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

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

In an era where more than 50% of small enterprises fail in their first year, having a clear, defined, and well thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we’ll explain what a business plan is, list the reasons why you’d need one, and identify different types of business plans.

What is a Business Plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them.

Business plans outline a company’s go-to-market strategy, financial projections, market research, business purpose, and mission. The business plan is also a prominent tool used to secure investors and financing for a business.

Business Plan Template

bpt-cover-gif-1Working on your business plan? Try using our Business Plan Template. Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is primarily used as a tool for sourcing capital. This document is an entrepreneur’s way of showing potential investors and/or loaners how their capital will be put to work and how it will help a business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically want a 20-25% ROI from the capital they invest in a business.

Therefore, these investors need to know if – and when – they’ll be making their money back (and then some). Additionally, they’ll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company’s strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business’s goals are and how the business will achieve them.

To show potential investors that they’ve addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies – from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business’s break even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

3. Legitimizing a business idea.

Everyone’s got a great idea for a company – until they put pen to paper and realize that it’s not exactly feasible.

The business plan is an aspiring entrepreneur’s way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics – and that’s exactly what the business plan is for.

It ensures an entrepreneur’s ducks are in a row before bring their business idea to the world and reassures the plan’s readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your Business class.

Speaking from personal experience, there’s a chance you’re here to get business plan ideas for your Business 101 class project.

If that’s the case, might we suggest checking out this post on How to Write a Business Plan – providing a section-by-section guide on creating your plan?

Types of Business Plans

1. Startup Business Plan

Arguably the most common type of business plan, a startup business plan is used for brand new business ideas. This plan is used to take a business concept and lay the foundation for its eventual success.

The biggest challenge with the startup business plan is that it requires its writer to completely start from scratch. Startup business plans start with a blank word document, and before they are finished, need to reference existing industry data and explain unique business strategies and go-to-market plans.

2. Business Acquisition Plan

Investors will still want to see a business plan to acquire funding to purchase an existing business in order to see how its new owner will run the business.

What will change and what will stay the same under new ownership, and why? Additionally, the business plan should speak to what the current state of the to-be-acquired business is, and why it’s up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased and what the new owner will do to turn the business around, referencing previous business metrics, sales projections after the acquisition, and a justification for those projections.

3. Business Repositioning Plan

When a business wants to save itself, reposition its brand, or try something new, some CEOs or owners will want to develop a business repositioning plan.

This plan should:

  • Acknowledge the current state of the company.
  • State a vision for the future of the company.
  • Explain why the business should (or must) be repositioned.
  • Outline a process for how the company will adjust.

Companies planning for a business reposition do so – proactively or retroactively – due to a shift in market trends and customer needs. For example, Pizza Hut announced a plan to drastically overhaul its brand last year, as it sees the need to shift from dine-in to delivery – a decision resulting from observing years of industry and company trends and acknowledging the need to reposition itself for the future of its sector.

4. Expansion Business Plan

Building onto a successful business venture with another location typically requires its own business plan, as the project may require a new location, focus on a new target market, and demand more capital.

Fortunately, an expansion business plan allows its writers to reference sales, revenue, and successes from any previous location(s). However, as great as a reference as these points can be, it’s important to not be too reliant on them, since it’s still a new business that could succeed or fail for a myriad of reasons.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan – and the business it outlines – will be.

If you need help starting your business plan, download Download HubSpot’s Free Business Plan Template and fill out the sections to meet your business idea’s concept.

11 Sample Business Plans to Help You Write Your Own

Ask any successful sports coach how they win so many games, and they’ll tell you they have a unique plan for every single game they coach. To have a fighting chance against any of their opponents, they need to prepare a specific game plan tailored to each of their opponents’ strengths and weaknesses. Otherwise, they’ll get crushed.

Continue reading “11 Sample Business Plans to Help You Write Your Own”

Everything You Need to Know About Business Process Automation

When I think of automation, my first thought is that judgment day from “The Terminator” is upon us.

However, conspiracy theories aside, automation can actually help marketers grow better and do their jobs more efficiently.

In fact, 29% of marketers are using automation to help them personalize customer engagement. Overall, marketers’ adoption of artificial intelligence has grown by 44% since 2017.

