the benefits of a business plan

14 Reasons Why You Need a Business Plan

10 min. read

Updated April 19, 2024

There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.

A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.

A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.

Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?

Good questions. Here’s every reason why you need a business plan.

• 1. Business planning is proven to help you grow 30 percent faster

Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The  process  of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed. 

You don’t have to just take our word for it. Studies have  proven that companies that plan  and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience  cash flow crises  that threaten to close them down. 

• 2. Planning is a necessary part of the fundraising process

One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.

Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture. 

A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality. 

Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money. 

• 3. Having a business plan minimizes your risk

When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations. 

As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can  do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans. 

Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.

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• 4. Crafts a roadmap to achieve important milestones

A business plan is like a roadmap for your business. It helps you set, track and reach business milestones. 

For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.

In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.

And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.

• 5. A plan helps you figure out if your idea can become a business

To turn your idea into reality, you need to accurately assess the feasibility of your business idea.

You need to verify:

• If there is a market for your product or service
• Who your target audience is
• How you will gain an edge over the current competition
• If your business can run profitably

A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.

Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.

6. You’ll make big spending decisions with confidence

As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. 

These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.

7. You’re more likely to catch critical cash flow challenges early

The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your  cash flow statement  is one of the three key financial statements you’ll put together for your business plan. (The other two are your  balance sheet  and your  income statement  (P&L). 

Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills. 

• 8. Position your brand against the competition

Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:

• What is your competition doing well? What are they doing poorly?
• What can you do to set yourself apart?
• What can you learn from them?
• How can you make your business stand out?
• What key business areas can you outcompete?
• How can you identify your target market?

Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete. 

• 9. Determines financial needs and revenue models

A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind. 

Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business. 

Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.

• 10. Helps you think through your marketing strategy

A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers. 

Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc. 

Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.

• 11. Clarifies your vision and ensures everyone is on the same page

In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there. 

Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.

• 12. Future-proof your business

A business plan helps you to evaluate your current situation and make realistic projections for the future.

This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.

Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.

By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.

You’ll also be in a better position to seize opportunities as they arise.

Further Reading: 5 fundamental principles of business planning

• 13. Tracks your progress and measures success

An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.

By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.  

Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.

• 14. Your business plan is an asset if you ever want to sell

Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale. 

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• Writing your business plan

By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one. 

Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools and business plan templates out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.

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

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

Table of Contents

• 6. You’ll make big spending decisions with confidence
• 7. You’re more likely to catch critical cash flow challenges early

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What Is a Business Plan?

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

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

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

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

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

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

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

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

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

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

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Checklist for a Business Plan

Why is an effective business plan introduction important, what does "abridged" mean on a business plan.

• What Does a Business Plan Consist Of?
• Importance of Following a Business Plan

What is a business plan, and what’s the point of a business plan? To understand the benefits of a business plan, it is important to first understand why it's useful and how to create one.

In essence, a business plan describes a business in detail, including its goals and how it intends to achieve them. Business plans are typically written for new businesses, though they can be written for existing ones as well. The plan includes the operational, financial and marketing aspects of the venture.

The business plan is a fundamental tool and is necessary for a startup that needs a sense of direction. One of the reasons a business plan is so important is that it is one of the main requirements of venture capital firms and banks interested in investing funds in businesses. The business plan usually starts with an executive summary, followed by a description of the business in detail, including its products and services, and a section on how the business is going to achieve its goals from operational, financial and marketing standpoints. The business plan also typically includes a brief look at the industry within which the business will operate and how the business will differentiate itself from the competition.

What Are the Various Types of Business Plans?

There are many types of business plans. These include: feasibility plans, annual plans, internal plans, operations plans, growth plans and more. These different types of plans are drafted to match the different business situations. For example, if you’re preparing a business plan for internal reasons and not to seek funding from a financial institution, there is absolutely no need to include background information in your business plan. When you’re preparing a business plan for external investors, you should describe the management team; if you’re preparing the business plan for a bank, you should include the financial history and background of the company. With different circumstances, different pieces of information are included in the business plan.

Business Plans for Start-Ups

The business plan you prepare for a startup is about as standard as it gets when it comes to explaining all the steps that need to be taken by a new business to achieve its goals. These plans typically include information on the financial analysis of the business, the milestones for implementation, the management team, the strategy of the business, various forecasts, the marketplace and the product or service offering of the organization.

Notable among the plan's forecasts are predictions for the sales, profit, loss, cash flow and balance sheet of the company. There will also likely be additional tables included in the section on financial analysis, as well as the monthly projections for the first year. The plan for a startup usually begins with an abstract and contains an appendix at the end.

Internal Business Plans

Any business plan you do not prepare with the intent to show a financial institution, an external investor or any other third party is known as an internal business plan. In such plans, you don’t really need to describe in detail the organization or the management team. You may also choose whether or not to include financial projections like forecasts and budget. Usually, in internal business plans, the whole plan is written as a report using paragraph form. The main points will either be depicted as bullet points or as slides, in the case of a PowerPoint presentation.

Operational Business Plans

Operational business plans are typically prepared for use by the business itself, so they are strictly a type of internal business plan. They are also known as annual plans and include detailed information on deadlines, implementation milestones, specific dates, and the responsibilities of teams and their managers.

The operational business plan doesn’t go into much detail about who needs to do what and when. It looks at the responsibilities and dates from the perspective of what is a top priority and what is high level. It typically arranges data in the form of bullet points on slides in a presentation. There's no need for descriptions of the management teams or the organization. You also won’t find detailed explanations of all financial projections in these business plans. They are typically not regarded at all when the business plan is being used to formulate strategies going forward.

Growth Business Plans

Some business plans do not concern themselves with the entirety of the business. They are only interested in a part of the business or a specific area of interest. These are called growth plans, new product plans or expansion plans, depending on what they are looking to achieve. They may or may not be internal plans, depending whether they are meant to attract outside investment or meet the loan requirements of a bank. For example, you could prepare a startup plan to attract new investment when the business is just starting out. When you need to attract new funding or some kind of debt finance, you would prepare an expansion plan. Both plans should include a detailed description of the organization as well as extensive background data on each member of the management team. If, however, the expansion plan is for the business’s own internal consumption, it will be categorized as an internal business plan and won’t contain details about the organizations or the management team. Internal expansion and growth plans are used to strategize on the steps the business needs to take to expand and grow. Such internal plans also involve internal funding provided by the business itself. There may or may not be detailed financial projections. However, the projections of the sales and costs of any expansion plans are typically laid out in detail.

The bigger picture: This is one of the key advantages of a business plan. When you plan your business right, you can get a clearer picture of the business as a whole. You can easily comnect the dots between strategy and tactics, and everything is easier to work out.

Strategic focus: As a startup, you need to create an identity and focus on building that identity. It is usually defined by your target market, and the products and services you are tailoring to match their needs.

Set priorities: It’s impossible to do everything at once in a business. When you plan your business, you can order things in terms of their importance and allocate your effort, resources and time in an efficient and strategic manner.

Manage change: When you plan your business effectively, you can check your assumptions, track your progress and see new developments right from the beginning, allowing you to adjust accordingly.

Forces you to be accountable: When you plan effectively, you set expectations for yourself and a means by which you will be able to track your results. You can constantly review your business plan in terms of what you expect and what eventually happens.

