secrets. Last, include any information pertaining to existing legal agreements, such as nondisclosure or non-compete agreements.
- Research and Development (R&D) Activities —Outline any R&D activities that you are involved in or are planning. What results of future R&D activities do you expect? Be sure to analyze the R&D efforts of not only your own business, but also of others in your industry.
Marketing and Sales
Once you’ve completed the Service or Product Line section of your plan, the next part of your business plan should focus on your marketing and sales management strategy for your business.
Marketing is the process of creating customers, and customers are the lifeblood of your business. In this section, the first thing you want to do is define your marketing strategy. There is no single way to approach a marketing strategy; your strategy should be part of an ongoing business-evaluation process and unique to your company. However, there are common steps you can follow which will help you think through the direction and tactics you would like to use to drive sales and sustain customer loyalty.
An overall marketing strategy should include four different strategies:
- A market penetration strategy.
- A growth strategy. This strategy for building your business might include: an internal strategy such as how to increase your human resources, an acquisition strategy such as buying another business, a franchise strategy for branching out, a horizontal strategy where you would provide the same type of products to different users, or a vertical strategy where you would continue providing the same products but would offer them at different levels of the distribution chain.
- Channels of distribution strategy. Choices for distribution channels could include original equipment manufacturers (OEMs), an internal sales force, distributors, or retailers.
- Communication strategy. How are you going to reach your customers? Usually a combination of the following tactics works the best: promotions, advertising, public relations, personal selling, and printed materials such as brochures, catalogs, flyers, etc.
After you have developed a comprehensive marketing strategy, you can then define your sales strategy. This covers how you plan to actually sell your product.
Your overall sales strategy should include two primary elements:
- A sales force strategy. If you are going to have a sales force, do you plan to use internal or independent representatives? How many salespeople will you recruit for your sales force? What type of recruitment strategies will you use? How will you train your sales force? What about compensation for your sales force?
- Your sales activities. When you are defining your sales strategy, it is important that you break it down into activities. For instance, you need to identify your prospects. Once you have made a list of your prospects, you need to prioritize the contacts, selecting the leads with the highest potential to buy first. Next, identify the number of sales calls you will make over a certain period of time. From there, you need to determine the average number of sales calls you will need to make per sale, the average dollar size per sale, and the average dollar size per vendor.
Next, if you are seeking financing for your business, you’ll need to complete the next part of your plan—Funding Request.
Funding Request
If you are seeking funding for your business venture, use this section to outline your requirements.
Your funding request should include the following information:
- Your current funding requirement
- Any future funding requirements over the next five years
- How you intend to use the funds you receive: Is the funding request for capital expenditures? Working capital? Debt retirement? Acquisitions? Whatever it is, be sure to list it in this section.
- Any strategic financial situational plans for the future, such as: a buyout, being acquired, debt repayment plan, or selling your business. These areas are extremely important to a future creditor, since they will directly impact your ability to repay your loan(s).
When you are outlining your funding requirements, include the amount you want now and the amount you want in the future. Also include the time period that each request will cover, the type of funding you would like to have (e.g., equity, debt), and the terms that you would like to have applied.
To support your funding request you’ll also need to provide historical and prospective financial information. Once you have completed your funding request, move on to the next part of your plan—Financial Projections.
Financial Projections
You should develop the Financial Projections section after you’ve analyzed the market and set clear objectives. That’s when you can allocate resources efficiently. The following is a list of the critical financial statements to include in your business plan packet.
Historical Financial Data
If you own an established business, you will be requested to supply historical data related to your company’s performance. Most creditors request data for the last three to five years, depending on the length of time you have been in business.
The historical financial data to include are your company’s income statements, balance sheets, and cash flow statements for each year you have been in business (usually for up to three to five years). Often, creditors are also interested in any collateral that you may have that could be used to ensure your loan, regardless of the stage of your business.
Prospective Financial Data
All businesses, whether startup or growing, will be required to supply prospective financial data. Most of the time, creditors will want to see what you expect your company to be able to do within the next five years. Each year’s documents should include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, you should supply monthly or quarterly projections. After that, you can stretch it to quarterly and/or yearly projections for years two through five.
Make sure that your projections match your funding requests; creditors will be on the lookout for inconsistencies. It’s much better if you catch mistakes before they do. If you have made assumptions in your projections, be sure to summarize what you have assumed. This way, the reader will not be left guessing.
Finally, include a short analysis of your financial information. Include a ratio and trend analysis for all of your financial statements (both historical and prospective). Since pictures speak louder than words, you may want to add graphs of your trend analysis (especially if they are positive).
Next, you may want to include an Appendix to your plan. This can include items such as your credit history, resumes, letters of reference, and any additional information that a lender may request.
The Appendix should be provided to readers on an as-needed basis. In other words, it should not be included with the main body of your business plan. Your plan is your communication tool; as such, it will be seen by a lot of people. Some of the information in the business section you will not want everyone to see, but specific individuals (such as creditors) may want access to this information to make lending decisions. Therefore, it is important to have the appendix within easy reach.
The appendix would include:
- Credit history (personal and business)
- Resumes of key managers
- Product pictures
- Letters of reference
- Details of market studies
- Relevant magazine articles or book references
- Licenses, permits or patents
- Legal documents
- Copies of leases
- Building permits
- List of business consultants, including attorney and accountant
Any copies of your business plan should be controlled; keep a distribution record. This will allow you to update and maintain your business plan on an as-needed basis. Remember, too, that you should include a private placement disclaimer with your business plan if you plan to use it to raise capital.
