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Business planning, website development, product or service selection, marketing and promotion, is it a good idea to start an online business, can i start an online business with $100, what are different types of online marketing strategies, the bottom line.

Small Business
How to Start a Business

Starting an Online Business: A Step-by-Step Guide

Crafting a Winning Business Plan: Setting Goals and Strategies

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

If you want to get into the online business game, it’s a good time to start. The COVID-19 pandemic reshaped online consumer spending, including how people shop online and how they research products.

Today, 76% of Americans buy products online. Furthermore, roughly a third of people purchase items online weekly. From setting up an ecommerce business to offering web design services, there are countless avenues to explore as an entrepreneur.

Below, we’ll walk through each step to building an online business.

Key Takeaways

When starting an online business, comprehensive market research is critical for identifying your target audience and learning how to resonate with your customers and understand their needs.
Creating a business plan is an important step for outlining your business goals. It also includes your product description, target market, and financial projections, among other core components.
Building your website involves setting up a domain name, finding a hosting company, and designing a strong website with consistent branding that allows your customers to navigate it intuitively.
Choosing the right product or service to sell is essential. It’s important to think about how you’re addressing an unmet need.
Several digital marketing strategies can be utilized, from content marketing to paid advertising, to help your business grow.

Successful online entrepreneurs study hard in order to have a thorough understanding of their market. This is important for knowing exactly how to reach your target market , because these are the people who will buy your products and drive your business growth.

At its core, market research is about understanding your customers’ needs, pain points, and solutions. It is designed to help your business better meet these needs.

Steps to Conduct Market Research

Market research involves understanding key aspects of your current and future customers. To get a clear sense of your target market, outline the characteristics of your audience—for example, age, location, gender, income, job title, and key pain points.

Once you have identified your target audience, conduct research on the following topics, which will tell you about how they make decisions and how you can better position your business:

What are the challenges that your target market faces?
Where do they research a given product or service?
What are their views on pricing for this product or service?
What factors influence their decision to make a purchase?
Who are your competitors?

To put this market research into action, there are a number of different avenues you can take:

Focus groups
Competitive analysis
Brand awareness research
Market segmentation research

Consider the following questions that may be asked in an interview or focus group to learn more about your audience:

“How do you search for that product?”
“How useful was it?”
“What words do you use when you search on Google?”

When you have completed your market research, identify what you have learned as well as your next steps based on these insights.

Creating a business plan is a key first step for all business owners . It is important for companies looking to secure funding resources. It also serves as a blueprint to summarize your key business objectives and goals.

To write a business plan , incorporate these eight main sections, which are often found in traditional templates:

Executive summary : This is typically a one-page section that explains your objectives and includes your mission statement, core team, and why your company is positioned for success.
Company description : This describes what you offer, your competitive advantages, and your business goals.
Market analysis : This is where you explain your target market, market size, market trends, and competitive landscape.
Organization and management : Explain who is working on your team and their professional background and experience.
Service or product line : Describe the product or service you are offering, including any copyright or plans for patenting.
Marketing and sales : Discuss your marketing and sales strategy. Discuss your pricing, key metrics, and sales plan.
Funding request : If you are a company looking for funding, here is where you outline the capital you are requesting and where it will be allocated.
Financial projections : Include projections for your company’s revenue and expenses. Consider including an income statement, balance sheet, and cash flow statement in this section.

A business plan is important because it helps clarify your action points, who you are, and what you offer, all in a coherent template.

Getting your business online is the next key step. In an ever-changing environment, it is important to know the tools, trends, and strategies for building a strong online presence to allow your business to grow.

Registering Your Domain

The first step is registering your name, or your website address. This can be in the form of your business name “.com.” To purchase your domain name, you can go to sites like GoDaddy or Namecheap . If you decide to build your website using WordPress, you will need to use a site such as these to host your website.

Web Hosting Companies

Alternatively, you can buy your domain name at a hosting company. These are companies like Shopify , Wix , or Amazon Web Services , that may also offer tools to build your website and release content on them.

Website Design

A well-designed website is important for many reasons. Using a website builder, such as Mailchimp or Squarespace , can allow you to choose a theme, customize your pages, create relevant content, and set up a payment page.

Other key aspects of your website design include its functionality, simplicity, and ease of use. Allowing your potential customers to navigate the site intuitively will be key to their experience. Brand consistency—in your logo, colors, and typeface, for example—is also key to creating a unified brand.

Another essential part of website design is its mobile application. You’ll want to ensure that your website runs smoothly on mobile, that images load properly, that the text is legible, and that buttons are intuitive to click.

This step focuses on how to choose the right product or service to sell. At the heart of this choice is the goal of solving a customer’s problem. But there are a number of strategies you can use to identify your product idea.

For example, you might consider analyzing companies with high-profit margins, products that align with your passion, burgeoning trends, items trending on online marketplaces, and/or customer reviews.

With this in mind, analyze how this product will get to your customers. Additionally, you may consider products that are not available in stores in your local market but are offered in communities such as Europe or Japan, for example.

Marketing strategy and promotion is an essential driver of business growth. As the digital landscape evolves, it’s important to have an effective marketing plan that resonates with changing consumer preferences and needs.

Here are questions that companies can consider as they create their marketing strategy, navigating today’s environment:

Impact, value, and growth : What are the goals and key performance indicators (KPIs) that will measure success for your business? How will you explain the value that the business provides to its customers and/or society? Create an “elevator speech”—a 30-second description of what you offer and why it’s special.
Customer need and brand promise : How does the brand meet a customer’s need through its products and services?
Customer experience : How will the business deliver the best experiences at each stage of the customer journey?
Organizational model : How will the business operate to serve the customer with the most impact?

These will help you understand what types of strategies can have real impact.

Types of Marketing Strategies

Consider the following digital marketing strategies that can be used for your online business:

Email marketing
Social media marketing
Paid advertising
Search engine optimization (SEO)
Content marketing
Influencer marketing

Each of these presents a different way to reach your target audience, drive conversions, or build brand awareness, depending on your marketing goals.

You need to determine that for yourself. But before starting an online business, it’s important to assess the time, investment, and resources you’ll need to get it off the ground. While the barrier to entry can be quite low, it’s worth considering your goals and strategies for making it a reality.

However, compared with starting up a traditional brick-and-mortar business, the risks of launching an online business may be reduced due to lower upfront costs such as rent, staff, and materials, among others.

The short answer: yes. While it depends on the type of business you hope to pursue, there are many ways to set up an online business at very little cost. For example, you could offer your services doing freelance work, photography, bookkeeping, or personal training. The primary costs involved include setting up your business website, which can cost as little as $2 to $20 each year with companies such as GoDaddy.

There are a number of digital marketing strategies that online businesses can use, such as content marketing, email marketing, paid advertising, SEO, and influencer marketing. Each of these strategies can be useful, depending on your product and goals.

Starting an online business can be a powerful way to launch a new product or service while reaching a wider audience. With market research, a solid business plan, a strong website, and a digital marketing strategy, you can get started in growing your company effectively. As customers increasingly make decisions virtually, building an online business is vital to any business owner’s success.

Pew Research Center. “ For Shopping, Phones Are Common and Influencers Have Become a Factor—Especially for Young Adults .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

Ogilvy. “ Getting Future Ready with Marketing Transformation ,” Page 15.

GoDaddy. “ How Much Does a Domain Name Cost? Find Out! ”

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Marketing in Business: Strategies and Types Explained 4 of 25
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Best Startup Business Loans for April 2024 17 of 25
Sole Proprietorship: What It Is, Pros and Cons, and Differences From an LLC 18 of 25
Partnership: Definition, How It Works, Taxation, and Types 19 of 25
What Is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
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Starting an Online Business: A Step-by-Step Guide 23 of 25
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How to Start an Online Business Profitably From Home In 90 Days

Darren DeMatas

November 27, 2023

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In addition to receiving commissions generated through affiliate marketing, we are able to fund our independent research and reviews at no extra cost to our readers. Learn more.

If you have ever thought about how to start an online business of your own, now is a great time to finally roll up your sleeves. In the wake of COVID-19, the ecommerce world was flooded with new activity from all sectors. Although growth has slowed since then, there’s still plenty of room in the market.

How To Start An Online Business

Research Business Models
Decide Your Niche
Conduct Competitive Analysis
Define Your Brand And Target Audience
Set Up Business Logistics
Build Your Website and Marketing Automation
Promote Your Business

People can make money online in lots of different ways. They can open an online store, write a blog, or become popular on social media. In this post, we will dive into the different models and guide you step-by-step to launching your own online business.

Why Start An Online Business From Home

Online businesses can be profitable with low startup costs. The ecommerce market is growing, especially due to COVID-19, offering many opportunities.

Some of the richest people in the world got their start with online businesses. With the right business plan and commitment, you can reach customers worldwide .

Types of Online Business Models

Online businesses come in all shapes and sizes. You don’t have to be the next Amazon ecommerce marketplace or Netflix to be successful.

When it comes to online business models there are a few major buckets to consider.

Physical Products: Selling products like t-shirts through online retail
Digital Products : Like courses, ebooks, or software
Media / Publisher: Selling ads, affiliate marketing, or sponsored content
Services : Exchanging time for money by providing services like logo design or marketing

We have hundreds of online business ideas you can start , but I wanted to highlight a few ones in each of those buckets.

Physical Products

An ecommerce store is likely the first thing you think of when it comes to online businesses. Instead of shopping in person, customers make purchases over the internet.

In essence, your website replaces the store. Customers browse and buy your products or services online, and then you ship the order to them.

Online stores offer advantages over brick-and-mortar. Customers anywhere in the world can shop with you regardless of location. Plus, a virtual storefront means lower overhead.

Dropshipping

A dropshipping business is great for its simplicity . To the customer, they operate just like any other ecommerce store. But in actuality, your internet business is just the middleman.

When a customer places an order, you send the order to the drop shipper . The drop shipper fulfills and ships the order to your customer.

Digital Products

Selling digital products online is very low overhead, but it’s highly competitive. If you have unique skills or knowledge, create digital products to monetize your expertise.