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Nicky is a business writer with nearly two decades of hands-on and publishing experience. She's been published in several business publications, including The Employment Times, Web Hosting Sun and WOW! Women on Writing. She also studied business in college.

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Do you REALLY need a business plan?

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

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

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

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

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

1. Validate Your Business Idea

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

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

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

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

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

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

2. Set and Track Goals

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

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

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

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

3. Take Action

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

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

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

4. Manage Resources

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

Large Spending Decisions

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

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

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

5. Make Decisions

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

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

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

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

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

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

6. Manage Risk

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

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

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

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

7. Communicate Internally

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

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

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

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

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

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

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

8. Communicate Externally

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

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

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

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

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

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

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

9. Secure Funding

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

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

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

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

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

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

10. Grow and Change

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

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

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

Raising additional capital for expansion

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

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

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

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

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

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

Related Questions

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

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

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

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

Business Plan Importance: Why is business plan important?

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

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What Is a Business Plan? Definition and Planning Essentials Explained

Posted february 21, 2022 by kody wirth.

What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. 

A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner. 

Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed. 

What is a business plan?

A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.  

Why do you need a business plan?

The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis. 

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.

That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .  

What can you do with your plan?

So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.

Test an idea

Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful. 

The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.

Document your strategy and goals

For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen. 

With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used. 

Better manage your business

A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.

Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.

What should your business plan include?

The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see. 

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.

This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.

Check out our full guide for how to conduct a market analysis in just four easy steps .  

Marketing & sales

Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it. 

Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.

Check out our full write-up to learn how to create a cohesive marketing strategy for your business. 

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think. 

Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate. 

Here are the statements you should include in your financial plan:

• Sales and revenue projections
• Profit and loss statement
• Cash flow statement
• Balance sheet

The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.

Types of business plans explained

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. So, to get the most out of your plan, it’s best to find a format that suits your needs. Here are a few common business plan types worth considering. 

Traditional business plan

The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you’ll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual. 

This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information. 

Business model canvas

The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea. 

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Now, the option that we here at LivePlan recommend is the Lean Plan . This is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance.

It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . However, it’s even easier to convert into a full plan thanks to how heavily it’s tied to your financials. The overall goal of Lean Planning isn’t to just produce documents that you use once and shelve. Instead, the Lean Planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.

It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

Try the LivePlan Method for Lean Business Planning

Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process. 

To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan. 

It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. 

Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .

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Why you need a written business plan.

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CFP®, CEPA®, CVGA®, at Heritage Investors, LLC, is a financial educator, wealth manager, author, and speaker. More at  FinanciallySimple.com.

Imagine setting out on a road trip without knowing where you wanted to go. There are immediate and inherent problems with this idea. First, without knowing where you’re going, you can’t possibly chart a course to arrive there. Likewise, without defining a clear destination, you would have no idea of how long your trip will be, how much fuel is required, or even what your necessary budget for food and lodging should be. With so many problems being raised by failing to clearly define your destination, why would you ever take such a trip? You wouldn’t. Yet, an alarming number of small-business owners are doing just that.

Many entrepreneurs are operating businesses with no formal business plan in place. Although you may know how to “run” a business, a fully developed and well-written business plan is an absolute necessity. But why? I mean, couldn’t the time spent developing a business plan be used to grow your business? Technically, yes. However, there are many reasons why taking the time to flesh out one of your organization’s most salient documents is helpful.

At some point, you’re probably going to need funding for your business. Whether this comes in the form of investors or securing a business loan from your bank, you likely won’t see a penny without showing a well-thought-out business plan. Bankers and investors alike need answers to questions surrounding profitability and revenue generation. But even before requesting funds from lenders and investors, a carefully crafted business plan will inform you of just how much capital you’ll need to raise for long-term viability.

Additionally, your business plan can assist with making sound business decisions. Ideally, you will have thought of every aspect of your business — including growth and upgrade scenarios — when writing out your business plan. If you did, your business plan can provide a step-by-step approach to all your major business decisions. However, even if you didn’t think of everything, you still have a basic guide to help you determine if and when you should expand to a new location or upgrade processes, systems and software, and whether it makes more sense to buy or lease. This also applies to handling management issues, human resources and creating value for your clients.

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Next, working through the process of drafting a fully developed business plan forces you to take an objective look at your business. As business owners, we’re often too emotionally invested in our businesses to truly see them as they are. Your business is your baby, and your baby is often ugly. As you write your business plan, you’ll begin to notice all of the weaknesses that exist in your company. I even encourage my clients to let others look at their business plans just so they can poke holes in them. The more clearly you see your business, the better equipped you are to improve it.

Finally, a written business plan is an excellent communication device. With this one document, you can effectively communicate exactly what your business is and how it functions to anyone. As I mentioned earlier, your plan tells financiers how much capital you need and how it can be repaid. But your business plan can also help you acquire new talent, gain inroads with vendors and suppliers, and even attract potential clients. 

Whether you’re just starting your business or if you’ve been operating for years, a business plan is your road map. A written business plan takes your vision and creates a clear path for making it a reality. If you’re thinking, “Well, I’ve made it this long without it,” you may be surprised to learn that a meta-analysis of studies on the growth of more than 11,000 companies found that planning actually improved company performance. In fact, it benefited businesses that were already on their feet even more so than it did startups.

One likely reason for this finding is that established companies have the benefit of knowing exactly who their customers are and what they need or want. On the other hand, startups are often making educated guesses. This is also the reason that business owners need to review and update their business plans from time to time.

If you don’t have a written business plan, now is the time to remedy that. Consider who will read your business plan and how you want them to respond, and write your plan accordingly. Let trusted friends and family review your plan throughout the process, looking for areas that can be improved upon. Once you’re able to effectively answer all questions about your business, then your business plan should be ready.

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The importance of a business plan

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. ‍

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

• A market analysis : gathering information about factors and conditions that affect your industry
• Competitive analysis : evaluating the strengths and weaknesses of your competitors
• Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
• Marketing: using your research to advertise your business
• Logistics and operations plans : planning and executing the most efficient production process
• Cash flow projection : being prepared for how much money is going into and out of your business
• An overall path to long-term growth

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

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 crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

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2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.

3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights , some of the most common reasons businesses fail include:

• No market need : No one wants what you’re selling.
• Lack of capital : Cash flow issues or businesses simply run out of money.
• Inadequate team : This underscores the importance of hiring the right people to help you run your business.
• Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
• Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

Get a jumpstart on your business plan by creating your own cash flow projection .

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.

A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

Want to prove there’s a market gap? Here’s how you can get started with market research.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.

6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.

7. To provide a guide for service providers

Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

Learn what you need to get a small business loan.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.

10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.

Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

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Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.

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10 Business Plan Benefits You Might Be Forgetting If you think creating a business plan is not for you, think again. Here are ten ways your business plan can help you be a better entrepreneur.

By Tim Berry • Sep 6, 2013

Opinions expressed by Entrepreneur contributors are their own.

Too many people don't bother to write a business plan because they think it's too hard or unnecessary unless you're looking for funding . That's a shame. These myths keep a lot of people from the benefits of planning.