How to Make Your Business Plan Stand Out
One of the first steps to business planning is determining your target market and why they would want to buy from you.
For example, is the market you serve the best one for your product or service? Are the benefits of dealing with your business clear and are they aligned with customer needs? If you’re unsure about the answers to any of these questions, take a step back and revisit the foundation of your business plan.
The following tips can help you clarify what your business has to offer, identify the right target market for it and build a niche for yourself.
Be Clear About What You Have to Offer
Ask yourself: Beyond basic products or services, what are you really selling? Consider this example: Your town probably has several restaurants all selling one fundamental product—food. But each is targeted at a different need or clientele.
One might be a drive-thru fast food restaurant, perhaps another sells pizza in a rustic Italian kitchen, and maybe there’s a fine dining seafood restaurant that specializes in wood-grilled fare. All these restaurants sell meals, but they sell them to targeted clientele looking for the unique qualities each has to offer. What they are really selling is a combination of product, value, ambience and brand experience.
When starting a business, be sure to understand what makes your business unique. What needs does your product or service fulfill? What benefits and differentiators will help your business stand out from the crowd?
Don’t Become a Jack of All Trades—Learn to Strategize
It’s important to clearly define what you’re selling. You do not want to become a jack-of-all trades and master of none because this can have a negative impact on business growth. As a smaller business, it’s often a better strategy to divide your products or services into manageable market niches. Small operations can then offer specialized goods and services that are attractive to a specific group of prospective buyers.
Identify Your Niche
Creating a niche for your business is essential to success. Often, business owners can identify a niche based on their own market knowledge, but it can also be helpful to conduct a market survey with potential customers to uncover untapped needs. During your research process, identify the following:
- Which areas your competitors are already well established
- Which areas are being ignored by your competitors
- Potential opportunities for your business
Check Your Understanding
Answer the question(s) below to see how well you understand the topics covered in this section. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.
Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.
https://assessments.lumenlearning.com/assessments/195
Contributors and Attributions
- Create Your Business Plan. Provided by : U.S. Small Business Association. Located at : https://www.sba.gov/writing-business-plan . License : Public Domain: No Known Copyright
- Ink Business Preferred® Credit Card
- The Business Platinum Card® from American Express
- The American Express Blue Business Cash™ Card
- Ink Business Unlimited® Credit Card
- The Blue Business® Plus Credit Card from American Express
- Capital One Spark Miles Select for Business†
- American Express® Business Gold Card
- Ink Business Cash® Credit Card
- U.S. Bank Business Triple Cash Rewards World Elite Mastercard®
- Capital One Spark 1% Classic†
- Why You Should Trust Us
Best Business Credit Cards of June 2024
Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate credit cards to write unbiased product reviews .
The information for the following product(s) has been collected independently by Business Insider: Capital One Spark Miles Select for Business†, U.S. Bank Business Triple Cash Rewards World Elite Mastercard®, Capital One Spark 1% Classic†, Chase Freedom Flex℠, Capital One Spark Miles for Business†. The details for these products have not been reviewed or provided by the issuer.
Introduction to Business Credit Cards
Business credit cards can completely transform your perspective on company expenses. Every dollar spent on business necessities can earn rewards toward a well-deserved vacation or extra cash in the bank. Better yet, the best business credit cards offer benefits that can add a layer of protection for valuable company assets.
Our expert recommendations evaluate the best business credit cards so you can find the option that best fits your spending style, rewards preferences, and financial goals.
Compare the Top Business Credit Cards
![state four benefits of a business plan to an entrepreneur Chase Ink Business Preferred® Credit Card](https://i.insider.com/6102e55aea74d40019b9af1a?width=400)
Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year. Earn 1 point per $1 on all other purchases.
21.24% - 26.24% Variable
Earn 100,000 bonus points
Good to Excellent
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. High sign-up bonus
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers 3x bonus points on several spending categories, including travel and advertising purchases
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Includes comprehensive travel coverage
- con icon Two crossed lines that form an 'X'. Welcome bonus has a very high minimum spending requirement
The Ink Business Preferred® Credit Card offers a huge welcome bonus and solid earning and benefits for a moderate annual fee. If your small-business expenses line up with the card's bonus categories and you like redeeming Chase Ultimate Rewards® points for travel, this is one of the best small-business credit cards to consider.
- Earn 100k bonus points after you spend $8,000 on purchases in the first 3 months from account opening. That's $1,000 cash back or $1,250 toward travel when redeemed through Chase Travel℠
- Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year. Earn 1 point per $1 on all other purchases
- Round-the-clock monitoring for unusual credit card purchases
- With Zero Liability you won't be held responsible for unauthorized charges made with your card or account information.
- Redeem points for cash back, gift cards, travel and more - your points don't expire as long as your account is open
- Points are worth 25% more when you redeem for travel through Chase Travel℠
- Purchase Protection covers your new purchases for 120 days against damage or theft up to $10,000 per claim and $50,000 per account.