If you have experience in graphic design or web development, create and sell online courses. Or, maybe you’re a talented writer who could create and sell ebooks, audiobooks, or other digital content.

The possibilities for digital products are almost endless. All it takes is some creativity and hard work to get started.

Launch An App Or SaaS Startup

In today’s digital era, launching an app can be a viable business online.

With an innovative app idea, you could tap into a potentially huge market. If you have the technical skill to create it, or the resources to hire someone to do it for you, it could be lucrative.

To successfully launch an app, identify a problem or need your target audience has. Then, address it with your app. Invest time and resources into promoting your app to get it noticed. In a crowded marketplace, marketing can make or break you.

Remember, developing an app is only the first step – you still have to market it.

Ebooks or Courses

Have a passion for sharing what you know with others? Create and sell ebooks or online courses. It can be a long-term viable business since you can create content on almost any topic. Ideas include cooking and fitness, entrepreneurship, and personal development.

For success, pinpoint your target audience. Create content that speaks to their needs and preferences. Spend time building your brand and promoting your products. Use social media, email marketing, and other channels.

Media Publishing Company

You can start a media company with almost no resources other than yourself. Again, a low barrier to entry means tight competition.

Starting a media publishing company involves creating content for your target audience. You can create written, video, or audio content. Then, you monetize it with advertising or other methods.

This business model is highly scalable. Healthline is a publishing company that generates $100M+ per year.

To compete in this space, focus on consistently producing high-quality engaging content. It will help you build a loyal audience. Learn about online advertising and marketing strategies to maximize revenue potential.

Affiliate Marketing

Affiliate marketing allows you to promote and sell without handling products. Your job is to promote affiliate products and drive traffic to the partner’s website.

You earn a commission when customers use your affiliate link to make a purchase . The company selling the product handles processing and shipping the order. You are responsible for encouraging the sale and directing traffic with referral links.

Blogging is a large and varied category for online businesses. There is a wide range of blogs and many ways to monetize them. For example, some people make blogs as a hobby, while others use them for affiliate programs.

Blogs can make money selling ad space, sponsored posts, or ecommerce. You can even work as a blogger by creating content for other companies’ blogs. Blogging can be great as a part-time job or full-time gig.

Launch A YouTube Channel

What are you passionate about? Create videos about what you love, and build a following of interested viewers. After you build a loyal audience, monetize your channel with:

Advertising
Product sales
Sponsorships

Most full-time YouTubers make $60K per year. But people like Blippi make a ton more. In fact, his net worth is around his total YouTube subscribers.

Become an Instagram Influencer

These days anyone can become an influencer. That’s if you don’t mind being the “face” of your business. I prefer to pass on that. With that said, influencers can make a killing by putting themselves in the spotlight.

Trading hours for money is the basic idea behind selling services. If you have a particular skill set or expertise, you can offer your services online to those who need them. This includes things like:

Social media management
Content creation
Virtual assistance

Use platforms like Fiverr or Upwork to find clients and build your reputation.

Web Design Services

If you have web design skills, leverage them to build websites for others . If you have software development experience, this is a lucrative business opportunity.

Many tools can help non-technical people build websites. But business owners don’t have the time to do it. Beyond websites, you can also create and manage social media accounts.

Marketing Agency

Have a background in marketing? Experience in social media, content marketing, or search engine optimization (SEO)? You can offer your expertise to help other businesses grow. These businesses tend to have a lot of overhead, but you can easily build and sell a marketing agency for seven figures.

Start With a Niche in Mind

Before starting your online business, you have to know what you will be selling . This could be a product, a service, or an idea.

For example, selling a cool t-shirt design differs from selling a website-building service. Once you know what you want to focus on (this can be many things), you can start developing your strategy.

Some questions you will want to ask yourself are:

What am I selling?
Do I need or want a website?
What will my company (and website) name be?
Will I have stock to manage?
Do I need to hire anyone?

What you are selling will help answer most of these questions. And you’ll learn things along the way. But first, what are you selling, and how will you make money?

Conduct Competitive Research

Whatever it is you are selling, you will have competition. Before you get started, do some competitive analysis of the market as a whole.

Begin With Basic Keyword Research On Google

Start with basic keyword research on Google. Identify keywords that are relevant to what you’re selling and see who shows up in the search results. Note their website, pricing, products or services, and any unique selling propositions.

Next, delve deeper into their online presence. Visit their website, social media profiles, and any other online platforms they use. Pay attention to:

The design and user experience of their website

How they engage with their audience on social media

Any content they create

This will help you identify what’s trending and the competitive discovery process.

Conducting product research is important. Entering a highly competitive industry with established competitors makes a difficult battle. When it’s hard to carve out your market share, you stifle growth before you even start.

What is the competition doing well? Where could they make improvements? Exploit the areas of improvement for your own benefit.

Your market research could show competitors pricing products too high. It could show poor customer service. Ensuring you do better may determine product viability . If you cannot, it will point you to another business niche.

Define Your Brand and Target Audience

Think about what you want your brand to communities. Beyond the name, consider your color scheme, logo, and mission statement.

You might have an idea or starting point for defining your brand and company image, but you’re not stuck with it. Amazon grew from an online bookseller to a global marketplace. Your brand will likely evolve and settle into its niche.

Define Your Target Audience

What you are selling will also determine who your target audience is . Are you selling to other businesses or customers? Who are they? What social media platforms do they use?

Define and understand your target audience to shape your business and marketing strategy. Your target market will likely change over time. You may notice a difference between your ideal and actual customers, too.

Analytics tools help identify your audience and track what works and what doesn’t. Your customer demographics determine how you run your business (and make money.) It also impacts your social media marketing.

Trademark Your Brand Name

Once you have defined your brand name and image, it is important to protect them legally. Register a trademark for your brand name to ensure no one else can use it or create confusion in the market.

This important step helps establish your business and protects your intellectual property. It’s helpful to consult with an attorney to navigate the process. This ensures you don’t miss anything when securing your trademark,

Create Your Business

Creating your online presence isn’t enough to start your business. You must officially register your company . You can find original and distinctive names for your business with the use of a business name generator .Generally, it’s okay to start working and make a few sales. But you’ll eventually need to make things official.

Take all Necessary Legal Steps

You will need to address some legal aspects when creating your company . A licensed and registered business provides personal legal protection.

First, make sure you choose the right business structure. Depending on your location, products, and services, you may need a business permit. You may also need a federal business license. In most cases, you will need a federal business license .

Here are the main legal hoops you will need to jump through:

Register Your Business

Don’t let the idea of registering a business scare you. It’s paperwork and paying fees.

You can expect to:

Register your new business name and optional Doing Business As (DBA)
Choose your business’s legal structure: limited liability company ( LLC ), partnership, etc.
A Federal Tax ID (or EIN)
Other licenses and permits

Opting for a sole proprietorship allows you to skip many steps. That’s why many people getting started take this route. However, this doesn’t legally separate you from your business. If something goes wrong, you put your personal assets at risk.

If you’re confident in your business, save time and register your business at the start. A DBA and Federal Tax ID can also provide other perks.

Get Tax IDs

After getting your federal tax ID and business license, get your state and local tax IDs. You may have more paperwork for taxes and permits.

Get All Necessary Licenses

Certain types of businesses have licensing requirements . Common business licenses you may encounter include:

Federal business license
Sales tax license
Home occupation permit
Specific industry licensing
Permits for regulated products

Your needs depend on your business and the products or services you’ll sell. Your local government or the Small Business Administration can help you.

Remember that sole proprietorship can avoid a lot of these requirements.

You must abide by all regulations where you do business. This includes across state lines or international borders.

Open a Business Bank Account

A separate business bank account is crucial. It simplifies your accounting to keep your business revenue separate from personal income. You need a registered business tax ID to open a business checking account.

As a sole proprietor, you can still open a separate bank account to manage personal and company funds.

Choose a Payment Gateway

Whether you sell B2B or B2C, you need a system for handling payments. Popular ecommerce tools integrate with third-party services so you can collect customer payments.

You must connect your payment gateway to your business account to accept payments. Your location and the ecommerce tools you use determine available payment gateway options.

Set up Taxes

As with any business, you must track your earnings and pay business taxes. Consider hiring an accountant to help you get started if you can afford one. Keep clear and accurate records to ensure you’re ready for tax time.

Build Your Website

Your website serves as your storefront and a direct representation of your company. Building an effective and attractive website is essential for a successful online business. Luckily, there are tools you can use to build a website without technical skill.

Choose the Website Platform

Thanks to many different ecommerce platforms , it’s easy to start an online business. If you’ve got general computer skills, you can build an ecommerce website yourself.

Popular codeless ecommerce platforms include:

There are others, though these make up the vast majority of websites that aren’t coded from scratch. In fact, WordPress powers roughly 40% of all websites on the internet!

The beauty of WordPress is it is free, open-source software . Developers can create custom plugins, so no matter what feature you need, you can find it. This makes it easy to build your website without technical knowledge.

With its popularity, you can find step-by-step guides for anything you may need.

Shopify is an easier website builder for creating a basic ecommerce store, though it will require a monthly fee. It uses simple templates for creating product pages to sell your goods online. This is a popular option among small business owners.

WordPress may be free, but there are ongoing expenses , including:

Domain name
Web hosting plan
Premium plugins

Find a balance between cost and service when you choose an ecommerce platform.

If you are selling digital products, consider using an online course platform.

If you’re not ready to build a website, use marketplaces like Amazon, eBay, or Etsy to sell your goods. The downside of this business plan is marketplace fees, which can eat into your profits.

Set Up Marketing Automation

Once you have your ecommerce platform set up, it’s time to start thinking about how to market your business. One of the most effective ways to do this is through marketing automation.

Marketing automation refers to software that automates repetitive tasks. This can include email marketing, social media posting, and advertising campaigns. This can save you a lot of time and effort while still achieving great results.

To start using marketing automation, create a customer database. Collect customer information through your website or social media accounts. Use the data to segment customers into different groups. From there, send them targeted messaging.

Email Marketing

Email marketing is one of the most important tools in your marketing arsenal. With it, you can reach customers directly in their inboxes. When done properly, it increases brand awareness and sales.