If you're still skeptical, here are 10 benefits to business planning you shouldn't be overlooking:

• You'll stay on strategy. It's hard to stick to strategy through the daily routine and interruptions. Use a business plan to summarize the main points of your strategy and as a reminder of what it both includes and rules out.
• 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.
• Your educated guesses will be better. Use your plan to refine your educated guesses about things like potential market, sales, costs of sales, sales drivers, lead processing and business processes.
• Priorities will make more sense. Aside from the strategy, there are also priorities for other factors of your business like growth, management and financial health. Use your plan to set a foundation for these, then to revise as the business evolves.
• You'll understand interdependencies. Use a plan to keep track of what needs to happen and in what order. For example, if you have to time a product release to match a testing schedule or marketing to match a release, your business plan can be invaluable in keeping you organized and on track.
• Milestones will keep you on track. Use a business plan to keep track of dates and deadlines in one place. This is valuable even for the one-person business and vital for teams.
• You'll be better at delegating. The business plan is an ideal place to clarify who is responsible for what. Every important task should have one person in charge. Your plan keeps track.
• Managing team members and tracking results will be easy. So many people acknowledge the need for regular team member reviews and just as many admit they hate the reviews. The plan is a great format for getting things in writing and following up on the difference between expectations and results with course corrections.
• You can better plan and manage cash flow. No business can afford to mismanage cash. And simple profits are rarely the same as cash. A cash flow plan is a great way to tie together educated guesses on sales, costs, expenses, assets you need to buy and debts you have to pay.
• Course corrections will keep your business from flopping. Having a business plan gives you a way to be proactive -- not reactive -- about business. Don't wait for things to happen. Plan them. Follow up by tracking the results and making course corrections. It's a myth that a business plan is supposed to predict the future. Instead, it sets expectations and establishes assumptions so you can manage the future with course corrections.

You don't need a big formal business plan to reap these benefits. Instead, think of your business plan as a collection of lists, bullet points and tables. Think of it as something that lives on the computer, not on paper. It's just big enough to do its job.

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20 Reasons Why You Need a Business Plan in 2024

Written by Dave Lavinsky

What is the Purpose of a Business Plan?

The purpose of a business plan is to provide a clear roadmap for the company’s future. It outlines the vision, goals, and strategies of the business, guiding entrepreneurs and stakeholders in understanding its operations and objectives. A business plan template helps attract investors and funding by showcasing the potential for profitability and growth.

Top 20 Reasons Why you Need a Business Plan

1. to prove that you’re serious about your business.

A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.

2. To Establish Business Milestones

The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.

3. To Better Understand Your Competition

Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.

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4. To Better Understand Your Customer

Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to an effective business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.

5. To Enunciate Previously Unstated Assumptions

The process of actually writing the business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.

6. To Assess the Feasibility of Your Venture

How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of success.

7. To Document Your Revenue Model

How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.

8. To Determine Your Financial Needs

Does your business need to raise capital? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.

9. To Attract Investors

A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.

10. To Reduce the Risk of Pursuing the Wrong Opportunity

The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.

11. To Force You to Research and Really Know Your Market

What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.

12. To Attract Employees and a Management Team

To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.

13. To Plot Your Course and Focus Your Efforts

The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.

14. To attract partners

Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.

15. To Position Your Brand

Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.

16. To Judge the Success of Your Business

A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To Reposition Your Business to Deal with Changing Conditions

For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.

18. To Document Your Marketing Plan

How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.

19. To Understand and Forecast Your Company’s Staffing Needs

After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it takes time to recruit and train great employees.

20. To Uncover New Opportunities

Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.

Business Plan FAQs

What is a business plan.

A business plan is a document that details your business concept and strategy for growth.

A business plan helps guide your company's efforts and, if applicable, gives investors and lenders the information they need to decide whether or not to fund your company. A business plan template helps you to most easily complete your plan.

Why Do You Need a Business Plan?

A business plan provides details about your company, competition, customers and industry so that you make the best possible decisions to grow your company.

What is the Importance of a Business Plan?

The 3 most important purposes of a business plan are 1) to create an effective strategy for growth, 2) to determine your future financial needs, and 3) to attract investors (including angel investors and VC funding ) and lenders.

Why is a Business Plan Important to an Entrepreneur?

Business plans help entrepreneurs take their visions and turn them into tangible action plans for success.

Need help with your business plan? 

• Speak with a professional business plan consultant from our team.
• Use our simple business plan template .
• Check out our business plan examples .
• Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
• Learn more about us via our Growthink Business Plan Review page

The World’s #1 Business Plan Template

Would you like to know the quickest and easiest way to create a winning business plan?

And how to use it to raise funding, improve your strategy, or both?

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The importance of business plan: 5 key reasons.

A key part of any business is its business plan. They can help define the goals of your business and help it reach success. A good business plan can also help you develop an adequate marketing strategy. There are a number of reasons all business owners need business plans, keep reading to learn more!

Here’s What We’ll Cover:

What Is a Business Plan?

5 reasons you need a well-written business plan, how do i make a business plan, key takeaways.

A business plan contains detailed information that can help determine its success. Some of this information can include the following:

• Market analysis
• Cash flow projection
• Competitive analysis
• Financial statements and financial projections
• An operating plan

A solid business plan is a good way to attract potential investors. It can also help you display to business partners that you have a successful business growing. In a competitive landscape, a formal business plan is your key to success.

Check out all of the biggest reasons you need a good business plan below.

1. To Secure Funding

Whether you’re seeking funding from a venture capitalist or a bank, you’ll need a business plan. Business plans are the foundation of a business. They tell the parties that you’re seeking funding from whether or not you’re worth investing in. If you need any sort of outside financing, you’ll need a good business plan to secure it.

2. Set and Communicate Goals

A business plan gives you a tangible way of reviewing your business goals. Business plans revolve around the present and the future. When you establish your goals and put them in writing, you’re more likely to reach them. A strong business plan includes these goals, and allows you to communicate them to investors and employees alike.

3. Prove Viability in the Market

While many businesses are born from passion, not many will last without an effective business plan. While a business concept may seem sound, things may change once the specifics are written down. Often, people who attempt to start a business without a plan will fail. This is because they don’t take into account all of the planning and funds needed to get a business off of the ground.

Market research is a large part of the business planning process. It lets you review your potential customers, as well as the competition, in your field. By understanding both you can set price points for products or services. Sometimes, it may not make sense to start a business based on the existing competition. Other times, market research can guide you to effective marketing strategies that others lack. To have a successful business, it has to be viable. A business plan will help you determine that.

4. They Help Owners Avoid Failure

Far too often, small businesses fail. Many times, this is due to the lack of a strong business plan. There are many reasons that small businesses fail, most of which can be avoided by developing a business plan. Some of them are listed below, which can be avoided by having a business plan:

• The market doesn’t need the business’s product or service
• The business didn’t take into account the amount of capital needed
• The market is oversaturated
• The prices set by the business are too high, pushing potential customers away

Any good business plan includes information to help business owners avoid these issues.

5. Business Plans Reduce Risk

Related to the last reason, business plans help reduce risk. A well-thought-out business plan helps reduce risky decisions. They help business owners make informed decisions based on the research they conduct. Any business owner can tell you that the most important part of their job is making critical decisions. A business plan that factors in all possible situations helps make those decisions.

Luckily, there are plenty of tools available to help you create a business plan. A simple search can lead you to helpful tools, like a business plan template . These are helpful, as they let you fill in the information as you go. Many of them provide basic instructions on how to create the business plan, as well.

If you plan on starting a business, you’ll need a business plan. They’re good for a vast number of things. Business plans help owners make informed decisions, as well as set goals and secure funding. Don’t put off putting together your business plan!