- Member FDIC
![state four benefits of a business plan to an entrepreneur American Express The Business Platinum Card® from American Express](https://i.insider.com/60dde52b12b6f300180a3170?width=400)
Earn 5X Membership Rewards® points on flights and prepaid hotels on AmexTravel.com. Earn 1.5X points on each eligible purchase at shipping providers, US construction material, hardware suppliers, electronic goods retailers, and software & cloud system providers, as well as on purchases of $5,000 or more everywhere else (on up to $2 million per calendar year). Earn 1X points for each dollar you spend on other eligible purchases.
19.49% - 28.49% Variable
Earn 150,000 Membership Rewards® points
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. More travel benefits than you'll find on any other business credit card
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Generous airport lounge access options, from American Express Centurion Lounges to Priority Pass (enrollment required)
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Complimentary hotel elite status (enrollment required)
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Access to Amex concierge services
- con icon Two crossed lines that form an 'X'. Very high annual fee
- con icon Two crossed lines that form an 'X'. Limited opportunities to earn bonus points
- con icon Two crossed lines that form an 'X'. Annual statement credits won't be useful for everyone
The Business Platinum Card® from American Express is one of the best small-business cards with an elevated bonus and top-notch benefits (and a premium annual fee to match). It's an excellent offer if you like earning Membership Rewards points and you can maximize the bonus spending categories and perks — but be sure to assess whether the annual fee is worth it for you before you commit.
- Welcome Offer: Earn 150,000 Membership Rewards® points after you spend $20,000 in eligible purchases on the Card within the first 3 months of Card Membership.
- 5X Membership Rewards® points on flights and prepaid hotels on AmexTravel.com, and 1X points for each dollar you spend on eligible purchases.
- Earn 1.5X points (that’s an extra half point per dollar) on each eligible purchase at US construction material, hardware suppliers, electronic goods retailers, and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
- Unlock over $1,000 in statement credits on select purchases, including tech, recruiting and wireless in the first year of membership with the Business Platinum Card®. Enrollment required. See how you can unlock over $1,000 annually in credits on select purchases with the Business Platinum Card®, here.
- $200 Airline Fee Credit: Select one qualifying airline and then receive up to $200 in statement credits per calendar year when incidental fees are charged by the airline to the Card.
- $189 CLEAR® Plus Credit: Use your card and get up to $189 in statement credits per calendar year on your CLEAR® Plus Membership (subject to auto-renewal) when you use the Business Platinum Card®.
- The American Express Global Lounge Collection® can provide an escape at the airport. With complimentary access to more than 1,400 airport lounges across 140 countries and counting, you have more airport lounge options than any other credit card issuer on the market as of 03/2023.
- $695 Annual Fee.
- Terms Apply.
![state four benefits of a business plan to an entrepreneur American Express The American Express Blue Business Cash™ Card](https://i.insider.com/5e8248322d41c1494440da63?width=400)
Earn 2% cash back on everyday eligible business purchases (on up to $50,000 per year in purchases, then 1%). Earn 1% cash back on all other purchases.
0% intro APR on purchases for 12 months from account opening
18.49% - 26.49% Variable
Earn a $250 statement credit
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Good choice for earning 2% cash back on all your eligible purchases up to $50,000 a year
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Intro APR offer
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. No annual fee
- con icon Two crossed lines that form an 'X'. If your business spends more than $50,000 a year, you'll want to use a different card to earn bonus cash back once you meet that threshold
If you're spending money on your business anyway, you should be rewarded for those purchases by using one of the best small-business credit cards. With The American Express Blue Business Cash™ Card, you can earn unlimited cash back on your spending with no annual fee.
- Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months.
- 0.0% intro APR on purchases for 12 months from the date of account opening, then a variable rate, 18.49% - 26.49%, based on your creditworthiness and other factors as determined at the time of account opening. APRs will not exceed 29.99%
- Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Cash back earned is automatically credited to your statement.
- From workflow to inventory to floor plans, your business is constantly changing. That's why you've got the power to spend beyond your credit limit with Expanded Buying Power.
- Just remember, the amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record, financial resources known to us and other factors.
- No Annual Fee
- Terms Apply
![state four benefits of a business plan to an entrepreneur Chase Ink Business Unlimited® Credit Card](https://i.insider.com/6102e642ea74d40019b9af4b?width=400)
Earn unlimited 1.5% cash back on purchases.
0% intro APR on purchases for the first 12 months
18.49% - 24.49% Variable
Earn $750 bonus cash back
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Earns 1.5% cash back on every purchase, with no bonus categories to keep track of
- con icon Two crossed lines that form an 'X'. You can earn more cash back on some purchases with a card that has bonus categories
The Ink Business Unlimited® Credit Card is a great option for small business owners who prefer a straightforward earning rate and no annual fee. You'll earn 1.5% cash back on every purchase, and there's no limit to what you can earn.
- Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase made for your business
- Redeem rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®.
- Earn rewards faster with employee cards at no additional cost. Set individual spending limits for greater control.
- 0% introductory APR for 12 months on purchases
![state four benefits of a business plan to an entrepreneur American Express The Blue Business® Plus Credit Card from American Express](https://i.insider.com/60b8e87f02ac410018f94073?width=400)
Earn 2x Membership Rewards® Points on everyday eligible business purchases (on up to $50,000 per year in purchases, then 1X). Earn 1x Membership Rewards® Points on all other purchases.
