30 Small Business Ideas to Make Money in 2022 (Low Investment Ideas)
With so many business ideas in 2023, it can be hard to figure out which are worth pursuing.
While jumping on a new trend can sometimes be risky — it can also be highly rewarding. You may notice that many of the ideas on this list have been growing in popularity recently. Others have been popular for a long time, making them more competitive but less risky. However, all the small business ideas below will help make you money.
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30 best business ideas of 2023
If you have been asking yourself what business to start, then this list is for you. According to small business statistics , one of the biggest motivations for opening your own business is being your own boss. Owning a business gives you the freedom to work when, where, or how you want.
Want to work at a beach or your grandma’s house? Go ahead, no one is going to stop or question you. This is the dream life many people hope to live one day, and thanks to some great business ideas, achieving that lifestyle is well within your reach.
Let’s take a look at the list of business ideas that’ll make you money in 2023:
Are you looking to sell products online but don’t have the money to buy and store inventory? Consider dropshipping! Dropshipping is an ecommerce business model in which you don’t have to manage any physical products.
All you have to do is set up an online store and partner with suppliers who are ready to store, package, and ship orders to your customers. There’s no need to spend hours on product research, because you can use dropshipping apps like Automizely to find awesome products to sell .
Check out this dropshipping course from Shopify to learn more about selling online without inventory. If you’re searching for easy online business ideas to pursue, it would be hard to find something that tops dropshipping. It’s one of the simplest businesses to start if you have access to the right tools and resources.
The biggest reason people are often drawn to dropshipping is that you don’t have to hold inventory. However, if holding inventory isn’t an issue (maybe there’s enough room in that spare closet), you can consider sourcing products wholesale.
Online marketplaces like Handshake enable small business owners to find unique, high-quality products and build long-lasting relationships with suppliers. It’s worth checking out as a supplement to dropshipping if you already know what you want to sell.
2. Print on Demand
If you’re looking for proven business ideas to execute, try print on demand .
Print on demand (POD) is when you sell your own custom designs on items like phone cases, mugs, and t-shirts, but you don’t actually print the artwork. Instead, you collaborate with suppliers who print your design on the product—they even package and ship the item to your customer, so you don’t have to worry about logistics. Also, you only pay once you have sold the products. No sales equals no costs.
One of the quickest ways to get started is to create a Shopify store and install a POD app like Printify . In terms of marketing, partnering with Instagram influencers to promote your POD items is an effective way to reach audiences. To evaluate whether print on demand is the right option for you, watch our video where we get into a healthy debate with Wholesale Ted (a print-on-demand company ).
Multilingual people are always in demand, so if you can speak two or more languages, consider starting a small business where you can monetize those skills.
You can look for clients on Upwork and Flexjobs and slowly build your portfolio. As you work successfully with more and more companies, you can hire more translators who specialize in other languages to take things off your plate. It’s also a good idea to market your business on social media websites, as it can help you reach a wider audience.
Got only a few hours to spare each day? Translation is one of the best side business ideas to pursue, as it lets you schedule your clients based on when you are available to work.
4. Website Flipping
Website flipping is among the new business ideas that have gotten everyone from work-at-home parents to recent graduates excited. It involves buying an already running website, improving its design and content, and then selling it for a profit.
There are quite a few places where you can buy and sell websites to earn a profit. Shopify’s marketplace, Exchange , for example, allows you to buy ecommerce websites that you can further improve via content marketing, SEO, and other tactics. Once your site begins to generate more revenue than when you acquired it, you can list it for sale on the marketplace.
5. Home-based Catering
If you have a knack for cooking and see it as a creative outlet, you can make a decent income by opening a home-based catering business.
The initial investment depends on how big you want the setup to be. For example, if you start with smaller events that you can manage on your own, you should be able to start your business for less.
Most home-based caterers start by creating a website , experimenting with local food markets, or joining platforms that allow cooking experts to squeeze some profits from their culinary skills.