If you’re in the planning stages of your business, be sure to check out our resource hub . We have plenty of valuable resources and articles for you when you’re just getting started. Check it out today!

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25 Benefits of Having a Business Plan in 2024

What is a business plan, what are the benefits of a business plan, 1) executive summary, 2) company description, 3) market analysis, 4) financial analysis, how to write your own business plan for free, hire a professional for writing a business plan.

The first step to creating a successful business is to have a well-written business plan. The benefits of a business plan are numerous.

A well-written plan can help you start your new business on the right foot with investors, partners, and potential employees. It will also serve as an essential tool for managing the day-to-day operations of the company.

A good business plan will outline clear expectations for all stakeholders involved in helping you become more successful.

In this article, we will discuss what you should include in your business plan so that it is not only informative but also convincing and persuasive to investors, partners, and potential employees. We will also state the benefits of writing a business plan to help your startup succeed.

To start, let’s get a good idea of what a business plan entails.

A business plan is an overview of your company and its goals. It includes information about the industry, finances, and marketing plans.

A business plan is a formal document containing the both short-term and long-term goals of a business, it also gives vital information on how to achieve the goals.

The purpose of a business plan is to provide an overview for investors and lenders, so they can decide whether they want to risk their money on your company.

Moreover, before creating a business plan an entrepreneur must research what will make the business triumph.

There are many benefits to writing a business plan for your new startup. In summary, it will serve as an accurate roadmap for your company, and it will help you think through all aspects of your business: from marketing and finances to staffing and operations. Let’s check the list of business plan benefits below

• A business Plan shows investors how serious you’re about your business
• A business plan can assist you in making decisions.
• A business plan might help you come up with new ideas and innovations.
• A Business Plan Creates an Action Plan
• To have a better understanding of your competitors.
• To gain a deeper understanding of your customer.
• To reveal the truth about assumptions previously nurtured in your industry.
• To determine the sustainability of your business.
• To keep a record of your earnings.
• To determine your financial requirements.
• To attract potential investors.
• To reduce the risk of following the wrong opportunity.
• To make you do more study and have a better understanding of your market.
• To attract workers and a management team to join the company.
• To design a route and concentrate your efforts.
• To find new partnerships.
• To establish your brand.
• To assess your company’s progress and success
• To reposition your company in response to shifting market conditions.
• To make a written record of your marketing strategy.
• To be aware of and anticipate your company’s workforce requirements.
• To seek out new possibilities.
• To capitalize on your competitor’s weakness
• It helps you set long-term goals
• A business plan lets an entrepreneur see future challenges and suggest possible ways to mitigate them.

What are the 4 Components of a Business Plan?

You should invest time in writing out your ideas by starting with these four main sections as they remain the major components of a business plan, and they are: 1) executive summary 2) company description 3) market analysis 4) financial analysis.

Every business plan should have a clear and concise executive summary. It is a short overview of the company’s mission, its qualifications for operating, and the risks it can expect to encounter.

The executive summary should be less than 1-page long and should be concise enough that a reader can understand what your company does in just 10 minutes.

It is important that you provide as many details as possible in the Executive Summary to allow potential investors to have a clear idea of your company’s concept and direction.

The company description section of your business plan defines the firm’s goal and direction so that financiers and investors can get a good idea of who you are.

A market analysis is a comprehensive examination of a market within a specific industry. You will investigate the nature of your market, such as volume and value, potential customer groups, purchasing behaviour, competitiveness, and other crucial elements, using this analysis.

The financial analysis part of your business plan may be the most complex for you to accomplish on your own, but it also has the potential to make or break your funding application.

You will include all financial projections for the business . You might actually need the help of an accountant to get this done.

Financial projections help with market research by predicting demand, pricing strategy, and pricing policy options.

Financial projections also help with strategic planning by organizing all of your financial information into different areas depending on market research and forecasts.

I have written an article, where I’ll walk you through the process of writing your own business plan for free.

Here is it: How to Write a Winning Bankable Business Plan

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

Starting a business is always risky, but having an actionable and detailed business plan can help reduce the risk. It can also help you steer your business in the right direction. Moreover, the importance of a business plan can never be over-emphasized.

A good, actionable, and detailed business plan is essential for any entrepreneur or business owner to succeed. A well-thought-out plan is crucial to maintain the growth of your company in the long run.

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• Oct 24, 2020

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.

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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By outlining the top five advantages, from providing clarity and direction to attracting investors and mitigating risks, the article underscores the indispensable role of strategic planning in achieving business success.

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BENEFITS OF A BUSINESS PLAN: Benefits and Drawbacks

• by Folakemi Adegbaju
• August 15, 2023
• No comments
• 7 minute read

Table of Contents Hide

#1. you gain an understanding of your market, #2. evaluate risk, #3. you can get outside funding, #4. you can check the financial numbers, #5. you focus your strategies, #6. it will help you steer your business as you start and grow, #1. a great business plan requires great implementation practices, #2. a business plan can turn out to be inaccurate, #3. it creates an environment of false certainty, benefits of a business plan for an entrepreneur, final thoughts, what is the main purpose of a business plan, what needs to be in a business plan, who reads a business plan and what information are they looking for.

A good business plan can be said to be a road map to success, outlining all parts of your company, from marketing and finance to operations, products, services, and people, as well as how you will outperform your competitor. However, does the thought of writing your first business plan seem intimidating? Well, you’re not alone. Many entrepreneurs deal with this crucial phase of starting a business. This article will outline and explain the benefits and drawbacks of writing a business plan for you as an entrepreneur.

Are you ready? Enjoy the ride with us.

Benefits of a Business Plan

A business plan can assist you in determining the profitability of a  business before putting too much time or money into it if you are thinking of starting one. It also includes information on the procedures to take, the resources needed to achieve your business objectives, and a schedule for potential results. The style and content of a business plan can vary significantly. 

You’ll be reactive rather than proactive if you don’t have a business plan, and growth will be much more difficult. More importantly, the lack of a business plan would discourage potential investors and creditors, making it incredibly difficult to raise funds. Finally, if you don’t have a business plan, you won’t have anything to fall back on if things don’t go your way, so even a minor problem might quickly escalate.

If you’re starting a business, there are a couple of things that come first, including; registration of your business name, getting a tax ID, choosing a business structure, applying for the necessary permissions and licenses, and so on. For example, let’s say you need to start up a jewelry business. These and more are what you’d have to consider. However, just to take the stress off your plate, we already have a comprehensive jewelry business plan with a 3-year financial projection in place. All you’d need at this point is a business name.

So, what can a good business plan help you achieve?  Here are six benefits of writing a business plan:

Knowing how to conduct a market analysis is one of the benefits of writing a business plan. You examine your industry, target market, and rivals when conducting this research. You can spot patterns in decisions that may benefit or hurt your business.

One of the benefits of writing a business plan is the ability to learn from other people’s mistakes. Learning from the mistakes of others takes less time and money than learning from your own mistakes. The better prepared you are to cope with the many components of your market, the easier it will be to deal with problems later on.

A business plan can also assist you in evaluating the risks involved with your business. To avoid failure, you must first identify and manage risks. A business plan will require you to consider the risks you’re taking and decide whether they’re worth taking or if you should change your plan.

A business plan is required to obtain funds from lenders or investors. Lenders want to know they’re putting their money into a business that will stay and flourish. You must present a business plan to lenders that outlines the steps you will follow as a business owner. It’s a good idea to structure your ideas, even if your lenders are friends and relatives.