0% intro APR on purchases for the first 12 months from account opening
Earn 15,000 Membership Rewards® points
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. The rare no-annual-fee card to earn Amex Membership Rewards points
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Solid earning rate on the first $50,000 in purchases each year
- con icon Two crossed lines that form an 'X'. For spending above $50,000 each year, you will only earn 1 point per dollar
If you're a small-business owner looking for a credit card that offers flexible rewards points without paying an annual fee, The Blue Business® Plus Credit Card from American Express is an excellent option. You don't need to own a full-time business to be eligible to apply, either — even freelancers and those with side gigs can qualify for a small-business card.
- Earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership.
- 0.0% intro APR on purchases for 12 months from the date of account opening, then a variable rate, 18.49% - 26.49%, based on your creditworthiness and other factors at account opening. APR will not exceed 29.99%
- Earn 2X Membership Rewards® points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter.
- You've got the power to use your Card beyond its credit limit* with Expanded Buying Power.
- *The amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record, financial resources known to us, and other factors.
![state four benefits of a business plan to an entrepreneur Capital One Capital One Spark Miles Select for Business†](https://i.insider.com/6196de7d6f457d0018cd4ca1?width=400)
Earn unlimited 5X miles on hotels and rental cars booked through Capital One Travel. Earn unlimited 1.5X miles on every purchase, with no restrictions or blackout dates.
17.99% - 23.99% variable APR
Earn 50,000 miles
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Generous welcome bonus offer
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Earn flexible rewards you can transfer to airline and hotel partners
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. No annual fee or foreign transaction fees
- con icon Two crossed lines that form an 'X'. Few travel benefits typical of other travel cards
- con icon Two crossed lines that form an 'X'. No intro APR offer
- con icon Two crossed lines that form an 'X'. Some small-business credit cards offer higher earning rates with no annual fee
Small-business owners who want to earn credit card rewards for free travel should consider the Capital One Spark Miles Select for Business. It's offering an excellent welcome bonus for a no-annual-fee business credit card, and you can transfer the miles it earns to over a dozen airline and hotel partners.
![state four benefits of a business plan to an entrepreneur American Express American Express® Business Gold Card](https://i.insider.com/6619564a3f923f7dab075134?width=400)
Earn 4x Membership Rewards® Points on the first $150,000 spent each calendar year in combined purchases from the top 2 business categories where your business spent the most each billing cycle (then 1x points per dollar). Earn 3x Membership Rewards® points on flights and prepaid hotels booked on amextravel.com. Earn 1x Membership Rewards® Points on all other purchases.
Earn 70,000 Membership Rewards® points
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. You can bonus points on the categories where you make the most purchases (from a list of options)
- con icon Two crossed lines that form an 'X'. High annual fee
The American Express® Business Gold Card is a good choice if your business spends a lot in certain categories and you want to earn Membership Rewards points for travel or other redemptions. It's got a high annual fee, but if you can use the card's benefits to your advantage, it can be well worth it.
- Welcome Offer: Earn 70,000 Membership Rewards® points after you spend $10,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership.*
- Earn 4X Membership Rewards® points on the 2 categories where your business spends the most each billing cycle from 6 eligible categories. While your top 2 categories may change, you will earn 4X points on the first $150,000 in combined purchases from these categories each calendar year (then 1X thereafter). Only the top 2 categories each billing cycle will count towards the $150,000 cap.
- Earn 3X Membership Rewards® points on flights and prepaid hotels booked on amextravel.com using your Business Gold Card.
- Earn up to $20 in statement credits monthly after you use the Business Gold Card for eligible U.S. purchases at FedEx, Grubhub, and Office Supply Stores. This can be an annual savings of up to $240. Enrollment required.
- Get up to a $12.95** statement credit back each month after you pay for a monthly Walmart+ membership (subject to auto-renewal) with your Business Gold Card. **Up to $12.95 plus applicable taxes on one membership fee.
- Your Card – Your Choice. Choose from Gold or Rose Gold.
- *Terms Apply
![state four benefits of a business plan to an entrepreneur Chase Ink Business Cash® Credit Card](https://i.insider.com/6102e6ddaedf2100190ef8a8?width=400)
Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Earn 1% cash back on all other purchases.
Earn up to $750 bonus cash back
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Broad 5% and 2% cash-back categories (you can earn bonus cash back at office supply stores and at gas stations and restaurants)
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Intro APR offer for purchases
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. You can pair this card with a card that earns Ultimate Rewards to redeem your cash back for travel
- con icon Two crossed lines that form an 'X'. Annual cap on bonus categories
Between offering a big welcome bonus, extra rewards in useful categories, and ongoing benefits like primary car rental insurance and purchase protection, the Ink Business Cash® Credit Card is an excellent no-annual-fee cash-back business credit card for small-business owners.
- Earn $350 when you spend $3,000 on purchases in the first three months and an additional $400 when you spend $6,000 on purchases in the first six months after account opening
- Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year
- Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Earn 1% cash back on all other purchases
- 10% Business Relationship Bonus If you have the Ink Business Cash card plus a Chase Business Checking account on your first card anniversary
![state four benefits of a business plan to an entrepreneur U.S. Bank U.S. Bank Business Triple Cash Rewards World Elite Mastercard®](https://i.insider.com/610c37a538aff700189015f5?width=400)
Earn 5% cash back on prepaid hotels and car rentals booked directly in the Rewards Center. Earn 3% cash back on eligible purchases at gas stations and EV charging stations, office supply stores, cell phone service providers and restaurants. 1% cash back on all other eligible net purchases.