6. Dog walking
It can be difficult to keep up with a furry friend, particularly high-energy breeds with limited outdoor access. As a professional dog walker, you’ll be helping pet owners in the community keep their dogs happy, healthy, and well exercised.
Dog walking requires no initial investments other than marketing and business liability insurance . This will protect you in case of accidents, bites, or unexpected lawsuits. It’s a good idea to charge prices that reflect your insurance costs, with the average range between $30 to $60 an hour.
You can establish a presence for your dog walking business on a number of platforms, including Wag! , Rover , and Care.com . Offer promotions for new clients and build a positive reputation by requesting reviews from those you’ve worked with in the past.
7. Virtual assistance
One of the most successful business ideas is to offer virtual assistant services. Everyone from large enterprises to solopreneurs requires help with the day-to-day management of their business. You can use your excellent organizational skills to take some weight off their shoulders.
Of course, you’ll get paid for the time and effort you put into answering emails, scheduling meetings, and performing other administrative duties.
You can land your first few clients by responding to listings on platforms like FreeUp , PeoplePerHour , or Virtual Assistant Jobs . This is a proven business model, as people are always looking for efficient virtual assistants.
8. Personal shopping
Do you often get praised for your eye for fashion trends? Are you someone who friends and family come to for clothing advice? Personal shopping can be a business that builds on those skills.
Personal shoppers find clothing items for clients who don’t have time to shop for themselves. Duties involve evaluating your client’s wardrobe, visiting websites, and picking items that will suit them. There are all kinds of products on different online clothing boutiques, so you don’t necessarily have to shop offline to get this business started.
Plus, you don’t need to hold any special certification or degree to become a personal shopper. If your interests lie in business ideas with low investment, personal shopping might be the ideal route to consider.
9. Car detailing
Contrary to popular belief, it's entirely possible to make car detailing a full-time business. The average profit of car detailing is anywhere from $50 to $400 per vehicle, meaning you could make a healthy profit if you find consistent clients.
The key to success in the car detailing business is marketing. You’ll need to spread the word about your services through a website or social media platform, and encourage regular reviews as well. Try to offer discounts for new clients or package deals for those who commit to multiple sessions.
All you need to get started are cleaning supplies and a driveway. You may consider getting certified through the IDA or taking a craftsmanship seminar to enhance your skills.
10. Online tutoring
If you’re an expert in art, math, or another subject, you can start the business of online tutoring. An essential prerequisite is having a bachelor’s degree in the subject you intend to teach.
You can find online tutoring clients on sites like Skooli and Tutor.com . For the best results, always teach subjects that relate to your area of expertise, because you’ll be able to share your skills and constructive knowledge to enhance your students’ own knowledge. You can deliver lectures and interact with your students over Zoom, making online tutoring one of the easiest online businesses you can start.
11. Greeting cards
Greeting cards are always in style, so if you have a good eye for design or just love showcasing your artwork on physical items, this is one of the best creative business ideas for you.
Before you can start looking for clients, you’ll need to have a handful of designs ready to go. Tools like Photoshop and Canva make it easy to create custom card designs. Additionally, you’ll need to stock up on supplies required to create greeting cards (ink, paper, etc.).
Pro tip: If you want to keep costs low, consider buying your supplies wholesale . Once you have the inventory, you can start generating revenue by marketing your business on Facebook, Etsy, and other similar platforms.
12. Content writing
Almost every company with a web presence needs help creating content for product pages, blogs , etc.
As such, starting a content writing or copywriting company could be one of the most profitable business ideas for you. Popular websites for finding those first few customers include Remote.co , Problogger , and BloggingPro .
You can also join content writing groups on Facebook to get more exposure for your business. To make a good impression on clients, consider offering keyword optimization or custom graphics as part of your services.
13. Homemade products
If you have a knack for molding soap bars, brewing drinks, or baking specialty products, a homemade crafts business may be a great fit for you. Not only does it serve as a wonderful creative outlet, but it can easily scale up as word of your business gets out.