A business plan aids others in comprehending your passion and determining where their money will be spent. Clearly communicating your ideas to investors can help you demonstrate that you can get your business off the ground and grow it. You’ll also need to know how to construct a business plan’s exit strategy. A successful business is useless to your investors if they can’t get their money back at some point.

Financial estimates for your organization are included in business plans. While the forecasts aren’t a look into the future, they do reflect a prediction of your financial situation. It will be critical to plan for expenses in order to keep operations running smoothly. Cash flow estimates allow you to understand if your objectives are realistic. They also point out patterns that could be detrimental to your company. The quicker you recognize potential problems, the faster you can fix them.

Make sure your estimates are in line with your expectations. Have you set aside sufficient funds to complete the job at hand? Check your figures again to make sure you’re ready to handle your finances in the future.

The entrepreneur in you is itching to get started right away. A business plan, on the other hand, can assist you in determining the ideal methods for your business. Work on all the crucial aspects before venturing into ownership.

This benefit of a business plan also aids in work prioritization. You can determine which difficulties to handle first by examining the big vision of your business. A business plan might also assist you in deciding which activities to tackle later.

Consider a business plan to be a GPS to get your business up and running. Another one of the benefits of writing a good business plan is that it will walk you through each step of beginning and running a business. Your business plan will serve as a road map for how to establish, run, and grow your new business. It’s a technique to think about and outline all of the important aspects of how your business will operate.

Drawbacks of a Business Plan

A business plan has its own benefits and drawbacks, one of which is the stress involved in putting together all you need. So, as an entrepreneur, you’d always need to talk to a professional to make it easier for you to write a business plan.

And guess what? We have a team here at BusinessYield Consult to provide you with the necessary information you’d need starting out.

Meanwhile, here are other drawbacks you need to consider in writing a business plan:

Many businesses make a plan that sits on a bookshelf or on a storage device since it was created for one specific reason: to raise funds. A great business plan should become an inherent part of the organization once it has allocated particular responsibilities to specific job categories and laid the groundwork for data collection and metric production. Unfortunately, over the years, bad implementation has ruined many outstanding business plans.

Involving the “proper” people in the business planning process is critical. These are the people who will have an impact on the long-term plan of your business. Most business owners believe they can avoid these drawbacks by writing their own business plan, but this takes skill in a variety of sectors to be effective. For the greatest possible business plan, a diverse variety of perspectives and input is normally required, because otherwise, blind spots of inaccuracy can lead to plenty of unforeseen effects.

This basically means you’d need professionals like BusinessYield Consult for more optimal results.

It’s crucial to remember that a business plan is nothing more than a forecast based on current plans and data. We live in an ever-changing world where nothing is guaranteed. If a business plan has too much predictability, it may be unable to adjust to the changes that the world forces upon it. It might cause a business to miss out on an intriguing new opportunity because they are so focused on achieving one particular objective.

The benefits and drawbacks of a business plan illustrate that it is an important component of a good business but a thorough plan may not be required in all situations. The purpose of a business plan should be apparent to assess the current in order to make the best prediction of future results.  You’ll be able to boost your chances of success if you can plan for disruptions as well. For example, if you want to start a car detailing business and you feel there might be a disruption or crisis, in the long run, a good business plan can help you fix any issues. But either way, you may also need to speak with professionals to help you out.

Every entrepreneur needs a business to build and develop their business. A business plan comes with a lot of benefits for you as an entrepreneur.

Here are some of the benefits of a business plan for an entrepreneur:

• Provides guidance for opening new or expanding existing business /adaptability
• It acts as a management tool for the business/monitoring tool / identifies strengths
• It’s a tool for evaluating business performance
• It lays the strategy to be used in marketing the products
• Facilitates acquisition of loans from financial institutions and other financiers

The benefits of a business plan are more than the drawbacks and you can see why it is necessary for you to get a business plan as soon as possible. It is compulsory for you to know the benefits and drawbacks of a business plan so as to know how to fix things right in your business plan as an entrepreneur.

The main purpose of a Business Plan is to evaluate, characterize, and analyze a business opportunity or an existing business, as well as to assess its technological, economic, and financial viability.

An executive overview, products and services, marketing strategy and analysis, financial planning, and a budget should all be included in a good business plan.

It’s the lenders. A financial institution will want to examine a well-written business plan before approving a business loan. This assists the lender in determining whether the business objectives are reasonable and whether you’ve accurately forecasted various expenses and potential earnings.

Related Articles

• 4 MAIN PARTS OF A BUSINESS PLAN: 4 Necessary Business Plan Components
• Advantages of a Business Plan: Definition and What It Entails

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5 Benefits Of Using A Business Plan Templates to Launch Your Dream in 2024

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Unlock the Five Benefits of Using a Business Plan Template to Write Your Small Business Plan in 2024

Kristal Sepulveda, CPA

April 23, 2024

Did you know that the key to entrepreneurial success is using your business plan as a roadmap? According to a study by SCORE , a nonprofit resource partner for small businesses, 39% of entrepreneurs cite writing a business plan as their biggest hurdle.

But what if there is a template to streamline the process for a written business plan? Look no further! This article reveals a brand-new business plan template to simplify the process and empower your entrepreneurial vision.

What is a Business Plan, and Why is it Important?

Definition and purpose of a business plan.

A business plan serves as a blueprint for your business startup. This will detail how you'll launch and grow your business. It outlines your objectives, target market, financial projections, and marketing strategies. Without a well-thought-out plan, your business won’t have a clear direction, making it challenging to succeed.

Key Components of a Business Plan

• Executive Summary: A concise overview of your business concept and goals.
• Business Description: Details about your company, its mission, vision, and values.
• Market Analysis: Research on your target market, competitors, and industry trends.
• Marketing and Sales Strategy: How you'll promote and sell your product or service.
• Operational Plan: Your business's day-to-day operations, including logistics and management structure.
• Financial Plan : Projections for revenue, expenses, and funding requirements.
• Appendix: Additional documents supporting the rest of your plan, like resumes, permits, or legal documents.

Further Reading: Maximizing Your Small Business Tax Benefits: 2023 Tax Year Strategies & New Reporting Changes

Five benefits of utilizing business plan templates for your new business, 1. time-saving structure.

Utilizing a free business plan template offers new business owners a time-saving structure. With a simple business plan template, everything you need to create a thorough business plan quickly and efficiently is at your fingertips.

Instead of starting from scratch, you can download a free template and learn how to write a professional business plan easily. This streamlined process allows you to focus on other aspects of starting your business, such as developing a marketing plan or securing a business loan.

2. Accessibility and Affordability

Access to a free, simple business plan template ensures that everyone can start their business journey on the right foot, regardless of financial resources. You can easily download a free business plan template to get started.

Eliminate the need for expensive consultants or software. This accessibility empowers aspiring business owners to take the first step toward their entrepreneurial dreams without breaking the bank.

3. Clear Communication

A well-designed business plan template includes sections like an executive summary and sales plan, facilitating clear communication with stakeholders such as business partners or potential investors. Using a template, you can effectively convey your vision, product or service offerings, and marketing strategies concisely and structured.

This clear communication not only helps garner support from investors but also ensures alignment among team members, laying a solid foundation for a successful business venture.