0% intro APR on purchases and balance transfers for 15 billing cycles
19.24% - 28.24% Variable
$500 cash back
Excellent/Good
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong welcome bonus and bonus categories for a no-annual-fee card
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Introductory 0% APR on both purchases and balance transfers for 15 billing cycles
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. World Elite Mastercard benefits including cell phone protection
- con icon Two crossed lines that form an 'X'. Foreign transaction fees
- con icon Two crossed lines that form an 'X'. Relatively high minimum spending requirement to unlock bonus
- con icon Two crossed lines that form an 'X'. Authorized user purchases don’t count toward minimum spending requirement
The U.S. Bank Business Triple Cash Rewards World Elite Mastercard® is a no-annual-fee card for small business owners with a generous welcome bonus and great bonus categories. It's a good pick if you prefer earning straight cash back, especially if you can use the $100 annual software credit.
![state four benefits of a business plan to an entrepreneur Capital One®️ Capital One Spark 1% Classic†](https://i.insider.com/6526ebbc68f1d46f52aef714?width=400)
Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel. Earn unlimited 1% cash back on every purchase for your business with no limits or category restrictions.
30.49% Variable
- Check mark icon A check mark. It indicates a confirmation of your intended interaction. Travel and purchase protection
- con icon Two crossed lines that form an 'X'. Some other business cards offer better rewards
- con icon Two crossed lines that form an 'X'. No welcome bonus
Whether you have a new business or just don't have a ton of credit history, the Capital One Spark 1% Classic could be a good stepping stone. It's possible to get approved for the card with just fair credit, whereas most other business cards that earn rewards require a good or even excellent credit score.
These are the best business credit cards available this month, as chosen by Business Insider's personal finance experts.
- Ink Business Preferred® Credit Card: Best intro bonus offer
- The Business Platinum Card® from American Express Best for premium travel perks
- The American Express Blue Business Cash™ Card: Best flat-rate cash back with no annual fee
- Ink Business Unlimited® Credit Card: Best for maximizing cash back
- The Blue Business® Plus Credit Card from American Express: Best for travel rewards with no annual fee
- Capital One Spark Miles Select for Business† : Best for flat rate miles with no annual fee
- American Express® Business Gold Card: Best for big spenders
- Ink Business Cash® Credit Card: Best for office supplies and wireless
- U.S. Bank Business Triple Cash Rewards World Elite Mastercard® : Best rewards card with a generous intro 0% APR offer
- Capital One Spark 1% Classic† : Best for fair credit
Best Business Credit Card Reviews
The best business credit cards for small business owners offer generous rewards on common business expenses, travel and purchase protections and benefits, and other perks that make your busy life a little bit easier. Some of them come with annual fees, but many other great candidates do not, giving you plenty of options.
Each of the cards in this guide has been chosen for unique benefits that are valuable beyond standard requirements, such as generous reward rates or 0% introductory APR period. These are the best business credit cards of 2024, as chosen by Business Insider's team of credit card experts.
Best Intro Bonus Offer: Ink Business Preferred® Credit Card
The Ink Business Preferred® Credit Card is an ideal option if you're looking to earn valuable, flexible rewards points on your business spending through the Chase Ultimate Rewards® program. If you already have one of the popular Chase cards that earn these rewards — like the Chase Sapphire Preferred® Card or Chase Sapphire Reserve® — you'll earn even more by adding this card to your wallet.
This card consistently offers a generous welcome bonus, although the high spending requirement on this offer may be hard for smaller businesses to meet.
Like the Sapphire cards mentioned above, the Ink Business Preferred® Credit Card earns Chase Ultimate Rewards points. You can either keep the rewards you earn on your Ink card separate from the rest of your Ultimate Rewards stash, or you can transfer the points to your personal credit cards. These points can be traded for cash back or transferred to frequent flyer and hotel loyalty partners.
If you transfer your Ultimate Rewards points to a personal card to purchase travel through Chase, you can get a 25% bonus if you use your personal Chase Sapphire Preferred® Card, or a 50% bonus if you move your Ink points to your Ink Business Preferred® Credit Card.
What our experts love: Generous welcome offer, cellphone protection, and great rewards on travel, shipping, and advertising spend.
What our experts don't love: This card has an annual fee, which may deter business owners who don't want to pay money to hold a credit card.
Read our Chase Ink Business Preferred card review to learn more about this card.
Best for Premium Travel Perks: The Business Platinum Card® from American Express
The Business Platinum Card® from American Express is the business version of American Express' famed The Platinum Card® from American Express, and it used to be our pick for the top business card.
But since then, this card's annual fee has since increased, and it's become a bit more of a niche product. The Business Platinum Card® from American Express is potentially useful for mid-sized businesses that spend a lot on flights and travel, but less valuable for sole proprietors and very small operations.
The Business Platinum card added new benefits, including new 1.5x earning categories on eligible purchases at U.S. construction material & hardware suppliers, electronic goods retailers, software and cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year as well as annual statement credits for wireless, Indeed, Adobe purchases, and Dell**.
You'll get lots of perks with this card including generous statement credits, plus 5x Amex Membership Rewards points on airfare and prepaid hotels when you book through American Express Travel . However, the annual fee of The Business Platinum Card® from American Express is quite steep, and smaller companies may struggle to meet the spending requirement for the welcome bonus.