Some of the most profitable homemade products include agricultural products, beauty solutions like cosmetics and soaps, and accessories such as jewelry. Ingredients and raw materials coupled with your labor should provide a sustainable return on investment.
You can start selling homemade products at your local farmers market , on a platform like Etsy , or with a storefront on iCraft . Try adding a unique twist to your products, such as dessert-themed bath bombs or pop-culture clothing items.
14. WordPress support
A lot of websites out there are hosted on WordPress, and almost every WordPress website owner requires support in some form. So, if you’re familiar with the ins and outs of this platform, you’ll have several opportunities to make money.
Clients may contact you to fix their CSS, find and address security holes, and more. While you can use platforms like PeoplePerHour and Upwork to get your first clients, we recommend creating a custom website and listing your services there. That way, you’ll be able to avoid high commissions and build high-quality relationships with your clients.
Hands down, offering WordPress support is one of the best business ideas to try in 2023.
15. Career coaching
With rising unemployment and a saturated job market, there’s no shortage of people needing help finding jobs. If you have a talent for helping your friends and family find suitable employment, you can probably help others too.
Consider starting a career coaching business where you help others figure out what the best career for them is, how to nail an interview, what traits define a good candidate, and more. You can look for clients in Facebook groups or on platforms like Coach.me .
The best thing about this business is that you can make money by conducting four to five hourly sessions a month. Plus, you can coach multiple clients in a single session. If you’re looking for good business ideas that won’t occupy too much of your time, career coaching may be the right option for you.
16. Email marketing
Are you good at writing emails? Have you cracked the code for crafting subject lines that people can’t help but click? If so, you can step into entrepreneurship and make money by launching an email marketing business.
You can find companies that need help with their email strategy on platforms like PeoplePerHour and Upwork , as well as via cold outreach. Once you demonstrate that skill of enticing recipients, clients will rush to get your services and even agree to the price you quote them (major brownie points if you can help grow their email list).
Startup costs include investing in email marketing tools , which will automate many of your tasks.
17. Contract cleaning
Not everyone has the time or skills to clean on a regular basis. Becoming a professional cleaner allows you to assist home and business owners with scrubbing, dusting, vacuuming, and more.
Startup costs for household cleaning businesses are extremely low. Cleaning supplies and materials cost less than $100, although you could also purchase specialty equipment like steam vacuums or carpet cleaners. It’s a good idea to set up a website or social media page to get the word out for cheap.
The fees you charge will depend on the needs of your clients. Most cleaners charge by the hour, although some have additional expenses associated with certain tasks (organization, deep cleaning, etc.). Use tools like Angi Leads to display your business and discover what other people are charging. Be sure to register as an LLC and complete all necessary paperwork.
18. Meals to go
There’s no end to the line of people who struggle to find time to cook nutritious and healthy meals. This has led to a rise in meals-to-go businesses, offering all kinds of cuisine options. You can capitalize on this trend by starting your own meals-to-go business in your city, state, or neighborhood.
Contrary to popular belief, you don’t need to invest in designing a large commercial kitchen. A shared rental kitchen is good enough to run a meals-go-to business. These places are usually equipped with essential supplies and can be rented by month, day, or hour. You can find shared-use, licensed commissary kitchens through websites like The Kitchen Door .
19. Landscaping services
Have a passion for gardening and yard work? Starting a landscaping business may be the perfect way to turn your hobby into a profitable endeavor. Landscaping services include anything from mowing lawns to planting flowers and shrubs and may or may not be seasonable, depending on your climate.
Determine what you can do best in a yard and market your business to a specific audience. Keep a curated portfolio of your best work, including colorful photographs with detailed outcomes for customers. If you offer unique services (fertilizing, pest control, etc.), be sure to highlight that across your social media platforms.
You can find your first landscaping clients by going door-to-door in the neighborhood or hopping on platforms like TaskEasy . Websites like HomeAdvisor connect your landscape business with paying clients in your area. You can also get certified with the National Association of Landscape Professionals to boost your credibility.