To start, build an email list. Offer something of value, such as a free book, discount code, or webinar. Subscribers get access to your offering in exchange for their email addresses.

After building your list, use an email marketing platform such as Mailchimp or Constant Contact to create and send emails.

Personalize and offer value to your subscribers with each email you send. Segment your list based on consumer behavior and interests to boost engagement.

Landing Pages

A landing page is a standalone page designed to convert visitors into customers or leads. Effective landing pages have:

Clear and concise messaging
A strong call-to-action
A form for visitors to fill out to become a lead or make a purchase

When creating your landing page, keep in mind your target audience and what will appeal to them. Use eye-catching visuals and persuasive copy to convince visitors to take action. Tools like Unbounce or LeadPages make it easy to create landing pages without coding knowledge.

Funnel Set Up

To maximize your online business success, it’s important to set up a sales funnel. A sales funnel is a step-by-step process that guides potential customers toward buying.

Typically, it starts with the awareness stage. This is where visitors discover your brand. From there, you’ll move them to the interest and consideration stages. Here, they’ll learn more about your products or services. The end goal is to move them to the decision stage, where they make the decision to purchase.

Setting up your sales funnel involves:

Identifying key steps customers take before they buy
Creating content and offers to guide them through each stage

For example, you can offer a free trial or consultation.

Market Your Website

Marketing is crucial to help your business grow. To effectively market your online business, understand your target audience. Once you know who your ideal customer is, you can use various strategies to reach them.

Content Marketing and SEO

Using content marketing and SEO can attract potential customers and improve your search rankings. Creating high-quality, relevant content using keywords related to your niche can organic visibility.

Start by identifying topics and keywords relevant to your business. Then, create content around those phrases. You’re not limited to blog posts – you can also create infographics , videos, and more.

Optimize the content with proper headings and meta descriptions to improve ranking potential.

Facebook and Instagram Ads

To build a social media following and increase brand awareness, run ads. Facebook and Instagram make it easy to create targeted ads based on:

Demographics

To get started, set up a Facebook Business Manager account and connect it to your website. Then, create your ad campaign with an objective that aligns with your business goals. You can choose from options such as brand awareness, website traffic, and conversions.

Create visually appealing graphics and compelling ad copy. Everything should speak directly to your target audience. Use A/B testing to refine your ads over time and achieve a return on ad spend.

Influencer Marketing and PR

Find influencers who have a following in your niche. Reach out about collaborations on content or promotions to tap into their audience.

Use PR tactics such as press releases and media outreach to gain exposure for your business. Focus on relevant journalists and publications because they’re more likely to feature your brand.

Building relationships with influencers and journalists takes time and effort. Don’t expect immediate results. With consistent outreach and quality content, you can establish yourself as an authority.

Retargeting

Retargeting involves showing ads to users who have already interacted with your brand. It reminds them of what they’ve viewed and encourages them to complete the purchase.

To set up retargeting, install a tracking pixel on your website. Then, you’ll create ads targeted at those who have interacted with your site. You can use platforms like Google AdWords or Facebook Ads to create and manage your retargeting campaigns.

Conversion Rate Optimization (CRO)

It’s not enough to drive traffic to your website. For success, that traffic needs to convert to customers. CRO is strategically editing your website design and content to increase conversions.

To leverage CRO, analyze your website data using tools such as Google Analytics. Find pages with high bounce rates or low conversion rates. Make adjustments to improve the user experience. For example, simplify navigation or make your calls-to-action clearer.

Use split testing to identify the changes that are most effective.

Successful Online Businesses You Can Learn From

While every online business is different, we can learn from those who paved the way. Here are some strong ecommerce examples :

We’ve already mentioned Amazon a few times, with good reason.

Why? Because Amazon is the be-all and end-all of ecommerce business . It started as a small operation selling used books out of a garage. It grew to control more than a third of all ecommerce in the United States. You can’t ignore Amazon.

Amazon followed many of the tips we’ve covered in this article. (You could argue that they wrote the book on successful online business).

But Amazon started with a focus on one product category: Books. Its target market was people who wanted to save money and enjoy the convenience of delivery.

They embraced their success and continued to grow the brand around those strengths. They expanded into other product categories and now offer countless products and services.

With them, we learn how to focus on our strengths and look for growth opportunities.

Etsy is another good example of a simple idea that turned into a huge success. Etsy started as a small online business that focused on the sale of homemade goods. This differed from marketplaces like Amazon, which sold mass-produced items.

Etsy stayed true to its concept. It is a popular platform for artists and crafters who don’t want to compete with factory-made goods. Their business model was a success, offering niche products you can’t find anywhere else.

EBay revolutionized ecommerce with its new business plan of online auctions. Rather than selling products, eBay built a business around allowing others to sell.

eBay inspired many other ecommerce websites to follow a similar approach.

Each of these ultra-popular websites started as a small ecommerce business before making it big. We can apply the same strategies to our own online business plans.

Which business is best for online?

Some business concepts that benefit from being online are:

Affiliate marketing
Digital product sales
Dropshipping (and Fulfillment by Amazon companies)
Training and digital courses

What do these business models all have in common? You can start them with little to no money and with minimal overhead.

Basic ecommerce companies can be successful. But there is greater risk with physical inventory. You must rent warehouse space, buy the inventory, and pay other business expenses.

With the above examples, all you need to invest is your time, and you can start earning money online!

What is the most profitable item to sell online?

You can sell most things online, but digital goods have unique profitability. Unlike physical goods, you can create digital goods like games or online courses once and sell them forever. The same goes for ebooks, videos, and other digital content.

You must print, bind, sell, and ship a physical book. You can sell and download an ebook with no physical labor involved. This is what makes digital goods so profitable for online businesses.

What online services are in demand?

In-demand online services are those that help others get online. In the wake of the pandemic, companies rushed to build their online presence.

Service-based businesses related to website design and digital marketing are in demand. An example is email marketing software, especially email marketing automation.

What are the most successful small online businesses?

You can sell almost anything online, but fashion and beauty are among the most successful. Fashion was the largest ecommerce segment in 2022 . Countless boutiques , brands, and content creators are getting their slice of the pie.

Start Creating Your Online Business

Now you are ready to start planning your own online business endeavors. Chances are it won’t be quick, and it won’t be easy. With a bit of luck and persistence, you can launch a successful online business.

Before, it took specialized knowledge and big risks to make money online. N ow abundant opportunities for those looking to break into ecommerce . No matter your strengths or skill level, there is a solution for how to start an online business.

With a little bit of elbow grease, you can turn your side hustle into a profitable business.

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Home > Business > Business Startup

The Complete Guide To Starting An Online Business

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Starting a business is sometimes scary and almost always challenging. It might seem overwhelming at first, but that is completely normal. And we owe you a massive congratulations. You have an idea good enough to share with the world, and that’s a big deal! You’ve officially gone further than most hopeful entrepreneurs. You’ve made the decision to get online and figure out how to turn this idea into a money-making business. So, let’s talk logistics.

When I first started my own business, I panicked over taxes, finances, and marketing. I felt so behind that first year because I didn’t have anything figured out before launching my site. Then, when I did launch, I had to check all these boxes while I was knee-deep in the stress of maintaining my business. I had no idea which holes I hadn’t filled until they imploded and quadrupled my stress, since I had to put out fires that were completely preventable.

To help you avoid the same mistakes I did when I launched my business, we've put together this guide to starting your small business online. Read through our eleven steps below to officially start your business off on the right track.

How to Launch a Small Online Business

Vet your idea
Identify your audience
Choose your business name
Write your business plan
Sort out your branding
Build your website prototype
Test and validate your product
Nail down your processes for delivering your product
Make it legal
Deal with your finances
Launch your business

1. Vet your idea

First things first: you gotta vet your idea.

Before jumping in head first, you need to be 100% confident (or at least 90%) confident that your idea is worth it—worth the time, sacrifice, stress, anxiety, frustration, and ego hits.

It’s worth remembering that no matter what type of business you own (or how good your idea is), you’ll definitely experience ups and downs within the first 10 years. Some of these ups will be sky-high, and some of these downs will be depressingly low.

But if you believe in your idea enough, you will persevere—you can absolutely come out the other side with an awesome business, which is an amazing way to spend your time and earn a living. On the other hand, if you’re shaky about your plans, this will be a tricky first decade for you. To make sure you’re on the right track, let’s talk about how to vet an idea:

While vetting your business idea, ask yourself these five questions:

How big is your potential audience? Are enough people interested in this type of product or service that you have a stable audience for sales?
Is your product or service something customers buy once and move on? Or is there a chance for building a repeat customer base?
Is your business idea going to be a passing trend like low-rise jeans, or does it have a long-term possibility like pencils?
What is your competition? For instance, if you are setting up a fry bread cafe, are there other fry bread cafes in the area? If there are, what unique element will set your business apart from the competition?
Will your business have any legal issues or limitations? For instance, are you creating something with strict regulations that make it trickier to market? Are you passionate enough about your idea that you’re willing to deal with the ups and downs and chaos of starting a business?

Once you’ve vetted your idea by asking yourself the questions above, getting advice from people you trust, and even speaking with an accountant or business banker about your business’s viability, it’s time to move on to the fun stuff—like choosing a name for your budding business.

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2. Identify your audience (or your target market)

Arguably, the most ignored aspect of building a business is identifying a specific audience. A lot of fresh entrepreneurs hesitate to hone in on one demographic because they believe their product or service can and should help everyone. Depending on the product, that might be true—but it still creates a watered-down, generic brand that doesn’t catch anyone’s attention of anyone.

Our advice? Don’t fall for the trap of thinking everyone is your audience. There’s no way you can market to everyone and still have a unique brand.

In contrast, if you are clear on who you are selling to, then you will attract people who actually want your product—which means your business is likelier to last.

To take this a little further, remember that the best brands are aspirational. In other words, while you should start with the people who want your product, you should eventually expand into finding people who want to want your product. This means you will inherently cast a wider net than just your target market—but you will not catch much of anyone without a target market. Start there.