Read our Amex Business Platinum card review to learn more about this card.
Best for Flat Rate Cash Back with No Annual Fee: The American Express Blue Business Cash™ Card
The American Express Blue Business Cash™ Card is a good choice if you prefer straightforward cash-back earning without having to worry about keeping track of bonus categories. Business Insider considers it to be the best 2% cash back credit card for small business owners.
With this card, you earn 2% cash back on all eligible purchases, on the first $50,000 spent per calendar year, then 1% back (cash back is received in the form of Reward Dollars).
For small businesses with big expenses on the horizon, there's a 0% intro APR on purchases for 12 months from account opening (then a 18.49% - 26.49% Variable APR) that can help you save some money on interest, as well. New cardholders can also earn $250 statement credit after you make $3,000 in purchases on your card in your first three months of account opening.
Read our Amex Blue Business Cash card review to learn more about this card.
Best for Maximizing Cash Back: Ink Business Unlimited® Credit Card
The Ink Business Unlimited® Credit Card is a simple one at first glance, earning unlimited 1.5% cash back. However, just like the consumer Chase Freedom Flex℠ and Chase Freedom Unlimited® cards, the Ink Business Unlimited® Credit Card has a trick up its sleeve.
Although the card is marketed as "cash back," it earns Chase Ultimate Rewards points that you can redeem for cash (1 point = 1 cent). That means that you can combine the points earned from the Ink Business Unlimited® Credit Card with the ones you earn from cards like the Ink Business Preferred® Credit Card, or the personal Chase Sapphire Reserve® or Chase Sapphire Preferred® Card, and either earn a bonus when you redeem them for travel through Chase, or transfer them to travel partners. When those points are combined onto an Ink Business Preferred® Credit Card, you'll get a guaranteed 1.5–3 points per dollar spent.
The card also offers a 0% intro APR on purchases for the first 12 months on purchases, followed by a 18.49% - 24.49% Variable APR, so it's a good choice if you have expenses coming up that you want to spread out over time.
What the experts love: The welcome bonus offer is especially impressive for a no-annual-fee card.
What the experts don't love: This card isn't as valuable on its own — you need to hold another Chase card to maximize your rewards.
Read our Chase Ink Business Unlimited Credit Card review to learn more about this card.
Best for Travel Rewards with No Annual Fee: The Blue Business® Plus Credit Card from American Express
It's a rare points-earning business card that doesn't charge an annual fee. But with The Blue Business® Plus Credit Card from American Express, you'll earn 2 points per dollar on the first $50,000 you spend each calendar year, without any bonus categories you need to track.
According to Business Insider's points and miles valuations, Amex points are worth 1.8 cents apiece on average, so you're getting a 3.6% return on all your business spending up to $50,000 each year.
The card is currently offering 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the card within your first three months of card membership.
What the experts love: 2x points on up to $50,000 spent per year (then 1x), with no annual fee.
What the experts don't love: The welcome bonus is meager compared to many other cards.
Read our Amex Blue Business Plus credit card review to learn more about this card.
Best for Flat Rate Miles with No Annual Fee: Capital One Spark Miles Select for Business†
The Capital One Spark Miles Select for Business† recently increased its welcome bonus to 50,000 miles after spending $4,500 on purchases within the first three months from account opening. That's a rare deal from a no-annual-fee business card, and more than double the usual offer.
Cardholders earn 1.5 miles per dollar on purchases (except hotels and car rentals booked through Capital One Travel, which earn 5 miles per dollar). There are no pesky foreign transaction fees to worry about, and you'll get a few travel benefits, including roadside assistance and secondary car rental insurance.
The redemption options on this card are similar to that of its big sibling, the Capital One Spark Miles for Business† . Based on Business Insider's valuations, you can expect to get around $850 in travel from this card's bonus.
What the experts love: A strong welcome bonus and earning for no annual fee make the card an affordable entry point if you're interested in earning credit card rewards for travel.
What the experts don't love: Light on benefits compared to other travel credit cards, no intro APR offer.
Read our Capital One Spark Miles Select for Business review to learn more about this card.
Best for Big Spenders: American Express® Business Gold Card
If you don't want to pay the higher annual fee of The Business Platinum Card® from American Express, the American Express® Business Gold Card is a good alternative. And depending on your spending habits, the Business Gold could be a more rewarding choice, thanks to the ability to earn 4x points on popular business spending categories on the first $150,000 in combined purchases each calendar year in the two select categories where your business spent the most each month; then 1x.
Eligible 4x categories are:
- U.S. gas stations
- U.S. restaurants (including takeout and delivery)
- U.S. wireless telephone service provider
- U.S. purchases made from electronic goods retailers and software & cloud system providers
- U.S. purchases for advertising in select media (online, TV, radio)
- Transit purchases including trains, taxicabs, rideshare services, ferries, tolls, parking, buses, and subways
This card currently comes with a big welcome offer of American Express® Business Gold Card (worth $1,260 based on Business Insider's valuations). Cardholders also receive a decent selection of travel and shopping perks.
What the experts love: High level of customization when it comes to where you earn the most rewards
What the experts don't love: This card is the only premium Amex card that doesn't offer a statement credit to offset the annual fee.