20. Website testing
Did you know that brands with a digital footprint hire real people to give feedback on their websites? These opinions allow them to address issues that their developers may have failed to identify. You can hire a bunch of people on a freelance basis and create your own website testing company.
As you take on projects, your employees will receive a set of questions that they need to answer as they navigate a company’s website. Through video, they’ll communicate their initial thoughts on the current user experience and how the site could be improved.
You can find work through websites like UserTesting , Ferpection , and TryMyUI .
Do you have experience in generating backlinks and improving the search engine visibility of a website? If yes, then there’s an opportunity for you to cash in on your skill set.
Site owners worldwide require the services of SEO experts, so opening a business in this field could turn out to be one of your best decisions. When looking for clients, focus on a niche audience, learn from the experiences, and build your portfolio—showcase your success stories and you are bound to see an influx of clients if your SEO techniques are on point.
You can choose to target all sorts of companies or appeal to businesses in a particular niche, such as in the legal, health, or financial sector. With monthly retainers of $501 to $1,000, selling SEO services is one of the best business ideas to make money in 2023.
22. App development
App development is one of the best profitable small business ideas, since so many companies require an app. Not to mention, the cost of starting this venture has drastically gone down due to the growth of tools and affordable developers.
Today, you can use software like OmniGraffle or Sketch to create the wireframes and mockups before you decide to publish the app. Alternatively, you can hire a freelance app developer via AngelList and Upwork .
There’s also the opportunity to earn passive income by creating apps for the general audience. Of course, that requires you to develop a monetization strategy that generates recurring revenue. Profitable strategies include offering in-app purchases and charging for a premium version of your app.
23. Stock photography
If you have the ability to capture great candid moments or recently did a portrait shoot of a relative, you can become a stock photographer by registering a sole proprietorship under your name.
Companies like Shutterstock , Adobe Stock , and the like are always open for image submissions. You can start by listing a few of your existing photos on these platforms. Once you’ve submitted your photographs, wait for people to download them.
Most stock photography websites pay you a royalty for every download on their platform. Another option is to launch your own photography website and sell images directly to people, which is only viable if you have the resources to invest in marketing.
24. Virtual dance studio
The upsides to a virtual dance studio are pretty obvious: you don’t need to rent a big space, and it’s convenient to record, publish, and share the choreography at your own discretion. It’s even possible to give dance classes from home, making it one of the best home-based business ideas . Plus, there’s no limit to the number of students you can enroll in your class.
To start a virtual dance studio, you’ll need to invest in video conferencing software, such as Zoom . You’ll also need high-speed internet to ensure there are no lags or buffering during the livestream. Make sure to arrange enough classes per month so that your students learn their routines fast.
If you have a passion for creating your own unique choreography, you may also find opportunities to partner with dance schools to give their students access to your content on a membership basis.
25. Instagram consulting
If you know the secrets to Instagram engagement , consider becoming an Instagram consultant. Clients will pay you for creating engaging captions, responding to comments, creating attractive bios, and more.
You can monetize these services by charging a specific rate per hour or by project. This is the perfect business idea for digital nomads , as everything can be managed from a laptop or smartphone.
To become a sought-after Instagram consultant, master the skill of creating killer Instagram ads that get people to engage and buy from businesses. You can get your first clients by marketing your business on Upwork and other social media platforms.
26. Video production
According to video marketing statistics , 85% of internet users in the US watched an online video on their devices. With more and more videos being watched than ever before, there’s certainly a need for people who can record, edit, cut, and publish videos. Therefore, starting a video production company might turn out to be a lucrative business idea for you.
The initial investment in this business is a basic lighting set, wireless microphones, one to two cameras (and lenses), and editing software like Adobe Premiere or Final Cut Pro . See if you can find second-hand varieties for some of this equipment in order to reduce startup costs.