4. Tailored Flexibility

While templates provide a structured framework, they also offer tailored flexibility to accommodate different types of businesses and industries. Are you launching a tech startup or opening a small cafe ? A free business plan template can be customized to suit your specific needs and goals.

You can adapt sections such as the marketing plan or financial statements to reflect your business model's unique requirements. This flexibility allows you to create a professional business plan that resonates with your target audience and sets you apart from competitors.

5. Enhanced Planning Accuracy

Following a predefined structure allows you to consider all aspects of your business, from market research to financial projections. This thorough approach helps identify potential pitfalls and opportunities, enabling you to make informed decisions and mitigate risks effectively.

How to Choose the Right Business Plan Template for Your Venture?

Considerations when selecting a good business plan format.

Consider your venture's unique requirements and objectives when choosing a business plan template. Evaluate whether you're starting a new business or looking to grow your existing one. Assess the products and services you offer and the market you operate in.

Consider whether the template aligns with the guidelines provided by the Small Business Administration (SBA) and offers flexibility to customize according to your needs. Your business plan is not just a document. It's a strategic tool that can help propel your business forward.

Features to Look for in a Business Plan Template

Ensure it covers all the necessary sections of a comprehensive business plan, including information about your business, market analysis, marketing and sales strategies, operational plan, and financial projections. Consider whether the template provides guidance and examples for each section.

Look for templates offering flexibility and customization options, allowing you to tailor the plan to your business model and goals. Also, choose a template that is easy to use and understand, facilitating the writing process and ensuring clarity and coherence in your plan.

Writing a Solid Business Plan Template for Your Specific Needs

Gather all the relevant information about your business to write a solid business plan template for your specific needs. Clearly define your products or services, target market, and unique selling propositions. Use the template as a guide to creating a comprehensive and well-structured plan.

Utilize the resources and guidance the template provides to effectively articulate each part of your business plan. Ensure it reflects your vision, goals, and strategies. As you operate your business, regularly review and update your plan to adapt to changing market conditions and opportunities.

Steps to Write an Effective Business Plan Using a Template

Setting clear objectives and goals.

Begin by defining clear objectives and goals for your business. Identify the purpose of your business plan and the outcomes you aim to achieve. Outline your aspirations and milestones, whether you're starting a new business or growing an existing one.

Utilize the goal-setting section of your business plan template to help articulate your vision. For small business owners, setting achievable objectives drives growth and ensures long-term viability.

Developing a Comprehensive Business Description

Craft a comprehensive business description outlining the business type you're operating or planning to start. Provide detailed information about your products or services, target market, and how your business solves a specific need or problem.

Here's a step-by-step guide to building a strong and informative business description:

1. Company Overview:

• Business Name and Location: Start with your company's official name and physical location (if applicable).
• Year Established: Briefly mention the year your business was founded.
• Mission Statement: A concise statement outlining your company's purpose and core values.

2. Products and Services:

• Provide a clear description of the products and services you offer.
• Categorize your offerings for better readability.
• Briefly mention your brand partnerships (if applicable).

3. Target Market:

• Define your ideal customer base.
• Consider the demographics, interests, and needs of different customer segments.

4. Competitive Advantage:

• What sets your business apart from competitors?
• Highlight unique selling propositions (USPs) such as exceptional customer service, specialized products, or innovative services.

5. Management Team:

• Briefly introduce key members of your management team.
• Include their titles, expertise, and relevant experience.

6. Financial Performance:

• You can highlight financial strengths like consistent growth or profitability for established businesses.
• Emphasize responsible financial management if relevant.

7. Future Goals:

• Briefly outline your company's aspirations and long-term vision.
• Mention potential expansion plans or future product development.

8. Call to Action:

• Depending on your audience, you can include a call to action (CTA) at the end.
• This could be a website visit, contacting you for inquiries, or following your social media pages.

Constructing a Solid Financial Plan

Develop a solid financial plan that includes detailed projections and forecasts for revenue, expenses, and profitability. Utilize the financial plan section of your business plan template to outline your financial goals and strategies. It doesn't matter if you're creating a traditional or lean startup business plan.

Here are steps involved:

1. Define Your Financial Goals:

• Short-Term (1-3 years): Examples include saving for a vacation, emergency fund, or down payment on a car.
• Mid-Term (3-10 years): Examples include saving for a house, education, or starting a business.
• Long-Term (10+ years): The primary focus here is retirement planning.

2. Track Your Income and Expenses:

• Gather all your income sources (salary, investments, etc.).
• Collect bank statements and receipts to track your spending for a set period (3-6 months).
• Categorize your expenses (housing, food, transportation, etc.).

3. Create a Budget:

• Use your income and expense data to create a realistic budget.
• Several budgeting methods exist (50/30/20 rule, zero-based budgeting). Choose one that suits your needs.
• Allocate funds for expenses, savings, and debt repayment within your budget.

4. Analyze Your Debt Situation:

• List all your debts (credit cards, student loans, mortgages) with their interest rates and minimum payments.
• Prioritize high-interest debts for faster repayment. Consider debt consolidation strategies if applicable.

5. Build an Emergency Fund:

• Aim to save 3-6 months of living expenses to cover unexpected costs.

6. Plan for Retirement:

• Research retirement savings options (401(k), IRAs) and contribution limits.
• Estimate your future retirement needs and adjust your savings plan accordingly.

7. Invest for Your Goals:

• Research investment options (stocks, bonds, mutual funds) based on your risk tolerance and time horizon.
• Consider seeking professional investment advice for complex financial situations.

8. Protect Your Assets:

• Look into insurance coverage (health, life, disability) to safeguard yourself and your loved ones from financial hardship.

9. Review and Revise Regularly:

• Your financial plan is not static. Revisit and adjust your goals, budget, and investment strategies as your life circumstances evolve.

Making Your Business Plan Stand Out

Highlight key differentiators and unique selling propositions to make your business plan stand out. Showcase the viability of your business idea and its potential for success in your chosen market. Use your business plan's marketing and sales section to outline strategies for promoting your products or services and reaching your target audience.

Are you operating as a limited liability company or building your business from the ground up? A standout business plan can attract investors, partners, and customers, setting the stage for a successful venture.

Review and Refinement

Review your business plan carefully to ensure accuracy, clarity, and coherence. Seek feedback from mentors, advisors, or industry experts to identify areas for improvement. Refine your business plan based on feedback and market research to enhance its effectiveness and relevance.

Are you writing a one-page business plan or a detailed business plan outline? Ongoing review and refinement are essential for staying aligned with your goals and adapting to changing market conditions.

Further Reading: How To Leverage Tax Season For Better Client Engagements

You'll need to create a business plan to launch your venture successfully. Business plans can help guide your efforts, ensuring you're well-prepared to bring your product or service to market. Utilizing a free business plan template includes essential sections like market research and financial projections, making the process more accessible.

With a business plan template download, you can write a business plan quickly and efficiently, leveraging its structured format to streamline your efforts. Business plans help crystallize your vision and strategy.

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Some workers are choosing housing and student loan benefits over a retirement plan, and it says a lot about America's cost-of-living crisis

• Workers and companies are trying non-traditional job benefits to combat the rising cost of living.
• Housing assistance, student loan repayments, and commuting support are increasingly popular.
• Unconventional benefits could also entice remote workers back to the office.

As Americans deal with the rising cost of living , more companies and workers are rethinking the types of job benefits that are most important.