Read our Amex Business Gold Card review to learn more about this card.
Best for Office Supplies and Wireless Expenses: Ink Business Cash® Credit Card
The Ink Business Cash® Credit Card is another solid Chase entry. Just like with the Ink Business Unlimited® Credit Card, you can pool the "cash" you earn with points from a points-earning card, effectively converting your cash into (potentially) more valuable points.
The Ink Business Cash® Credit Card is an especially good option if you can maximize its bonus categories, including office supply stores, internet, cable, and restaurants, among others. The card earns 5% cash back (5x points) at office supply stores and on internet, cable, and phone services, and 2% cash back (2x points) at gas stations and restaurants. You'll earn 5% and 2% in these categories on the first $25,000 in combined purchases each account anniversary year (then 1%), and 1% cash back (1 point per dollar) on all other purchases with no caps.
New cardholders can also take advantage of a 0% intro APR on purchases for the first 12 months (then a 18.49% - 24.49% Variable APR), making this card a good choice for big purchases you want to pay off over several months.
What the experts love: No annual fee, you can earn up to 5% cash back
What the experts don't love: Not the best option if you don't spend a lot within the 5% cash-back categories
Read our Chase Ink Business Cash credit card review to learn more about this card.
Best Rewards Card with Generous 0% Intro APR: U.S. Bank Business Triple Cash Rewards World Elite Mastercard
If you're looking for a rewards-earning business card with a generous 0% APR on both purchases and balance transfers, the U.S. Bank Business Triple Cash Rewards World Elite Mastercard® is an excellent choice, and the best U.S. Bank credit card for small-business owners. Cardholders receive a 0% intro APR on purchases and balance transfers for 15 billing cycles, followed by a 19.24% - 28.24% Variable APR, which is very uncommon on business cards.
The card's welcome offer and earnings aren't anything to sniff at, either. New cardholders can earn $500 cash back after spending $4,500 on purchases on the account holder's card in the first 150 days of opening your account (authorized user purchases won't count, however).
You'll also earn 5% cash back on prepaid hotels and car rentals booked through the U..S Bank Rewards Center, 3% cash back on eligible purchases at gas stations and EV charging stations, office supply stores, cell phone service providers, and restaurants, and 1% cash back on all other eligible purchases.
Another unique feature of the card is an annual $100 statement credit for recurring software subscription expenses like FreshBooks or QuickBooks. If you already subscribe to these services, the statement credit is a nice bonus — and it's particularly unusual for a no-annual-fee card.
What the experts love: Long intro APR on purchases and balance transfers, good bonus and earning rates, software subscription statement credit
What the experts don't love: Foreign transaction fees
Read our U.S. Bank Triple Cash Rewards card review to learn more about this card.
Best for Fair Credit: Capital One Spark 1% Classic†
Whether you have a new business or just don't have a ton of credit history, the Capital One Spark 1% Classic† could be a good stepping stone. It's possible to get approved for the card with just fair credit , whereas most other business cards that earn rewards require a good or even excellent credit score.
The card offers 1% cash back on all purchases, which isn't spectacular, but as a starter business card, it's not bad. There are no annual fees or foreign transaction fees, and employee cards are free to add (you'll earn rewards for their purchases, too).
You'll also receive a handful of good benefits, including secondary car rental insurance, purchase protection against damage or theft, extended warranty on eligible items, and travel and emergency assistance services.
What the experts love: You only need fair credit to be considered for approval, decent benefits for a starter card, no foreign transaction fees or annual fee
What the experts don't love: Card only earns 1% cash back across the board, no welcome bonus offer
Learn more about this card in our review of the Capital One Spark Classic for Business .
Business Credit Card Frequently Asked Questions
While personal credit cards are intended for any type of purchase, business credit cards are targeted toward business owners. That doesn't mean you need a large established company to apply for a business credit card. In fact, you can may qualify for a business card as long as you meet the bank's application requirements, even if you just resell household items on eBay or operate a small home baking business.
It's easier to qualify for a business credit card than you may think. If you do any freelancing or a side gig, such as driving for Uber or selling items on eBay, you can typically qualify for a business credit card as a sole proprietor. In this case, you are personally on the hook for your business' debts.
You can apply for a business card using your Social Security number if you're a sole proprietor. You should put down your legal name as the business name. If you have a business with employees, you'll need to answer questions about your business size, type, and revenue, in addition to providing your SSN and your EIN (if requested).
With a business credit card, the primary cardholder is responsible for the debts on the card and for any fees that are incurred. A corporate card is issued by a company to its employees, and the company is responsible for paying that card.
Why You Should Trust Us: How We Chose the Best Business Credit Cards
Business Insider evaluated dozens of business credit cards that are currently open to new applicants, including several no-annual-fee business cards . We narrowed the list down based on the following criteria:
- Sign-up bonus — Does the card offer a valuable welcome bonus offer to new cardholders who meet a minimum spending requirement?
- Ongoing rewards — Beyond the welcome bonus offer, does the card offer a competitive rate of points or cash back on purchases?
- Other features — Does the card come with any additional benefits, such as travel protection, free employee cards, cell phone insurance, or primary car rental insurance?
- Annual fee — If the card has an annual fee, does it offer enough benefits to justify it?
Read more about how we rate credit cards at Business Insider.