You can offer to produce video content for companies’ YouTube channels, manage graduation and wedding videography, and more. While there’s no restriction to the types of projects you can do, specializing in a niche makes it easy to stand out in a busy marketplace.
27. Software education
Do you have acquaintances who lack proficiency in computer software? If so, you can set up your own software education business and enroll students on a monthly basis.
Pupils might include entrepreneurs looking to build on their IT skills, or other small business owners looking to master software like Excel and PowerPoint. If you have the expertise, you can lead from the front by teaching most classes.
As your business grows and more people sign up for your programs, you can hire freelance software experts to teach students based on their area of expertise. Although you can rent out space for classroom lectures, consider hosting virtual classes to keep costs low and expand your business to international markets.
28. College preparation
Helping high schoolers get accepted into college is a booming business. According to IBISWorld, the market size of the testing and educational support industry was $17.9 billion last year, so there’s a lot of money to be made if you can gain a foothold in the market.
To start, pick a certain area of college prep you’d like to run your business around. For instance, you can offer ACT tutoring, help students brush up on practice admission essays, etc. Once you’ve narrowed your focus, it’s time to register and introduce the business to students.
29. Niche staffing agency
Nearly every industry has open jobs, and employers are keen to hire the best people for their companies. Your task as a niche staffing agency is to match employees to employers in your sector of choice.
Figure out what type of roles you’ll be staffing (Junior? Mid-level? C-level?) so that you can identify the right candidates for the position. Additionally, consider the employment terms that your agency will share with potential candidates.
You can be a temporary, temporary-to-permanent, or long-term staffing agency based on the needs of the market.
30. Digital event planning
One of the best small business ideas is to open up a digital event planning company. In this business, you’ll plan, organize and report on digital events like webinars and online summits for different companies.
Money can be made by charging an hourly fee for your service, selling sponsorships, etc. If you ever dreamed of planning a wedding or exhibition, but never quite had the time to organize anything, you can still channel your inner facilitator by planning digital events for people and businesses.
There you have it, a list of 30 small business ideas that’ll make you money in 2023. To give yourself the best chance of success, focus on one idea at a time until you find one that aligns with your abilities.
Thousands of entrepreneurs have implemented these business ideas to make money, so you can be sure that you’re putting your time and effort into something viable and proven. Whether you’re a college student, a work-at-home parent, or anyone else looking to start a business , remember there are plenty of opportunities to earn a sizable income.
If you’re looking for even more business ideas, don’t forget to check out Shopify’s post on the 23 most profitable business ideas in 2023 .
30 Business Ideas to Try In 2023
- Print on demand
- Website flipping
- Home-based catering
- Dog walking
- Virtual assistance
- Personal shopping
- Car detailing
- Online tutoring
- Greeting cards
- Content writing
- Homemade products
- WordPress support
- Career coaching
- Email marketing
- Contract cleaning
- Meals to go
- Landscaping services
- Website testing
- App development
- Stock photographer
- Virtual dance studio
- Instagram consulting
- Video production
- Software education
- College preparation
- Niche staffing agency
- Digital event planning
Which of these business ideas are you looking to start in 2023? Share your answer in the comments below!
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How to Write a Business Plan, Step by Step
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1. Write an executive summary
2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.
A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.
Here’s a step-by-step guide to writing your business plan.
» Need help writing? Learn about the best business plan software .
This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.
» MORE: How to write an executive summary in 6 steps
Next up is your company description, which should contain information like:
Your business’s registered name.
Address of your business location .
Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.
Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.
Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.
» MORE: How to write a company overview for a business plan
The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.
If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.
In this section, go into detail about the products or services you offer or plan to offer.
You should include the following:
An explanation of how your product or service works.
The pricing model for your product or service.
The typical customers you serve.
Your supply chain and order fulfillment strategy.
Your sales strategy.
Your distribution strategy.
You can also discuss current or pending trademarks and patents associated with your product or service.
Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.
Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
» MORE: R e a d our complete guide to small business marketing
If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.
You may also include metrics such as:
Net profit margin: the percentage of revenue you keep as net income.