Recent surveys have shown that some workers prefer non-traditional job benefits such as housing assistance and help with commuting costs over things like extra vacation time. Additionally, companies are getting creative with their benefits packages so that can help both the business and the employees, such as matched contributions to help pay off student loans in place of retirement benefits and adoption assistance, said John Newcome, vice president and senior consultant at the benefits administration firm Kelly Benefits.

"Employees want a holistic approach to benefits that address their overall well-being, including work-life balance, mental health support, and financial guidance," Newcome told Business Insider. "Standard benefits, like medical, dental, or vision care, are typically included in most employee benefits plans. However, many employees now seek more specific benefits."

The most direct form of housing assistance can be in the form of rental or down payment assistance, which Newcome said more companies are starting to implement, especially among public entities, such as major universities, public school districts, and even the US federal government. However, there are other more creative ways to help with home ownership, he added.

For example, a company can guarantee a loan to help secure a lower interest rate for an employee or even share ownership of a house with the worker, which they can buy out over time.

Walmart is one example of a company offering housing assistance to employees . When qualified workers buy a new home or refinance a house, Walmart will help with the process and pay part of the closing costs.

Related stories

Elon Musk's tunneling company, Boring, announced plans in 2023 to build a 110-home subdivision for employees near the Austin suburb of Bastrop. The homes are expected to be offered as lease to own, with prices below market rate and close to facilities for Boring and other Musk-led businesses, Tesla and SpaceX.

Non-traditional perks can be chosen to help with more immediate needs

Other non-traditional perks on the rise include some voluntary benefits that can lower or eliminate living expenses, said Newcome. These include family planning benefits, such as help with fertility procedures or adoption costs, along with supplements to basic health insurance, including mental health support and even pet insurance.

Student loan repayment assistance is another benefit growing in popularity, said Newcome. In some cases, workers can choose this benefit and pause other benefits such as retirement contributions.

"With workers of all ages repaying student debt, student loan assistance should be a key consideration in the enhancement of employee benefit programs," Newcome said.

One way companies are offering student loan assistance is similar to a 401(k), in which the company makes matching contributions to the student loan each month based on how much the employee pays.

In cases where employees can choose between student loan help and retirement contributions, it can help keep the company and the workers from having to take on additional benefits costs.

To be sure, there can be downsides to accepting these perks. Many Americans are facing a retirement crisis without enough saved up for their post-work lives. Postponing retirement savings in favor of more immediate needs could just be trading one problem in and creating a bigger one later.

In addition, some of these perks, such as supplements to health insurance, might be offered as optional with an added cost. If taken, the employee faces potentially lower after-tax, take-home pay.

Non-traditional benefits could also convince workers to rethink remote work

Rethinking employee benefits could also be the key to enticing remote workers back to the office .

In a survey of 1,020 employers and workers about office perks, performed by the bonding and insurance company JW Surety Bonds and published in January, 47% of respondents said they would be willing to return to the office if housing benefits were offered. Additionally, 69% said they would be willing to change their job or career for employer-based housing benefits.

Additionally, 43% said they would take less vacation time in exchange for help with housing costs, and 30% said they would prefer housing assistance over a pay raise.

Similarly, providing employees with commuting assistance could be key to luring more workers back to the office in a post-pandemic world, according to a survey of 1,038 US adults and remote employees performed in February by the cloud communications company Ringover .

When asked which perks would convince them to give up remote work, the top response was "paid commute," with 83.2% of respondents picking that as an important incentive.

As the landscape of employee benefits evolves to meet the changing needs of the workforce, companies are becoming more innovative.

Watch: Nearly 50,000 tech workers have been laid off — but there's a hack to avoid layoffs

• Main content

What are pension plans?

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Pension plans, once a staple of retirement planning , have become less common as more companies transition to defined contribution plans like 401(k)s. Despite this trend, traditional pension plans remain one of the best retirement plans out there.

Here’s everything you need to know about pension plans, from their structure and types to taxation and payout options.

Pension plans are a type of retirement plan where an employer commits to pay a set monthly amount to employees when they retire. The amount is usually based on the employee’s salary and years of service, among other factors. The employer is primarily responsible for contributing to the plan and managing the investments. Pension plans are designed to provide a steady income stream for workers during retirement.

Only 15 percent of private industry workers had access to a traditional pension plan, also called a defined benefit plan, in March 2022, according to the Bureau of Labor Statistics .

How a pension plan works

Pension plans operate on the principle of accruing benefits over an employee’s career. During their employment, the employer contributes to the plan on behalf of the employee. The money is then invested, and the returns are added to the plan’s funds. Voluntary employee contributions may be allowed as well.

During retirement, the employee begins to receive monthly payments, the amount of which is determined by a formula that takes into account factors like the employee’s final salary and years of service. Pension benefits are typically payable for the remainder of the employee’s life.

Two types of pension plans

Pension plans can be categorized into two main types: defined benefit plans and defined contribution plans. Here’s a closer look at both.

Defined benefit plan

A defined benefit plan provides a specific monthly benefit at retirement, which is calculated using a formula that typically factors in salary, years of service and age. The employer bears the investment risk and is responsible for ensuring sufficient funds exist to pay the promised benefits.

These plans are often referred to as traditional pension plans, and they’re generally seen as more advantageous for workers since they provide a predictable income in retirement. However, they’re less common today due to their high costs and complexity for employers.

Defined contribution plan

In a defined contribution plan, the employer, employee or both make regular contributions to the employee’s individual account within the plan. The final benefit amount depends on the total contributions and the performance of underlying investments. The most common type of defined contribution plan is the 401(k) .

While these plans give workers more control over their investments, they also transfer the investment risk from the employer to the employee.

Options for pension plan distribution

When it comes to receiving pension benefits, retirees typically have two main options: monthly annuity payments or a lump-sum distribution. The most suitable option depends on the retiree’s financial situation, life expectancy and personal preferences.

You can use a pension calculator to estimate your earnings and compare pension distribution options. You might also consider speaking with a financial advisor to determine which payout option works best for your retirement needs.

An annuity distribution provides a steady stream of income for life. Some plans may offer options for survivor benefits, which continue payments to a spouse or other beneficiary after the retiree’s death. While annuities offer the security of a regular income, they may not keep pace with inflation.

A lump-sum distribution pays out the entire value of a pension plan in one go. This can be an attractive option for those who want immediate access to their funds, have a shorter life expectancy or feel confident in managing their own investments. However, taking a lump sum can lead to higher taxes in the year of the distribution and poses the risk of running out of money if not properly managed.

Are pension plans taxable?

Pension plans are usually taxable. When retirees start receiving pension benefits, the payments are treated as ordinary income and are subject to federal income tax. Depending on where the retiree lives, the payments may also be subject to state income tax.

Advantages of pension plans

Pension plans offer several benefits, including:

• Guaranteed income: They provide a steady and predictable income in retirement, reducing the risk of outliving one’s savings.
• Employer-funded: Most of the funding for a pension plan comes from the employer, which can be a significant benefit for employees.
• Low maintenance: Since the employer is responsible for managing the plan’s investments, employees don’t have to worry about choosing and managing their own investments.
• Inflation protection: Some pension plans offer cost-of-living adjustments to help keep pace with inflation.

Risks associated with pension plans

While pension plans have their benefits, they also come with risks, particularly the financial health of the employer. If the company faces financial distress or goes bankrupt, it may not have the funds needed to meet its pension obligations.