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***Terms, conditions, and exclusions apply. Refer to your Guide to Benefits for more details. Travel Accident Insurance is not guaranteed, it depends on the level of benefits you get at application.
For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply
For rates and fees of The Business Platinum Card® from American Express, please click here.
For rates and fees of The Blue Business® Plus Credit Card from American Express, please click here.
For rates and fees of the American Express Blue Business Cash™ Card, please click here.
For rates and fees of the American Express® Business Gold Card, please click here.
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COMMENTS
A business plan is essential as an entrepreneur. It helps you set clear goals and guidelines for how you will manage your business. A business plan may also be needed to set employee goals, obtain funding or even to sell your business one day. In this article, we discuss the importance of a business plan for entrepreneurs, as well as a few main ...
Let's take a closer look at how each of the important business planning benefits can catapult your business forward: 1. Validate Your Business Idea. The process of writing your business plan will force you to ask the difficult questions about the major components of your business, including: External: industry, target market of prospective ...
Business planning helps you keep track of the right things, and the most important things. Allocate your time, effort, and resources strategically. Manage change. With good planning process you regularly review assumptions, track progress, and catch new developments so you can adjust. Plan vs. actual analysis is a dashboard, and adjusting the ...
A business plan is of significant importance when it comes to guiding entrepreneurs in succession planning, which involves preparing for the future transition of leadership and ownership within a business. To effectively use a business plan for succession planning, assess current leadership and ownership, identify potential successors, define ...
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business. 1. To help you with critical decisions. The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and ...
In business, you do not want to wing it. You want a plan -- a document that lays out the path of your company for the next three to five years so you can see the route to your goals and know ...
Here are our top 15 reasons why you should write a business plan. 1. Reduce your risk. Writing a business plan takes some of the risk out of starting a business. It ensures that you're thinking through every facet of your business to determine if it can truly be viable.
Create a Brief Business Plan. Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business.
Mini plan: The reader may request a mini plan, or a condensed version of your business plan (1-10 pages), which includes most of the same components as in a longer traditional plan -- minus the ...
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...
MacMillan: The idea of the business plan is to convince the stakeholders. First, what we need to do in a business plan is show that we understand the needs — the unmet needs — of potential ...
There are so many reasons to create a business plan, and chances are that more than one of the following will apply to your business. 1. A plan helps you set specific objectives for managers. Good ...
10. Have all the information in your plan when you're ready to sell. Sell your business when it's time to put it on the market so you can help buyers understand what you have, what it's worth, and ...
While these are all very important steps to take, a business plan will be central to how you start, grow and develop your business. Here are 5 reasons why you need a business plan: 1. It will help you steer your business as you start and grow. Think of a business plan as a GPS to get your business going. A good business plan guides you through ...
For example, they might feel passionate about saving the oceans via social entrepreneurship or growing a software company that helps small businesses. Regardless of what they care about, they can start a business that integrates their values and beliefs. 3. Improved leadership skills.
Here are four benefits of a business plan: 1. You can get outside funding. To get funding from lenders or investors, you need to show a business plan. Lenders want to see that they are investing in a company that will last and grow. You must give lenders a plan detailing the steps you will take as a business owner.
Business objectives will be clear. Use your plan to define and manage specific measurable objectives like web visitors, sales, margins or new product launches. Define success in objective terms ...
5. Enhanced managerial abilities. Entrepreneurship will help you identify and develop your managerial skills. Necessity can be a great teacher, and your firsthand experience as a business owner can enhance your existing business knowledge and leadership abilities.
As an entrepreneur, having a business plan helps you define and focus on your business ideas and strategies. You not only concentrate on financial matters but also on management issues, human resource planning, technology, and creating value for your customer. 3. To help you identify any potential weaknesses.
A business plan is a detailed document that sets out a company's purpose, vision, marketing objectives, financial plans, resource needs and how it will achieve its goals. It essentially works as a roadmap or a guide to how the company will function and can be a valuable tool for attracting potential investors too.
A business plan forces you to think things through early; it ensures you have well-defined venture goals. Clear goals help generate a clear path for you and your team to follow as you begin to implement your venture. The executive summary is a 2- to 5-page section that summarizes the plan's main points.
5. Self-Awareness. A great entrepreneur is aware of their strengths and weaknesses. Rather than letting shortcomings hold them back, they build well-rounded teams that complement their abilities. In many cases, it's the entrepreneurial team, rather than an individual, that drives a business venture toward success.
The Benefits of Having a Business Plan: . 1. Increased Clarity. A business plan can bring clarity to the decision-making process regarding key aspects of the business such as capital investments, leases, resourcing, etc. You can't do everything. A good Business Plan will help you identify business critical priorities and milestones to focus on. 2.
The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may ...
The Mission Statement —This explains what your business is all about. It should be between several sentences and a paragraph. Company Information —Include a short statement that covers when your business was formed, the names of the founders and their roles, your number of employees, and your business location (s).
A business degree will undoubtedly help you excel in your professional journey. Here are six specific benefits of earning a bachelor's degree in business management. 1. Identifies New Career Opportunities. A business degree provides a broad understanding of various aspects of the business world, including finance, marketing, management, and ...
Evening News (June 08, 2024)
American Express® Business Gold Card: Best for big spenders. Ink Business Cash® Credit Card: Best for office supplies and wireless. U.S. Bank Business Triple Cash Rewards World Elite Mastercard ...