Current ratio: the measurement of your liquidity and ability to repay debts.
Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.
» NerdWallet’s picks for setting up your business finances:
The best business checking accounts .
The best business credit cards .
The best accounting software .
This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.
List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
Here are some tips to help your business plan stand out:
Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.
The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.
How to write a business plan in 7 steps
With this step-by-step guide, learn how to write a well-written professional business plan that can help you successfully start your business, apply for funding, and grow.
Writing a business plan doesn’t have to be complicated. You don’t need to have a business or accounting degree to put together a viable business plan. Business planning can be simple—even fun!
This guide will show you how to get your plan done without any complexity or frustration. By the time you’re done, you’ll be better prepared to start, run, and grow your business. Here are the 7 steps to write a business plan:
- Executive summary
- Products & services
- Market analysis
- Marketing & sales
- Company organization and management team
- Financial projections
Be sure to download our free business plan template to start writing your own business plan as you work through this guide. For a more detailed guide to writing a business plan, download our free ebook : The Easy Way to Write Your Business Plan.
What is a business plan?
A business plan is a document that describes your business, the products and services you sell, and the customers that you sell to. It explains your business strategy. How you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
Most business plans also include financial forecasts for the future. Setting sales goals, expense budgets, and predictions for cash flow.
Now, a business plan can be far more than just a static document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. A management tool to analyze results, make strategic decisions, and showcase how your business will operate and grow. In short, if you’re thinking of starting a business or plan to pitch to investors or venture capitalists, writing a business plan can improve your chances of success.
Why do you need a business plan?
You likely already have a good idea of your business strategy in your head. So you may be wondering, “Why should I spend my time making a business plan?” Here are the top reasons why you should invest in planning:
Businesses that plan grow 30% faster.
A surprising amount of research has been done on business planning and has shown that companies that take the time to write a plan and review it regularly grow 30% faster than those businesses that don’t plan. Not only do these companies grow faster, but they perform better and are less likely to fail in the long run.
Lenders and investors need business plans
If you’re growing your business and plan on getting a business loan or raising money from investors, you’ll need a business plan. Most lenders and investors will ask for a plan, but even if they don’t want to see the actual document, they will ask you questions that only a solid business plan will be able to answer.
Business plans reduce risk
Starting and running a business is always risky. Instead of flying by the seat of your pants, you can use a plan to forecast potential cash flow issues and get ahead of any potential roadblocks so you aren’t caught off guard. A business plan will help you reduce your risk and help you navigate the future.
Business planning helps you make smart spending decisions
Before you make a big spending decision for your business, you need to know the potential impacts on your finances. With a business plan in place, you can easily explore different scenarios and see what impacts a new hire or an expansion to a second location will have on your business.
Need more reasons for why you need a business plan? Read our full list of reasons why having a business plan is important for small businesses .
How to write a business plan step-by-step
Whether you’re building a business plan to raise money and grow your business or just need to figure out if your idea will work, every business plan needs to cover 6 essential sections. Here’s an overview of each section:
1. Executive summary
The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally only one to two pages. Most people write it last, though.
Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. In fact, it’s very common for investors to ask for only the executive summary when they are evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation, and more in-depth financials.
Your executive summary should include a summary of the problem you are solving, a description of your product or service, an overview of your target market, a brief description of your team, a summary of your financials, and your funding requirements (if you are raising money).
Learn more about writing an effective executive summary .
2. Products & services
The products & services chapter of your business plan is where the real meat of your plan lives. It includes information about the problem that you’re solving, your solution, and how your product or service fits into the existing competitive landscape.
Start the products & services chapter by describing the problem that you are solving for your customers and what your solution is. This is a description of your product or service.
Next, you should outline your competition . Who else is providing solutions that try to solve your customers’ pain points? What are your competitive advantages over other businesses?
If you happen to have any competitive advantages, such as specific intellectual property or patents that protect your product—this chapter is a great place to talk about those things.