Additionally, pension benefits are often based on the employee’s final years of salary and years of service. If an employee leaves the company before reaching retirement age, the pension benefit may be significantly reduced.

Finally, since pension plans are typically managed by the employer, workers have little to no control over the investments, so workers must trust that their employer or plan administrator is investing funds responsibly.

How pension plans compare to other retirement savings options

Traditional pension plans are becoming increasingly rare. Instead, defined contribution plans like 401(k)s are now the standard way most people save for retirement.

• 401(k) plan: This defined contribution plan allows employees to contribute a portion of their pre-tax salary to a retirement account. Employers often match a portion of the employee’s contributions.
• Traditional Individual Retirement Account (IRA) : An IRA is a tax-advantaged account that individuals can open on their own, regardless of their employment status. Contributions are made with pre-tax dollars and provide a tax deduction in the year they’re made. However, taxes come due when withdrawals are made during retirement.
• Roth IRA : Contributions are made with after-tax dollars, so they aren’t tax deductible. However, withdrawals in retirement are tax-free.

401(k) vs. pension plan

Both 401(k) plans and pension plans offer workers income in retirement. But unlike pensions, which put the onus of saving for retirement on the employer, 401(k) plans require direct buy-in from workers.

Here are other similarities and differences between a 401(k) and a pension:

• Investment control: 401(k) participants pick the investments inside their accounts, while in a pension plan, the employer controls the investment decisions.
• Benefit predictability: Pensions offer a guaranteed benefit at retirement, while the benefit from a 401(k) depends on contribution amounts by employees and investment performance.
• Risk: With a pension, the employer bears the investment risk, while with a 401(k), the employee assumes the risk.

Frequently asked questions (FAQs)

What is pension plan vesting, can a pension plan go bankrupt, when can you access your pension account, who gets a pension, bottom line.

Pension plans can provide a reliable income stream in retirement, but they’re increasingly rare for the average worker. If you’re fortunate enough to have a pension plan, it’s essential to understand how your plan works, the benefits it provides and any potential risks. Ultimately, a diversified approach to retirement planning that combines different types of accounts and investments will help ensure a more secure and comfortable retirement.

Related Articles

What is an after-tax 401(k) and who should make contributions to one?

What is retirement planning?

What is a 403(b) plan and how does it work?

401(k) vs. pension plan: What’s the difference?

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The US is now allowed to seize Russian state assets. How would that work?

Calling it “a good day for world peace,” President Joe Biden signed into law the $95 billion war aid measure that includes assistance for Ukraine, Israel, Taiwan and other allies, marking an end to the long, painful battle with Republicans in Congress.

President Joe Biden speaks before signing a $95 billion Ukraine aid package that also includes support for Israel, Taiwan, and other allies, in the State Dining Room of the White House, Wednesday, April 24, 2024, in Washington. (AP Photo/Evan Vucci)

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White House national security adviser Jake Sullivan speaks during a press briefing at the White House, Wednesday, April 24, 2024, in Washington. (AP Photo/Evan Vucci)

WASHINGTON (AP) — The big U.S. aid package for Ukraine and other allies that President Joe Biden signed Wednesday also allows the administration to seize Russian state assets located in the U.S. and use them for the benefit of Kyiv.

That could mean another $5 billion in assistance for Ukraine, coming from Russian Central Bank holdings that have already been frozen in the United States. The seizures would be carried out under provisions of the REPO Act, short for the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, that were incorporated into the aid bill.

But it’s not likely the U.S. will seize the assets without agreement from other members of the Group of Seven nations and the European Union.

WHAT IS THE DIFFERENCE BETWEEN FREEZING AND SEIZING?

The U.S. and its allies immediately froze $300 billion in Russian foreign holdings at the start of Moscow’s invasion of Ukraine. That money has been sitting untapped — most of it in European Union nations — as the war grinds on. But roughly $5 billion of it is located in the U.S.

The frozen assets are immobilized and can’t be accessed by Moscow — but they still belong to Russia. While governments can generally freeze property without difficulty, turning that property into forfeited assets that can be sold for the benefit of Ukraine requires an extra layer of judicial procedure, including a legal basis and adjudication in a court.

For more than a year, officials from multiple countries have debated the legality of confiscating the money and sending it to Ukraine.

HOW QUICKLY COULD THIS HAPPEN?

The new U.S. law requires the president and Treasury Department to start locating Russian assets in the U.S. within 90 days and to report back to Congress within 180 days. A month after that period, the president will be allowed to “seize, confiscate, transfer, or vest” any Russian state sovereign assets, including any interest, within U.S. jurisdictions.

But the U.S. wants to keep consulting with global allies and act together, which is likely to slow down the process.

National security adviser Jake Sullivan said Wednesday the issue would be an important topic when leaders of the G7 countries meet in Italy in June, adding that “the ideal is that we all move together.”

WHAT CAN THE US DO WITH THE MONEY?

Biden is given leeway to determine how the money can be spent for the benefit of Ukraine — but he must confer with other G7 members before acting.

The legislation states that “any effort by the United States to confiscate and repurpose Russian sovereign assets” should be done alongside international allies, including the G7, the 27-member European Union and other nations as part of a coordinated effort.

Policymakers, including Treasury Secretary Janet Yellen, have said the U.S. is not likely to act without the support of G7 allies.

Yellen said after the passage of the bill that “Congress took an important step in that effort with the passage of the REPO Act, and I will continue intensive discussions with our G7 partners in the weeks ahead on a collective path forward,” Yellen said.

WILL EUROPE ALSO SEIZE RUSSIAN ASSETS?

The European Union already has begun to set aside windfall profits generated from frozen Russian central bank assets. The bloc estimates the interest on that money could provide around 3 billion euros ($3.3 billion) each year.

“The Russians will not be very happy. The amount of money, 3 billion per year, is not extraordinary, but it is not negligible,” EU foreign policy chief Josep Borrell told reporters in March .

Still, some European leaders have expressed hesitation about moving forward with a plan to formally seize Russia’s assets in Europe.

European Central Bank President Christine Lagarde said at a Council on Foreign Relations event earlier this month that confiscating Russian assets “is something that needs to be looked at very carefully” and could “start breaking the international legal order.”

WHAT ARE THE RISKS?

Critics of the REPO Act say the weaponization of global finance against Russia could harm the U.S. dollar’s standing as the world’s dominant currency.

To confiscate Russia’s assets could prompt nations like China — the biggest holder of U.S. Treasuries — to determine it is not safe to keep their reserves in U.S. dollars.

The conservative Heritage Foundation has criticized Russian asset seizure for, among other things, undermining the dollar-denominated global finance system, saying “it would expose an already fragile economy to unintended consequences and risks for which the United States is unprepared.”

Russian authorities have warned that the new law will undermine the global financial system.

Appvion Stock Plan Revives Some Claims of Flawed Transfer (1)

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The employee stock ownership plan of bankrupt paper company Appvion Inc. on Tuesday had part of its case revived against former corporate directors and financial advisers it says mishandled a decades-old transaction that swapped workers’ 401(k) assets for stock in the company.

The plan has viable claims based on the alleged post-2012 conduct of multiple defendants, including State Street Bank & Trust Co., Reliance Trust Co., and various Appvion corporate directors and officers, the US Court of Appeals for the Seventh Circuit held. The plan’s allegations—that the directors and officers acted carelessly because they had an incentive to artifically inflate ...

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