If you can really hone in on exactly who your dream customer is, you then know how to market your product to them. A good exercise to do here is to write your dream customer’s profile or buyer persona:

What is your ideal customer’s name? Age? Occupation? Hobbies?
What food do they like? What food do they dislike?
Do they have a family?
How much money do they make, and how much disposable income do they have? What are their hopes and goals?

Now, ask yourself: Does a person like this actually exist? If so, now you know which social media platforms to target, where to buy ad space, and what tone your advertising should take.

Having a hard time answering the questions above? Start by identifying who is not your audience. List the qualities of the person who is not your target audience, and narrow things down from there.

Again, you can have more than one target audience, but you should try to be as specific as possible for each one.

3. Choose your business name

Choosing a business name is where the fun starts. For one thing, your business’s name is the first point of contact between your business and your consumers. It also gives customers the first glimmer of your personality and is the place where your branding will shine.

Remember, your name is also how the legal world will note your business. It also helps Google determine how to position your website when someone searches for your product or similar product on the internet. If your name is confusing, long or even too similar to other business names, you might be positioned at the bottom of the search results page.

In other words, your business’s name is important.

When it comes to business names, entrepreneurs tend to overthink, overthink, and, overthink some more. Sometimes, it feels like the trickiest part of starting a business, so here are some tips for figuring out the perfect name.

Keep it simple and short

Shoot for one to two words. You don’t want the name to be a chore for your customers to remember. Make it as easy as possible for your customers to think only of your service or product when they hear your name. You also want the name to fit neatly on a price tag or as a hashtag (always keep that social media marketing in mind)

For a good example of a short, simple brand name, consider Macintosh computers and Apple products. When someone says the word “apple,” most people now think of the computers before they think of the fruit. It’s a simple name, but with excellent marketing, the company completely co-opted the fruit.

Dare to get personal

Don’t be afraid to think of something quirky, weird, and maybe even a little kooky. For instance, many small online clothing businesses include the name of the owner’s grandmother in the title, or maybe of the owner’s children who inspired the clothing.

Or if something from your hometown (or even a particular food) means something to you, consider including that as part of the name. This type of personality flair makes marketing the founder’s story even clearer (read: makes you more marketable). It’ll also provide an easy framework for storytelling within your marketing plans.

These personal details will also help customers feel a sentimental connection to the brand. Sentimentality is an effective tool for building loyalty.

Be original

Make sure there are not other companies filed under the same name or an adjacent name. You don’t want to confuse your potential customers or investors, and you also don’t want to confuse Google, which might pull up your company’s name and location while filling in product information from a completely unrelated company that happens to share your business’s name.

Search domain names, URLs, and social media handles for your would-be business name. Don’t forget to simply Google the name either. If you are dead set on your chosen name, consider tweaking it a little just to set it apart.

4. Write your business plan

Your business plan is a structured document that gets all your brilliant ideas down on paper. You’ll show it to investors (like angel investors or traditional lenders like banks) to demonstrate that your ideas are worth investing in. While you can modify your business plan from year to year, try to think about it as your business’s foundational document—this is how you design the path to making your dream work.

You can create your business plan as early or late as you want before launching your business, but I highly recommend doing this early because it will reveal any flaws in your idea. The plan itself might feel redundant, but don’t speed through this. Consider it a proposition for the world to take your idea seriously.

Executive Summary

This is your elevator pitch. Simply sum up what your business is, how it will function, and what success you anticipate. It should be brief and to the point.

Company Description

This section should be a detailed description of what problems your company solves. It should also focus on who your company is serving and how you are serving that population.

Market Analysis

Who is your competition? Your investors will want to know you’ve done the research to find out that yours is a good idea, or that there is even a demand for this service or product. Along with showing that there is competition, this section of your business plan should point out what the competitors are doing better than you—and what you plan to do better than your competition.

Management and Organization

What kind of business is this? Is it an LLC, INC or DBA? How big is your business, and what is its structure? Most any business structure is fine—but remember: remember...stay away from pyramid schemes. (We say this mostly because they’re pretty similar to illegal pyramid schemes, but also because they can take advantage of women and marginalized populations.)

Products and Services

What exactly are you selling? List out each product, including each variation of your main product or service, as well as your pricing. Keep this portion of your business plan as clean and organized as possible (a spreadsheet will likely be a useful tool here). You will probably add to this list as you launch your business and continue to grow.

Marketing & Sales

How do you plan to let people know what you are selling? Many business owners use social media, local newspapers, radio ads, billboards, or even a combination of everything. The point is that you need to have a plan.

Another angle to consider is what medium your audience primarily uses. For instance, if you’re focusing on a product that primarily serves older communities, you’ll want to focus on Facebook advertisements. If you’re focused on a younger population, TikTok ads will probably serve you better. Consider how you can use your audience’s preferred same media to get your message across. And what sort of posts or commercials will you create that both fit your brand and speak to your dream consumer?

Funding Requests

Outline your funding requirements. This is where you get specific on how much you need and how each dollar will be spent. It’s also where you explain the lending and investment terms you would like and whether you are looking for debt or equity. The more specific you are, the better. Answer basic questions like how long you’ll need funding and how exactly you’ll use it. Most importantly, be overly detailed and incredibly tedious with this information—investors prefer more information when making a decision about whether or not your business is worth their time and money.

Financial Projections

Because you haven’t launched your business yet, this is where you will keep track of your monthly and/or quarterly projections. Throw in graphs, charts, and anything else that will tell your financial story as easily and quickly as possible. This section can be updated and added upon after you launch, but you should definitely keep track of your financial projects throughout the life of your business. Set routine goals to keep yourself motivated and on track.

Keep your business plan close by and allow it to remain a living document as you grow and learn new things. Even if you never end up presenting it to anyone, it will keep you focused and aware of when things are not lining up for you.

5. Define your brand identity

Last year, I taught a business class to high schoolers., These were Gen Z brilliant students who knew the internet forward and backward. They used the word “branding” casually, but they didn’t quite understand the ins and outs of branding a company. So we did what I like to call “the Starbucks exercise.”

I asked them to get out a piece of paper and write their answers to my questions: If Starbucks were a person, what gender are they? Do they smoke? What age are they? Do they have a family? A partner? Kids? A dog or a cat? What kind of outfit is Starbucks wearing?

The majority of students had the same answers. To them, Starbucks was a white middle class lady who used to smoke cigarettes. She is a straight cis female with a couple of kids and a cat. She is stressed and she wears yoga pants a lot.

These students were all from different homes and all had different relationships with the coffee brand— but they all had the same general understanding of what this brand was. And that’s the power of strong, consistent branding.

If you can create a set understanding of what your company is if it were a person, you are golden. Creating a brand like this means you know exactly who you are marketing to. And having such a specific focus also means that you can attract the right customers. You will know which aspects of your company to negotiate in order to attract your target audience and expand from there.

What gender are they? Do they smoke? What age are they? Do they have a family? A partner? Kids? A dog or a cat? What kind of clothes do they wear? What is their income bracket? What type of music do they listen to?

Another helpful exercise is to try to describe your company with one word. Examples include: sleek, economical, efficient, retro, conscious, powerful, and rejuvenating. Practice this with your own business, and then make branding decisions based on that word.

Now that you have an understanding of what your brand is, consider your unique selling point, words, colors, and logo.

Figure out your unique selling point

What makes your brand different from other brands? Why should people choose your service or product over others? Is there an emotional reason (for instance, you’re a local, naturally sourced brand), a practical reason (maybe you’re more affordable or offer higher quality products), or a combination of both? Frankly, if there is an emotional pull, run with that—people love an emotional connection to the product they’re buying.

To put it simply, think about your origin story and what YOU bring to the table. Then go from there.

Colors are important! They should work together to make a good story. They should not be in a contest with each other. If you look at your branding and feel confused or disturbed, it means that the colors are not doing you favors.

Not sure what we mean by that? Well, there is an area of study called color psychology. This is how our brain responds to certain colors.

For example, yellow is a trigger for discomfort and red is a trigger for hunger, which is why most fast food places use red and yellow in their branding. These colors are intended to inspire patrons to come and eat a lot (red) and then leave quickly because the yellow is so glaring. Blue is calming which is why most therapy offices paint their walls blue.

Consider what emotions you want your clients to feel and Google which colors best make that happen.

Red - enhances human metabolism, increases respiration rate and raises blood pressure; associated with energy, strength, danger, war, determination, passion, desire, and love -- it attracts more attention than any other color

Green - slows human metabolism and has a calming effect, associated with tranquility and calmness, symbolizes growth, freshness, rebirth, fertility and is associated with nature (all things organic).

Blue - Peaceful, honest, compassionate, authentic and sympathetic

Brown - reserved, dependable and resilient

Yellow - joyful, happy, intellectual, a lot of energy, stimulates mental activity and muscle energy, can bring feelings of anxiousness when overused, and is definitely an attention grabber. Commonly used to mean loyalty and in other settings cowardice.

Pink - calming and vulnerable. Signifies gentleness and youthful innocence, very sweet and tender feelings

Purple - power, nobility, luxury and ambition, wealth and extravagance. Reminds mystery, creativity, independence and magic

White - signifies safety and cleanliness. Reminds of purity, light, faith, innocence and goodness

Black - power, death, formality, fear of the unknown, often feels negative and reminds of grief

Color theory also tells you which color combinations are most pleasing to our eyes. A fun resource is the Adobe color wheel . This site allows you to jump in and look at different combinations of colors that work within these theories of which colors are most compatible.

This is where you get to tell your story. Use words that fit the tones of the colors you choose (or vice versa). Words like sleek, organic, fresh, and honest all feel good with greens, light pinks, and whites. Words like powerful, strong, and forthright match the tones of reds and blacks. Consider which words best describe the mood you are trying to convey.

Unless you have a design background and are good with graphic design, consider hiring someone else to design your logo. Before hiring someone, your job is simply to figure out a basic idea of what you want. This will require you to look at different branding, websites, and fonts to think about what really resonates with you.

When I was trying to sort out my own branding, I came across an Instagram profile that posted old Russian products with pre-1990 branding. My family comes from Eastern Europe and many of my family members speak Slavic languages, so seeing these unique logos and fonts felt familiar to me. I decided to hire a designer who created a font that could have come straight from old cheese cans from Moscow 1955, something with a Slavic touch and retro vibe. You never know where you will find inspiration.