Continue reading “Everything You Need to Know About Business Process Automation”

The Ideal Marketing Stack for Every Stage of Your Business

If your business has a web presence, odds are you support it with marketing tools — plural. If your marketing efforts rely solely on a single, siloed application, you’re selling yourself short.

Unlock tips, systems & recommended resources to stay ahead of the tech curve.

Digital marketing efforts are generally a sum of several parts — a collection of tools and resources that serve distinct purposes, complement one another, and ultimately work together to generate and convert leads.

That “sum of several parts” is often referred to as a marketing tech stack. Let’s get some perspective on what that term means, which specific tools you can use to compose one of your one, and how those tools can help you through every stage of your business.

When constructing a marketing stack of your own, don’t hesitate to diversify. It can include everything from social media marketing resources to content intelligence software. 

Include anything and everything you feel you need — so long as you can afford it. Your stack could wind up looking nothing like those of other companies in your space, and that’s fine.

Stacks are often specific to individual businesses’ particular structures and strategies. Your main priority is finding the tools that best suit your company’s needs, ambitions, and budget.

Your Marketing Stack Grocery List

Every marketing tech stack should be tailored to aid with three functions: attracting prospects, engaging them, and analyzing the interactions you have with them. Each stage of that process can involve several possible tools.

Attract

SEO Tools

SEO — or search engine optimization — has become a crucial component of most companies’ digital marketing efforts. Online visibility is an invaluable asset to any business with a web presence.

If your website turns up on the front page of Google when someone searches for a keyword — relevant to your space — your business will look more trustworthy and legitimate. That won’t be lost on the savvy, skeptical prospects of the modern age.

A solid presence on search engine pages is no longer a luxury, specific to large enterprises. It’s becoming a necessity for businesses of any size — particularly those in ecommerce. No matter what your business does, you’ll gain a lot from well-constructed, well-executed SEO efforts. Having tools to help facilitate those in your marketing stack is a big help.

SEO tools: Ahrefs, Botify, Browseo

SEM Tools

Paid advertising on search engines has become one of the most popular lead generation tactics among marketers. Just like SEO, SEM — or search engine marketing — can be central to improving your company’s online visibility. The quality of your SEM determines the placement of your paid ads on search engines. And just like a well-executed SEO effort, exceptional SEM adds a new layer of credibility to your marketing.

High ad placements mean your marketing material is relevant to your prospects and achieving its purpose. If you’re willing to budget for paid ads, then look into incorporating SEM tools into your marketing stack. They’ll allow you to get the most value of those kinds of campaigns.

SEM tools: Hubspot Ads, SEMrush, Supermetrics

Social Media Marketing

Social media plays a significant role in most companies’ digital marketing. 91% of all businesses in the United States use it to support their marketing efforts. And for good reason — seven out of ten American adults have a presence on at least one social media platform.

The concept of social media is inherently personal. Users are encouraged to express their interests on their preferred platforms, making them some of the most straightforward locations to identify and reach interested prospects. An effective marketing stack will almost always include resources to help your social media efforts.

Social media tools:

Content Creation and Blogging Tools

Content creation is central to any marketing effort that relies on organic traffic. A well-maintained blog is one of the most effective assets available for garnering and retaining interest from prospects.

If you can establish yourself as a thought leader in your industry through the content you produce, you’ll bring in a base of customers with an immediate interest in you and your space. That’s why it’s important to consider incorporating content creation and blogging tools when constructing your marketing stack.

Content creation tools: HubSpot, WordPress, Wix

Engage

Chatbots

Once you’ve hooked prospects with your lead generation tools, make them feel important. Demonstrate how much you value them and their business. Offer them their first experience with your exceptional customer support. Chatbots can be a big asset to that process. They can guide and gauge customer interest while also answering questions your prospects might have about your product, service, or business as a whole — no matter when they ask them.

This kind of software allows you to engage with your prospects automatically. If you create helpful, intelligent chatbots that can explain your product or service comprehensively, you’ll demonstrate that your business is well-managed and able to answer questions they might have as customers.