Finally, review your milestones and metrics. This is an overview of the next steps that you need to accomplish to get your product or service ready to sell, with target dates. If you’ve already achieved some key milestones, such as landing a crucial customer or taking on pre-orders, discuss that here.
3. Market analysis
This section is where you will showcase all of the information about your potential customers. You’ll cover your target market as well as information about the growth of your market and your industry.
First, describe your target market . Your target market is the group of people that you plan on selling to. Try to be as specific as possible. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers.
Next, provide any market analysis and market research that you have. You’ll want to explain how your market is growing over time and also explain how your business is positioned to take advantage of expected changes in your industry.
4. Marketing & sales
The marketing and sales plan section of your business plan details how you plan to reach your target market segments, how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.
Some businesses that distribute their products and reach their customers through stores like Amazon.com, Walmart, Target, grocery store chains, and other retail outlets should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles that the business may have to overcome.
The marketing & sales chapter of your business plan can also be a good place to include a SWOT analysis . This is purely optional but can be a good way to explain how your products and services are positioned to deal with competitive threats and take advantage of opportunities.
5. Company organization and management team
Investors look for great teams in addition to great ideas. Use this chapter to describe your current team and who you need to hire. You will also provide a quick overview of your legal structure, location, and history if you’re already up and running.
Include brief bios that highlight the relevant experiences of each key team member. It’s important here to make the case for why the team is the right team to turn an idea into a reality. Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before?
Your company overview should also include a summary of your company’s current business structure. The most common business structures include:
- Sole proprietor
Be sure to provide a review of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.
6. Financial projections
Last, but certainly not least, is your financial plan chapter. This is often what entrepreneurs find most daunting, but it doesn’t have to be as intimidating as it seems. Business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. That said, if you need additional help, there are plenty of tools and resources out there to help you build a solid financial plan.
A typical financial plan will include:
Sales and revenue projections
A monthly sales and revenue forecast for the first 12 months, and then annual projections for the remaining three to five years. Three-year projections are typically adequate, but some investors will request a five-year forecast.
Profit and loss statement
An income statement , also known as the profit and loss (or P&L), is where your numbers all come together and show if you’re making a profit or taking a loss.
Cash flow statement
A cash flow statement . While the income statement calculates your profits and losses, the cash flow statement keeps track of how much cash (money in the bank) you have at any given point.
A balance sheet lists the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business.
Optional sections to include when seeking funding
If you are raising money from investors, you should include a brief section of your business plan that details exactly how you plan on using your investors’ cash. This is typically just called, “Use of Funds.”
Investors will also want to see a short section on your exit strategy. An exit strategy is your plan for eventually selling your business, either to another company or to the public in an IPO. If you have investors, they will want to know your thoughts on this. If you’re running a business that you plan to maintain ownership of indefinitely, and you’re not seeking angel investment or VC funding, you can skip the exit strategy section.
For more information, read our guide on the different types of exit strategies .
Finally, discuss any assumptions and important risks for your business. Knowing what your assumptions are as you start a business can make the difference between business success and business failure. When you recognize your assumptions, you can set out to prove that your assumptions are correct. The more that you can minimize your assumptions, the more likely it is that your business will succeed.
An appendix to your business plan isn’t a required chapter by any means. However, it is a useful place to stick any charts, tables, definitions, legal notes, or other critical information that either felt too long or too out-of-place to include elsewhere in your business plan. If you have a patent or a patent-pending, or illustrations of your product, this is where you’d want to include the details. For more details, read about what to include in your business plan appendix .
Business plan writing tips
To help streamline the business plan writing process here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .
Determine why you are writing a business plan
Knowing why you are writing a business plan will determine your approach to your planning project. For example, if you are writing a business plan for yourself or just for use inside your own business, you can probably skip the section about your team and organizational structure.
If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the money you want and exactly how you’re going to use those funds. So, before you start writing your plan, think about why you are writing a business plan and what you’re trying to get out of the process.