Old branding. Look at old magazines or old boxes and just study those fonts and how the logos were made.
Notice t-shirts.
Whenever you find yourself in a waiting room or watching tv, jump on Pinterest and create different boards of ideas or tones.
Start following different designers on social media. A popular one is Aaron Draplin, and from him you should be able to find an entire community that posts different design and logo ideas. This should inspire you as you figure out what you want.
Album covers. Go to a record store and sort through different old school album covers. You will see some of the best branding there has ever been.
Instagram, Instagram, Instagram. We love to hate it, but if you tap into the design community, you will be blown away by the options.
The grocery store. Andy Warhol found art in advertising and sold his Campbell’s Tomato Soup renderings for millions of dollars. He described the soup can as brilliant art and branding. Go to the grocery store, pretend to be Andy Warhol, and look for art in the mundane.

6. Build your website

Whether you’re offering a newsletter or a physical product, you need to start creating a site so you can fund your business and find customers.

To start creating your ideal website, start by asking a few key questions. What is the purpose of your site? Are you selling or just giving information? Does your site include a call to action like signing up for a newsletter or service? Or do you need an e-commerce site to collect credit card information and shipping?

A ton of different website building platforms are built for small online business owners like you. With services like Wix , Squarespace , and Weebly , you can create a site and keep it dormant before launching for testing.

Not sure how to build a website from the ground up? Find other websites that are doing similar things to you and follow their lead. It is okay to gain inspiration from multiple sources. (Just don’t copy and paste an entire site. Plagiarism will not go well for you.)

Start simple. You don’t have to have a perfect product right away. Create a basic website, then have a friend go through it and tell you what they would love to see or use.

As you start creating your site, Just make sure you have these basics:

A site map
High-quality images
A call to action on each page (“sign up for our email,” “click to purchase,” etc.)
A contact page

You’ll also want to use proper SEO ( search engine optimization ) for any blogs and sites you create. If you’re not sure what that means, no worries—most website builders include some sort of SEO recommendations that will help optimize your content.

SEO is an acronym for “search engine optimization.” It is the method in attracting a higher quality and quantity of traffic to a site.

The goal of SEO is to make it easier for Google to recognize what your site pages are about and then help users find the best solutions to their needs.

Figure out where your site stands in terms of Google rankings. Use the Google toolbar or other monitoring tools (there are a lot).
Use keywords or phrases organically throughout your pages. Use keywords that people might be including in their searches. Feel free to Google your topic and see what other people are posting or searching.
Include these search terms in your URLs.
Attach descriptors to your images.
Use internal links to guide users to another page on your site.
Link to other sites or the site you are sourcing information from.
Make sure that your website is updated regularly and actually has high-quality information.

7. Test and validate your product

Test your product.

Before launching and advertising, you must test your product and see if it is actually meeting the needs it is setting out to meet. You can do this in the form of focus groups, which means sending the product to a few choice people who you know will be honest about their impressions. Then you can start sending and giving to others. Find a bigger audience by inviting people from your focus group to pass your product along to their friends and ask for their feedback as well.

Validate your product

Before really going crazy with scaling and production, you must validate the product . This means setting up pre-orders and selling in person (read: starting off small before you buy 6.000 scrunchy leopard print bracelets that will just sit in your garage). Produce a few items and try to sell them. If you can’t move those few, there is no way you will move 6,000.

Validating your product tests whether your idea actually does have legs and whether you are the right person to move it forward. This can also be done by setting up pre-orders, launching a crowdfunding campaign, or selling person to person. Each of these tactics can act as a thermostat of where you are in meeting a need or want of your dream customer.

If your product is not a tangible thing and is content– or service-based, start promoting it through advertising. Consider offering a free service to get feedback before you start to sell. See what happens. Once again, if no one bites, it’s time to find another idea for your small business.

8. Nail down your processes for delivering your product

By now, you should have a good sense of your business’s organization, branding, and purpose. Now, it’s time to dig deeper into the nitty gritty part of building a company.

Let’s start by asking a few questions.

If you are using an online store to sell a product, ask yourself:

Where are you going to store your inventory?
Would you rather mail each product yourself, or should you outsource via dropshipping ?
Who is making your product?
Are ethics and sustainability a part of your brand?
Do you need design help and how long term do you need the help to be?

If you are selling a service, ask yourself:

Exactly what service are you offering?
What are your price points?
What size of jobs are you accepting?
What are you willing to negotiate with clients?

Whether you’re selling a product or service, we recommend getting support that can help you save time and money as you hammer out the logistics of running your business. Here are some of the most crucial tools to consider:

Accounting software. We live in a wonderful time when there are trillions of options for different accounting apps. Different programs are tailored to different needs and include different price points as you grow. Check out our list of the best accounting software for small businesses .
Email marketing. Email marketing benefits your SEO and builds trust with your customers—potential, past, and current. This is the one chance you have to speak directly with the people you are hoping to impact with your service. This is where you can ask them questions and remind them that you exist.
Project management. If you are anything like me, you tend to procrastinate and get frazzled when things get off track. Just like accounting apps and software, finding the right project management tool can make a huge difference. We all work differently, so find the tool that makes the most sense for your brain and also your company’s needs.

9. Make it legal

Research licensing and government regulations.

Different states have different laws on what’s legal to sell, where, and how. These regulations can be quite complex, and there may be legal problems if you make a wrong move.

Go ahead and Google your state laws. If you find any regulations that might affect your business, definitely reach out to your county officials and they can guide you. If you feel like your business is in a gray area, consider investing in a lawyer as you set up your business.

Pick a business structure

A business structure is integral both for filing your taxes and your own liability.

10. Get your finances in order

Dealing with finances is usually where first-time entrepreneurs start panicking. They have an awesome idea, but they didn’t major in accounting and have no idea what to do about money .

The first move is to figure out what accounting software you want to use(hopefully you figured that out in step seven).

Next, we need to draw the line between your personal self and your business self. Your business profile needs to stay distinct from your personal finances.

How do you separate the two? Just like how you have a social security number, your business needs its own identification number (this is called an employer identification number , or EIN) and bank account. Not only does this make sure you are not going to get into a jam with the IRS, but setting up a business EIN and bank account helps prove that your business is, well, yours. You will get your business identification number when you register your business with your state.

Next, you need to get a business bank account and credit card . Open an account that will work best for you, whether that is through using a high yield savings account or an account with limited fees. Make sure that you are checking your credit card statement and your bank account weekly so you can stay on top of cash flow.

Go to your bank and speak with someone about opening the right account for your needs. Your business banker will be your best friend—they can offer much better advice on different accounts and their benefits than anyone else.

Be mindful that most of your money will go quickly in the beginning. You will be spending it on building your inventory and trial and error with marketing. If those startup costs are too big for your pocketbook, consider finding angel investors or crowdfunding .

Starting at $0/month, Lili offers a checking account with time-saving tax optimization and accounting features specifically built for entrepreneurs.

11. Launch your business

You’ve done it! You’ve gone through all the major steps to get your business off the ground, and now you’re ready to launch. Publish your website and start getting the word out by leaning into social media and other advertising methods-. Using your brand identity and chosen colors and logo, be liberal in sharing your new project with the world to find customers.

Most importantly, be confident . There will undoubtedly be ups and downs, but remember—you are providing something that people want. You’ve been through vetting and product testing and you know yours is a good idea. Hold onto that while you are weathering these early storms because yes, the initial phases are hard, but you’ve got this!

Phew, you made it to the end—nicely done! Thanks for sticking with us, and best of luck to you with your small business. We know you're going to do great.

How to Start an Online Business in 2023

Starting an online business isn't easy. There are so many important decisions to make. What should you sell ? Who should you sell to? How will you get customers?

If that's not enough, every other week there seems to be a new business trend online. There's chatbots, cryptocurrencies, Facebook ads, Instagram influencers, and many more. What should you pay attention to? What actually matters?

If you want to know how to start an online business in 2023, we've got you covered. In this quick and simple article, we'll take you through how to start a small business online, step-by-step. Consider this as a starting an online business for dummies guide, as we cover everything in plain English and list simple, actionable instructions to help you start.

Start selling online now with Shopify

How to Start a Business Online (From Scratch)

#1: don't start building yet.

When looking to start a business , it can be tempting to jump into action.

So, if you're feeling the urge to build a website, choose a business name, or create a logo , hold off for now.

If you want to start a successful online business, first, you need a strategy. And steps two, three and four of this article will show you how to create your online business strategy.

#2: Choose a Business Model

When learning how to build an online business from scratch, it helps to know about some tried-and-tested online business models.

Here are six types of online businesses to consider:

Affiliate Marketing : Promote other business's products and services online, and receive a commission for each sale you make with this passive income idea .
Freelancing : Provide a service to other individuals and businesses using a skill that you have, such as advertising, writing, designing, or programming.
Coaching and Consulting : Become a coach or a consultant and sell your expertise, advice, and guidance.
Information Products : Package and sell your expertise in ebooks, worksheets, templates, and online courses .
Software as a Service (SaaS) : Create a piece of software or application, and charge users a recurring subscription fee.
Ecommerce : Use a service like Shopify to set up a website and sell physical products online.

Want more online business ideas to help inspire you? Check out our guide, "25 Small Business Ideas to Make Money".

#3: Identify Your Target Market

Next, you need to get clear on your target market. In other words, who are you going to serve?

This step is absolutely vital.

As the marketer Philip Kotler once said , "There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market."

Here's the trick: Make sure you are part of your target audience.

Think about it. If you've been camping your entire life, you'll understand the problems, desires, and language of other campers. As a result, it'd be much easier to sell camping products online.

Plus, your marketing will be more successful because you'll have a better understanding of how to communicate with other campers.

On the other hand, if you've never been camping in your life, you'd probably struggle – a lot – to sell camping products online.

So, when choosing a target audience, ask yourself:

What are my hobbies and interests?
Is there anything that I know a lot about?
What do I spend most of my time thinking, talking, and reading about?