Chatbot software: HubSpot, Drift, LivePerson

Email Marketing

When done right, email marketing can both capture and sustain your leads’ interest. It’s designed to guide them through the purchasing process. Email marketing software allows you to reach a wide range of prospects with a degree of personalization that most other marketing applications can’t offer. You can send content to leads based on their interest levels, buyer personas, and where they stand in their buyers’ journeys.

Email marketing tools allow you to connect with and engage prospects on a more personal level than others on this list. There are several types of email marketing software available, and a solid marketing stack generally features one.

Email marketing software: MailChimp, Constant Contact, ActiveCampaign

Marketing Automation

A solid Marketing automation software might be the most critical application to include in your marketing stack. Almost every other tool on this list can hinge upon the data marketing automation tools can gather. Marketing automation platforms can organize and store customer data, score and manage leads, and perform several other functions to help construct and guide your marketing campaigns.

An exceptional marketing automation platform provides the foundation for a well-constructed marketing stack. No matter how you want to structure yours, consider adding marketing automation tools above all else.

Marketing automation software: HubSpot, Ontraport, Nextiva

Sales Engagement Platforms

Your company’s content and messaging should have some degree of consistency to them. You want your business to have a unique voice, message, and messaging cadence. Sales engagement platforms can help you establish that. They contain resources that allow content and messages to be centrally accessed and edited throughout an entire company, ensuring cohesion in messaging for sales and marketing efforts.

Sales engagement platforms perform other functions as well, including enabling integrated communication within your business, offering engagement analytics, and providing actionable insights and guided selling. If you want help defining your brand voice, consider incorporating a sales engagement platform into your marketing stack.

Sales engagement platforms: Outreach, SalesLoft, ClearSlide

Analyze

Web Analytics

If you want to understand how your prospects and leads are interacting with your website, you’ll need web analytics software. Like a marketing automation platform, it’s one of the most crucial components to an effective marketing stack. It measures, reports, and analyzes your web traffic, providing the basis for you to gauge the efficacy of your online marketing efforts and understand what you could be doing better.

Without web analytics software supporting your marketing stack, you could be shooting in the dark when it comes to honing your marketing efforts. You need to know what is and isn’t working for you, and web analytics software is one of the best means of understanding that.

Web analytics software: Sisense, Google Analytics, Looker

Business Intelligence

Business intelligence software tracks customer purchasing patterns and trends. It’s an aggregate of tools used by companies to retrieve data, analyze it, and ultimately turn it into actionable insights and solutions. The data business intelligence software uses comes from internally generated data — not from outside sources.

Business intelligence software can be another useful tool in a marketing stack. By leveraging one to track customer purchasing patterns, you can get a new layer of insight that can ultimately guide your marketing efforts.

Business intelligence software: Oracle BI, Domo, Tableau

Content Intelligence Software

Content intelligence software analyzes your customer data using artificial intelligence, machine learning, and natural language processing to improve your content marketing efforts. It can give insight into what content you should share, update, and promote — among other important factors and actions relevant to the content you produce.

If you’re making a substantial push in terms of content marketing, you could get a lot of mileage out of including this kind of software in your marketing stack. It can help you identify the right voice and topics necessary to establish yourself as a thought leader in your space.

Content intelligence software: Ceralytics, Crayon, BuzzSumo

A/B Testing

A/B testing software is designed to help you optimize your conversion rate. With A/B testing, two or more versions of a single webpage at random to your website visitors and identifies which version has the best conversion rate. It’s an effective way to hone your marketing efforts by allowing you to experiment with different web copy, messaging materials, and content.

Leveraging A/B testing is an effective way to bolster your marketing efforts. It allows you to better understand what your customers want out of your messaging. If you’re interested in tools to help you refine the tone and strategy you use to reach your customers, this kind of software can be a valuable asset to your marketing stack.

A/B testing software: Optimizely, VWO, Adobe Target

There’s no definitive list of resources you absolutely need to use to build your optimal marketing stack. You might wind up constructing one entirely specific to your business. Ultimately, you have to feel out how which applications and platforms work best for your needs, structure, size, and budget. Regardless of what it ends up looking like for you, a marketing stack will almost always be an asset to your online marketing efforts.

New call-to-action