Keep things concise
Probably the most important tip is to keep your business plan short and simple . There are no prizes for long business plans. In fact, the longer your plan, the less likely it is to be read.
So, focus on trimming things down to the essentials that your readers need to know. Skip the extended descriptions of your target market and instead focus on creating a plan that is easy to read.
Have someone review your business plan
Writing a business plan in a vacuum is never a good idea. It’s helpful to zoom out from time to time and make sure that your plan is logical and makes sense. You also want to make sure that it’s easy to read and understand. Don’t wait until your plan is “done” to get a second look, though.
Start sharing your plan early and find out from your reader what questions the plan leaves unanswered. This early review cycle will help keep you on track. If you need a more detailed review, you may want to explore hiring a professional plan writer to give it a thorough examination.
Use a free business plan template to get started
Knowing what information you need to cover in a business plan sometimes isn’t quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. If you’re looking for a free downloadable business plan template to get you started, download the template that’s been used by more than 1 million businesses.
Or, if you just want to see what a completed business plan looks like, check out our library of over 500 free sample business plans .
How do I write a simple business plan?
If you’re not ready to work on a detailed business plan and want to start with something shorter and simpler, we recommend starting with a simple one-page business plan . You’ll be able to put together an initial plan in less than 30 minutes. For many businesses, this is a great way to get started. And, if you’re not raising money from investors, this may be all the plan you need.
Next steps for writing your business plan
Whether you’re writing a plan to explore a new business idea, establishing steps to start a business, looking to raise money from investors, seeking a loan, or just trying to run your business better—a solid business plan will help get you there.
Business planning is a continuous process that can help you validate your idea, set goals, manage, and successfully pitch your business. One of the most helpful things you can do to build a successful business is to jump in and start planning. If you’re looking for a more comprehensive step-by-step walkthrough for writing a business plan, check out our Business Planning Guide .
If you need more than a template, we recommend exploring business planning software, such as LivePlan. It features step-by-step guidance that ensures you include only what you need in your plan and reduces the time you spend on formatting and presenting.
You’ll also get help building solid financial models that you can trust, without having to worry about getting everything right in a spreadsheet. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. This makes it easy to track your progress and make adjustments as you go.
Business plan FAQ
A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investor, and identify areas for growth. Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.
The seven steps to writing a business plan include: 1. Write a brief executive summary. 2. Describe your products and services. 3. Conduct market research and compile data into a cohesive market analysis. 4. Describe your marketing and sales strategy. 5. Outline your organizational structure and management team. 6. Develop financial projections for sales, revenue, and cash flow. 7. Add any additional documents to your appendix.
There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid: 1. Not taking the planning process seriously. 2. Having unrealistic financial projections or incomplete financial information. 3. Inconsistent information or simple mistakes. 4. Failing to establish a sound business model. 5. Not having a defined purpose for your business plan.
Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan. However, these are the key questions you should ask and answer with your business plan: – How will your business make money? – Is there a need for your product or service? – Who are your customers? – How are you different from the competition? – How will you reach your customers? – How will you measure success?
The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place. If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan or a 3-10 page Lean Plan to get all of the necessary information in place.
While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. 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 when applying for funding or pitching to investors. 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. 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. One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most 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. Lean Plan: The Lean Plan 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’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.
A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision. However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.
The core elements of business planning are the same for nonprofit organizations and for-profit businesses. The main difference between the two is that nonprofits are primarily driven by a specific mission or purpose. While a for-profit organization is typically driven by growth and improved performance. Additionally, nonprofit organizations will need to intently focus on their promotional, partnership, and fundraising strategies. While some of this is present in for-profit businesses, the need to thoroughly outline how and who you will continue to receive funding is far more important as a nonprofit.
Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan. You can follow Noah on Twitter .
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Here are the 7 steps to write a business plan: Executive summary Products & services Market analysis Marketing & sales Company organization and management team Financial projections Appendix Be sure to download our free business plan template to start writing your own business plan as you work through this guide.