#4: Find a Problem to Solve

When learning how to start an online business, it's important to note one key thing: all businesses solve a problem.

Plumbers fix leaking pipes. Hollywood movies fulfill people's boredom, curiosity, interest, and the need to escape and relax. Clothing brands help people express themselves and feel attractive.

Here's the golden rule: The bigger the problem you can solve – and the better you solve it – the more money people are willing to pay.

For example, take healthcare services. They solve a big problem, which is why almost everyone is willing to spend a lot of money on it.

On the other hand, not many people will pay you to stop their table from wobbling. It's not a big problem, and they don't need help solving it.

Bottom line: If you want to identify how to start an online business, you need to find a good problem to solve.

Here are three examples:

Target market : Fashion-conscious teenage boys
Problem : The fashion-conscious want to stand out from the crowd without spending too much money.
Solution : Create a clothing line that's flamboyant and budget-friendly.

Target market : Marketing managers at multinational software companies.
Problem : Businesses need to drive traffic to their websites.
Solution : Write articles that rank on the first page of Google to drive traffic.
Target market : Working Moms with young children.
Problem : Many moms want to work out regularly, but they don't have much time.
Solution : Create a time-saving fitness program and schedule.

How can you find a problem to solve?

Join Facebook groups and online forums and ask people what they need help with.
Use Google Keyword Planner to find out what people are searching for.
Find successful online businesses and identify the problem they solve, then look for ways to do it better.

#5: Analyze The Competition

Anyone learning how to open an online business shouldn’t sleep on competitor analysis .

Analyzing your competitors helps you stay on the cutting edge of what’s working in your niche, identify successful tactics and new trends, and anticipate shifts in the market. It also helps define your messaging, positioning, and overall business strategy.

So how do you conduct a competitive analysis? Here are some tips: Subscribe to your competitors’ blog

Buy a product they sell
Abandon a product in their shopping cart
Sign up for their newsletter
Follow them on social media

While taking these measures, make sure to document your findings with notes on each approach. You want to be able to find relevant insight when you need it.

By analyzing their customer experience and looking at how they engage people via content, you can identify tactics that your competitors are using to drive sales.

Pro Tip: Consider doing a SWOT analysis to accompany the findings from your research. It’s a blueprint that leans into your competitors’ strengths and weaknesses to define areas of improvement. To learn more about this tactic, check out our guide, “ Everything You Need to Know About SWOT Analysis .”

#6: Cover Your Legal Bases

Any business you start must be properly aligned with the laws and regulations in your region. So make sure to read up on online business legal requirements when starting a new internet business.

Just some of the legal aspects you’ll need to consider include:

Business structure

Register as an LLC or sole proprietor for online business? You can research and decide on your own, but it pays to get input from a tax specialist.

Licenses and permits

Depending on what type of business you start, you may need a license to operate it. This varies depending on where you live, so contact your local state department to find out more.

Tax obligations

Most online business owners are required to pay income tax. Additionally, you might have sales tax obligations if you sell products to consumers in certain countries. So before starting your business, consider speaking to an attorney to learn about the applicable taxes and the list of online business documents you’ll need to file them.

You’ll want to cover these legal elements to avoid trouble down the road. For example, registering your trademark will prevent others from using your brand name, saving you the hassle and cost of rebranding.

#7: Select Your Sourcing Strategy

If you’re interested in starting an online ecommerce business, you’ll need to find reliable and trustworthy sources of inventory.

There are several ways to do this:

Search for product manufacturers on websites like Alibaba or directories like Kompass , Sourcify , and ThomasNet.
Discover dropshipping suppliers on platforms like DSers .

The last option is highly accessible and gives you a chance to start your business without making a huge upfront investment.

With dropshipping, your product supplier ships and fulfills an order only after a customer has made a purchase; they handle the storage and logistics part of the business while you handle marketing and customer support.

Check out this list of the best dropshipping suppliers to find valuable partners you can count on for order fulfillment.

#8: Set Up Your Payment Methods

You’re almost there! Now is the time to decide how your business will accept payments and how you as business owner will receive payouts.

There are several online payment options available to you. The most popular ones include accepting credit cards, PayPal, Apple Pay, and Google Pay.

If you’re planning to use Shopify to start an ecommerce business, you can activate the provider’s integrated payment solution called Shopify Payments . It sets you up to accept all major payment methods and comes with 0% extra transaction fees.

For a service-based web business like freelance writing, be sure to check out Transferwise, Payoneer, Stripe, and 2Checkout.

Regardless of the payment method, you should be able to set your payout schedule. You can choose to receive your money daily, weekly or monthly — depending on your preferences when it comes to cash.

#9: Build Your Sales Platform

Once you've identified your business idea and covered your legal bases it's time to build your platform.

Well, if you plan to start an ecommerce business, build a website with Shopify and then find products to sell with DSers.

If you plan to start freelancing, coaching, or consulting, Shopify has the option of plugging in many popular tools like Digital Downloads to sell digital products online , ReCharge to sell subscriptions online, and SendOwl to sell videos online.

Keep things simple.

At this point, your business is still in the realm of theory. So try not to invest too much money, time, or energy into building a perfect website.

Instead, test your business idea and make sure it works before you invest.

Eric Ries , the author of The Lean Startup, said, "We must learn what customers really want, not what they say they want or what we think they should want."

#10: Choose a Marketing Method

When you’re ready to start promoting your online business, you need to choose a marketing method.

There are many different online marketing methods out there. However, when it comes to learning how to start an online business, some are better than others.

Here are four online marketing methods that you can use to land sales relatively quickly:

Social Media Marketing : Use social media to create and share content, engage with your target audience, and drive traffic to your website to land sales.
Direct Outreach : Reach out to individuals at companies to pitch your services .
Paid Advertising : Advertise on platforms like Facebook , Instagram , Google , and YouTube to increase brand awareness and drive sales.
Influencer marketing : Team up with influencers to promote your products directly to their existing followings.

Summary: How to Start an Online Business?

Wondering how to start an online business in 2023? Here are 10 steps to starting an online business:

Create a good business strategy before you start building things.
Choose an online business model that suits your skills, interests, and preferences.
Identify your target market – and make sure that you are part of it.
Identify a problem that your target audience has, and find a way to help solve it.
Study your competitors to identify opportunities for improvements.
Fulfill the legal requirements, including getting a business license.
Choose a sourcing strategy that streamline your order fulfillment.
Set up your payment gateway and payouts to collect and receive payments.
Build a basic sales platform to test your business idea.
Choose a marketing method and start promoting your business.

Finally, it can take a while to learn how to start an online business successfully. So don’t worry if your first online business doesn’t take off immediately. Many of the most successful entrepreneurs failed multiple times before achieving success.

As the co-founder of Apple, Steve Jobs, once said , “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”

→ Click Here to Launch Your Online Business with Shopify

Bonus: additional resources to help you build and start your online business .

How to Build Your Own Brand From Scratch in 7 Steps
9 Best Shopify Tools for New Entrepreneurs
How to Get Free Media Coverage for Your Business
Decoding Product Life Cycle Stages (And Optimizing For Them)
15 Ways to Increase Social Media Engagement Quickly
What You Need to Know About Pricing Before You Launch
Ecommerce Shipping Solutions: Guide to Ecommerce Delivery
Product Page Tune-Up: 9 Timeless Ways to Increase Conversions
10 Tips on How to Handle Customer Complaints
9 Ways to Earn Customer Trust When You Have Zero Sales

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Frequently Asked Questions

What is a business plan and why is it important.

Initiate with Your Business Concept: Lay the Groundwork: Start by introducing your business idea into Plannit AI's Business Plan Generator. This first step is crucial, as it sets the tone for a tailored, insightful business plan that truly resonates with your vision. Capture the Essence: Our platform is designed to grasp the nuances of your concept, ensuring that the generated plan accurately reflects the core and potential of your business.
Navigate Through the AI-Guided Questionnaire: Tailored Interactive Experience: Plannit AI’s AI-guided questionnaire is your interactive guide through the planning process. It meticulously gathers information about your business's objectives, strategies, and market positioning, ensuring a comprehensive and reflective plan. Intelligent Feedback and Suggestions: As you progress through the questionnaire, benefit from smart prompts and suggestions, ensuring that your plan is not just detailed but also strategically sound and aligned with industry standards.
Generate Your Plan with Advanced AI: Intuitive Plan Creation: With the questionnaire complete, Plannit AI's advanced algorithms intelligently analyze your responses. They then craft a detailed, customizable, and strategically aligned business plan, providing you with a structured, coherent, and actionable format. Benefit from AI-Powered Insights: Plannit AI offers AI-driven insights and suggestions, ensuring your plan is not just a document but a strategic tool equipped with tailored AI prompts and an in-app plan editor. Get inspired by browsing through our sample business plans, a collection of successful strategies across various industries.
Finalize Your Plan with Confidence: Dynamic Adaptation and Refinement: Plannit AI recognizes that a business plan is a living document. Our platform allows for continuous adaptation and refinement, ensuring your strategy remains agile, relevant, and aligned with your evolving business goals. Professional Presentation and Sharing: Once your plan meets your standards, utilize Plannit AI's export features to present your plan professionally. Choose between various formats for exporting your business plan, ready to impress stakeholders, attract investors, or guide your team. Review and Adapt: Ensure your business plan is a living document, ready to evolve with your growing business. Plannit AI's dynamic platform allows you to adapt your strategy as new opportunities or challenges arise.

How to Write a Business Plan?

Roadmap for Success: At its core, a business plan acts as a strategic guide, providing detailed steps on how your business will achieve its objectives. It helps you navigate the startup phase, manage growth effectively, and tackle unforeseen challenges with a well-thought-out strategy.
Securing Funding: For startups and businesses looking to expand, a business plan is crucial for securing loans or attracting investors. It demonstrates to potential financial backers that your business has a clear vision, a solid strategy for profitability, and a plan for delivering returns on their investment.
Informed Decision-Making: A well-prepared business plan offers valuable insights into your market, competition, and potential challenges. This information is vital for making informed decisions, from day-to-day operations to long-term strategic shifts.
Market Analysis and Strategy: It allows you to conduct an in-depth analysis of your target market, understand customer needs, and position your product or service effectively. The marketing strategy outlined in your business plan helps in identifying the best channels and tactics to reach your audience and achieve market penetration.
Financial Planning: One of the most critical components of a business plan is the financial forecast. It outlines your funding requirements, expected revenue, profit margins, and cash flow projections. This section is essential for budgeting, financial management, and ensuring the financial viability of your business.
Goal Setting and Performance Measurement: A business plan sets clear, measurable goals and objectives. It provides a framework for monitoring performance, measuring success, and making necessary adjustments to stay on track.

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Aspiring Entrepreneurs: If you're at the idea stage, looking to transform your vision into a viable business, Plannit AI offers the tools and guidance to bring your concept to life. Our platform helps you articulate your business idea, define your target market, and develop a solid plan to turn your dream into reality.
Students and Educators: For students delving into the intricacies of business planning and educators teaching the fundamentals of entrepreneurship, Plannit AI serves as an invaluable resource. It provides a practical, hands-on tool for learning and teaching how to create detailed business plans, analyze markets, and understand financials in a real-world context.
Startup Founders: In the dynamic startup environment, Plannit AI is the ideal partner for founders looking to pivot quickly, secure funding, or understand their competitive landscape. With our AI-driven insights and market analysis tools, startups can make informed decisions and adapt their strategies to thrive in competitive markets.
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Anyone with a Business Idea: Ultimately, Plannit AI is for anyone with a business idea, regardless of industry, experience, or stage of business development. Our mission is to democratize business planning, making it accessible, understandable, and actionable for everyone.

Why is Plannit AI the best choice for an AI business planning software?

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Extensive Educational Resources: Our Education Center is packed with articles, guides, and sample plans to bolster your planning process. It's designed to arm you with the knowledge to navigate the complexities of your industry confidently.
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Customer Success Stories: Our users' achievements are a testament to Plannit AI's effectiveness. These success stories illustrate how diverse businesses have utilized our platform for strategic planning and growth.
Tailored Business Plan Creation: Our platform stands out with its tailored approach, featuring customizable templates that directly cater to your business type and industry, making plan creation straightforward and relevant.

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Content Generation:: ChatGPT helps draft various sections of a business plan, from executive summaries to marketing strategies, by providing structured and coherent text based on the prompts given.
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How to Build a Detailed Business Plan That Stands Out [Free Template]

Updated: March 29, 2022

Published: March 11, 2022

While starting a company may seem easier now than ever before, entrepreneurs have an uphill battle from the moment they start a business. And without a clear, actionable business plan for selling, marketing, finances, and operations, you're almost destined to face significant challenges.

Entrepreneur builds his business plan template

This is why crafting a business plan is an essential step in the entrepreneurial process.

In this post, we'll walk you through the process of filling out your business plan template, like this free, editable version :

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Download a free, editable one-page business plan template.

We know that when looking at a blank page on a laptop screen, the idea of writing your business plan can seem impossible. However, it's a mandatory step to take if you want to turn your business dreams into a reality.

That's why we've crafted a business plan template for you to download and use to build your new company. You can download it here for free . It contains prompts for all of the essential parts of a business plan, all of which are elaborated on, below.

This way, you'll be able to show them how organized and well-thought-out your business idea is, and provide them with answers to whatever questions they may have.

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Building a Successful Business Plan

In the next section, we'll cover the components of a business plan , such as an executive summary and company description. But before we get to that, let's talk about key elements that should serve as building blocks for your plan.

For some entrepreneurs, the thought of writing a business plan sounds like a chore — a necessary means to an end. But that's a bad take.

A solid business plan is a blueprint for success . It's key to securing financing, presenting your business, outlining your financial projections, and turning that nugget of a business idea into a reality.

At the core, your business plan should answer two questions: why your business and why now?

Investors want to know why your business is entering the market, i.e. what problem it's solving and how it's different from what's currently out there. They also want to know why now is the right time for your type of product or service.

At a minimum, your plan should:

Be more realistic than idealistic: Too often, business plans focus too much on how things could be instead of how they are. While having a vision is important, your plan needs to be rooted in research and data.
Legitimize your business idea : If an idea fails on paper, it's a signal to go back to the drawing board. In doing so, you avoid losing precious time or money chasing an unrealistic idea.
Position your business for funding: To get your business off the ground, chances are you'll need financial backing. Even with a solid business idea, investors, lenders, and banks still need convincing. An effective business plan will outline how much money you need, where it's going, what targets you will hit, and how you plan to repay any debts.
Lay the foundation: Investors focus on risk – if anything looks shaky, it could be a dealbreaker. Ideally, your business plan will lay down the foundation for how you'll operate your business — from operational needs to financial projections and goals.
Communicate your needs: It's nearly impossible to communicate your needs if you don't know what they are first. Of course, a business’ needs are always changing — but your plan should give you a well-rounded view of how your business will work in the short and long term.

So back to the question of why and why now – consider three things:

Your industry – How does your product or service fit within your industry? Are you targeting a specific niche? Where do you see the industry going in the next five to 10 years?
Your target audience – Who are you targeting? What challenges are they facing? How will your product or service help them in their daily lives?
Your unique selling proposition (USP) – What sets you apart from your competitors? Is it your product/service features? Your company values? Price?

Once you know the answers to these questions, you'll be equipped to answer the question: why your business and why now.

How to Build a Business Plan

Executive Summary
Company and Business Description
Product and Services Line
Market Analysis
Marketing Plan
Legal Notes
Financial Considerations

Featured Resource: Free Business Plan Template

1. cover page.

Your business plan should be prefaced with an eye-catching cover page. This means including a high-resolution image of your company logo, followed by your company's name, address, and phone number.

Since this business plan will likely change hands and be seen by multiple investors, you should also provide your own name, role in the business, and email address on the cover page.

At the bottom of this page, you can also add a confidentiality statement to protect against the disclosure of your business details.

The statement can read as follows: " This document contains confidential and proprietary information created by [your company name]. When receiving this document, you agree to keep its content confidential and may only reproduce and/or share it with express written permission of [your company name] ."

Remember to keep your cover page simple and concise — and save the important details for other sections.

Why it matters: First impressions are everything, and a clean cover page is the first step in the right direction.

Example of a Cover Page

2. Executive Summary

The executive summary of your business plan provides a one- to two-page overview of your business and highlights the most crucial pieces of your plan, such as your short-term and long-term goals.

The executive summary is essentially a boiled-down version of your entire business plan, so remember to keep this section to the point and filled only with essential information.

Typically, this brief section includes:

A mission statement.
The company's history and leadership model.
An overview of competitive advantage(s).
Financial projections.
Company goals.
An ask from potential investors.

Why it matters: The executive summary is known as the make-or-break section of a business plan. It influences whether investors turn the page or not — so effectively summarizing your business and the problem it hopes to solve is a must.

Think of the Summary as a written elevator pitch (with more detail). While your business plan provides the nitty-gritty details, your Summary describes — in a compelling but matter-of-fact language — the highlights of your plan. If it's too vague, complicated, or fuzzy, you may need to scrap it and start again.

Example of an Executive Summary Introduction

"The future looks bright for North Side Chicago, particularly the Rock Hill Neighborhood. A number of high-end commercial and residential developments are well on their way, along with two new condo developments in nearby neighborhoods.

While the completion of these developments will increase the population within the neighborhood and stimulate the economy, the area lacks an upscale restaurant where residents and visitors can enjoy fine food and drink. Jay Street Lounge and Restaurant will provide such a place."

3. Company & Business Description

In this section, provide a more thorough description of what your company is and why it exists.

Business Plan Template: Business Description

The bulk of the writing in this section should be about your company's purpose – covering what the business will be selling, identifying the target market, and laying out a path to success.

In this portion of your business plan, you can also elaborate on your company's:

Mission statement
Core values
Team and organizational structure

Why it matters: Investors look for great structures and teams in addition to great ideas. This section gives an overview of your businesses' ethos. It's the perfect opportunity to set your business apart from the competition — such as your team's expertise, your unique work culture, and your competitive advantage.

Example of a Values/Mission Statement

"Jay Street Lounge and Restaurant will be the go-to place for people to get a drink or bite in an elegant, upscale atmosphere. The mission is to be North Side's leading restaurant, with the best tasting food and the highest quality service."

3. Product & Services Line

Here's where you'll cover the makeup of your business's product and/or services line. You should provide each product or service's name, its purpose, and a description of how it works (if appropriate). If you own any patents, copyrights, or trademarks, it's essential to include this info too.

Next, add some color to your sales strategy by outlining your pricing model and mark-up amounts.

If you're selling tangible products, you should also explain production and costs, and how you expect these factors to change as you scale.

Why it matters: This section contains the real meat of your business plan. It sets the stage for the problem you hope to solve, your solution, and how your said solution fits in the market.

There's no one-size-fits-all formula for this section. For instance, one plan may delve into its ability to market in a more cost-effective way than the competition, whereas another plan focuses on its key products and their unique features and benefits.

Regardless of your angle, it's critical to convey how your offerings will differ from the competition.

Example of a Product/Service Offering

"The menu at Jay Street Lounge and Restaurant will focus on Moroccan cuisine. The stars of the menu (our specialties) are the Moroccan dishes, such as eggplant zaalouk, seafood bastilla, tagine, and chickpea stew. For those who enjoy American dishes, there will also be a variety of options, from burger sliders and flatbread pizza to grilled steak and salads.

The food at Jay Street will have premium pricing to match its upscale atmosphere. During the summer months, the restaurant will have extra seating on the patio where clients can enjoy a special summer menu. We will be open on all days of the week."

4. Market Analysis

It helps to reference your market research documentation in this section, like a Porter's Five Forces Analysis or a SWOT Analysis ( templates for those are available here ). You can also include them in your appendix.

If your company already has buyer personas, you should include them here as well. If not, you can create them right now using the Make My Persona Tool .

Why it matters: Having an awesome product is, well, awesome — but it isn't enough. Just as important, there must be a market for it.

This section allows you to dig deeper into your market, which segments you want to target, and why. The "why" here is important, since targeting the right segment is critical for the success and growth of your business.

It's easy to get lost (or overwhelmed) in a sea of endless data. For your business plan, narrow your focus by answering the following questions:

What is my market? In other words, who are my customers?
What segments of the market do I want to target?
What's the size of my target market?
Is my market likely to grow?
How can I increase my market share over time?

Example of a Market Analysis

"Jay Street Lounge and Restaurant will target locals who live and work within the Rock Hill Neighborhood and the greater North Side Chicago area. We will also target the tourists who flock to the many tourist attractions and colleges on the North Side.

We will specifically focus on young to middle-aged adults with an income of $40,000 to $80,000 who are looking for an upscale experience. The general demographics of our target market are women between 20 to 50 years old.

A unique and varied Moroccan-American menu, along with our unique upscale atmosphere, differentiates us from competitors in the area. Jay Street will also set itself apart through its commitment to high-quality food, service, design, and atmosphere."

5. Marketing Plan

Unlike the market analysis section, your marketing plan section should be an explanation of the tactical approach to reaching your aforementioned target audience. List your advertising channels, organic marketing methods, messaging, budget, and any relevant promotional tactics.

If your company has a fully fleshed-out marketing plan, you can attach it in the appendix of your business plan. If not, download this free marketing plan template to outline your strategy.

Free Marketing Plan Template

Outline your company's marketing strategy in one simple, coherent plan.

Pre-Sectioned Template
Completely Customizable
Example Prompts
Professionally Designed

Why it matters: Marketing is what puts your product in front of your customers. It's not just advertising — it's an investment in your business.

Throwing money into random marketing channels is a haphazard approach, which is why it's essential to do the legwork to create a solid marketing plan.

Here's some good news — by this point, you should have a solid understanding of your target market. Now, it's time to determine how you'll reach them.

Example of a Marketing Plan Overview

"Our marketing strategy will focus on three main initiatives:

Social media marketing. We will grow and expand our Facebook and Instagram following through targeted social media ads.
Website initiatives. Our website will attract potential visitors by offering updated menus and a calendar of events.
Promotional events. Jay Street will have one special theme night per week to attract new clients."

6. Sales Plan

It doesn't matter if your sales department is an office full of business development representatives (BDR) or a dozen stores with your products on their shelves.

The point is: All sales plans are different, so you should clearly outline yours here. Common talking points include your:

Sales team structure, and why this structure was chosen.
Sales channels.
Sales tools, software, and resources.
Prospecting strategy.
Sales goals and budget.

Like with your marketing plan, it might make sense to attach your completed sales plan to the appendix of your business plan. You can download a template for building your sales plan here .

Why it matters: Among other things, investors are interested in the scalability of your business — which is why growth strategies are a critical part of your business plan.

Your sales plan should describe your plan to attract customers, retain them (if applicable), and, ultimately, grow your business. Be sure to outline what you plan to do given your existing resources and what results you expect from your work.

Example of a Sales Plan Overview

"The most important goal is to ensure financial success for Jay Street Lounge and Restaurant. We believe we can achieve this by offering excellent food, entertainment, and service to our clients.

We are not a low-cost dining option in the area. Instead, the food will have premium pricing to match its upscale feel. The strategy is to give Jay Street a perception of elegance through its food, entertainment, and excellent service."

7. Legal Notes

Your investors may want to know the legal structure of your business, as that could directly impact the risk of their investments. For example, if you're looking for business partners to engage in a non-corporation or LLC partnership, this means they could be on the line for more than their actual investment.

Because this clarification is often needed, explain if you are and/or plan to become a sole proprietor, partnership, corporation, LLC, or other.

You should also outline the steps you have taken (or will need to take) to operate legally. This includes licenses, permits, registrations, and insurance.

The last thing your investor wants to hear after they've sent you a big chunk of change is that you're operating without proper approval from the local, state, or federal government.

Why it matters: The last thing your investor wants to hear after they've sent you a big chunk of change is that you're operating without proper approval from the local, state, or federal government.

Example of Legal Notes

"Jay Street Lounge and Restaurant is up-to-date on all restaurant licenses and health permits. Our business name and logo are registered trademarks, presenting the possibility of expanding locally."

8. Financial Considerations

Ultimately, investors want to know two things:

When they will earn their money back.
When they will start seeing returns on their initial investment.

That said, be clear, calculated, and convincing in this section. It should cover:

Startup costs.
Sales forecasts for the next several months/quarters.
Break-even analysis for time and dollars.
Projected profit and loss (P&L) statement.

Facts and figures are key here, so be as specific as possible with each line item and projection. In addition, explain the "why" behind each of these sections.

However, keep in mind that information overload is a risk, especially when it comes to data. So, if you have pages upon pages of charts and spreadsheets for this section, distill them into a page or two and include the rest of the sheets in the appendix. This section should only focus on key data points.

Why it matters: One of the most important aspects of becoming "investor ready" is knowing your numbers. More importantly, you need to understand how those numbers will enhance your business.

While it's easy to write a number down on paper, it's more important to understand (and communicate) why you need capital, where it's going, and that your evaluation makes sense.

Example of Financial Projections

"Based on our knowledge and experience in the restaurant industry, we have come up with projections for the business.

Starting with an expenditure of $400,000 in year 1, we forecast sales of $1,500,000 and $2,800,000 for years two and three. We expect to achieve a net profit of 15% by year three."

9. Appendix

A detailed and well-developed business plan can range anywhere from 20 to 50 pages, with some even reaching upward of 80.

In many cases, the appendix is the longest section. Why? Because it includes the supportive materials mentioned in previous sections. To avoid disrupting the flow of the business plan with visuals, charts, and spreadsheets, business owners usually add them in the last section, i.e. the appendix.

Aside from what we've already mentioned – marketing plan, sales plan, department budgets, financial documents – you may also want to attach the following in the appendix:

Marketing materials
Market research data
Licensing documentation
Branding assets
Floor plans for your location
Mockups of your product
Renderings of your office space or location design

Adding these pieces to the appendix enriches the reader's understanding of your business and proves you've put the work into your business plan without distracting from the main points throughout the plan.

Why it matters: An appendix helps the reader do their due diligence. It contains everything they need to support your business plan.

Keep in mind, however, that an appendix is typically necessary only if you're seeking financing or looking to attract business partners.

Use a Business Plan Template to Get Started

Writing a business plan shouldn't be an insurmountable roadblock to starting a business. Unfortunately, for all too many, it is.

That's why we recommend using our free business plan template. Pre-filled with detailed section prompts for all of the topics in this blog post, we're confident this template will get your business plan started in the right direction.

Editor's note: This post was originally published in June 2017 and has been updated for comprehensiveness.

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Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice.

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

Product goals and deadlines for each month
Monthly financials for the first two years
Profit and loss statements for the first three to five years
Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

Executive summary
Description of business
Market analysis
Competitive analysis
Description of organizational management
Description of product or services
Marketing plan
Sales strategy
Funding details (or request for funding)
Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

What is the vision and mission of the company?
What are the company’s short- and long-term goals?

See our roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

What business are we in?
What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

Who is our customer?
What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

Who is the competition?
What do they do best?
What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

What is the product or service?
How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

Who is the target market (if different from existing customer base)?
What channels will you use to reach your target market?
What resources does your marketing strategy require, and do you have access to them?
If possible, do you have a rough estimate of timeline and budget?
How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts.

Start by answering the following questions:

What is the sales strategy?
What are the tools and tactics you will use to achieve your goals?
What are the potential obstacles, and how will you overcome them?
What is the timeline for sales and turning a profit?
What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

How much capital do you currently have? How much capital do you need?
How will you grow the team (onboarding, team structure, training and development)?
What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years.

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

How and when will the company first generate a profit?
How will the company maintain profit thereafter?

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy.

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company.
Add a Company Overview Document the larger company mission and vision.
Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting.
Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel | Microsoft Word | Adobe PDF | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates .

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.).
Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Lean Business Plan Templates for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships.

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

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Small Business Trends

How to create a business plan: examples & free template.

This is the ultimate guide to creating a comprehensive and effective plan to start a business . In today’s dynamic business landscape, having a well-crafted business plan is an important first step to securing funding, attracting partners, and navigating the challenges of entrepreneurship.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

Executive Summary

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

Introducing three new products within the first two years of operation.
Achieving annual revenue growth of 30%.
Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

Innovative and eco-friendly product offerings.
Strong commitment to sustainability and environmental responsibility.
Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

Limited brand recognition compared to established competitors.
Reliance on third-party manufacturers for product development.

Opportunities:

Growing consumer interest in sustainable products.
Partnerships with environmentally-focused organizations and influencers.
Expansion into international markets.
Intense competition from established technology companies.
Regulatory changes could impact the sustainable technology market.

Competitive Analysis

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

Year 1: $1.5 million in revenue, with a net profit of $200,000.
Year 2: $3 million in revenue, with a net profit of $500,000.
Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

Revenue: $1,500,000
Cost of Goods Sold: $800,000
Gross Profit: $700,000
Operating Expenses: $450,000
Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example: The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

Depreciation: $10,000
Changes in Working Capital: -$50,000
Net Cash from Operating Activities: $210,000

Investing Activities:

Capital Expenditures: -$100,000
Net Cash from Investing Activities: -$100,000

Financing Activities:

Proceeds from Loans: $150,000
Loan Repayments: -$50,000
Net Cash from Financing Activities: $100,000
Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

The template is divided into the following sections:

Mission statement
Business Overview
Key products or services
Target market
Financial highlights
Company goals
Strategies to achieve goals
Measurable, time-bound objectives
Company History
Mission and vision
Unique selling proposition
Demographics
Psychographics
Pain points
Industry trends
Customer needs
Competitor strengths and weaknesses
Opportunities
Competitor products and services
Market positioning
Pricing strategies
Organizational structure
Key roles and responsibilities
Management team backgrounds
Product or service features
Competitive advantages
Marketing channels
Advertising campaigns
Promotional activities
Sales strategies
Supply chain management
Inventory control
Production processes
Quality control measures
Projected revenue
Assumptions
Cash inflows
Cash outflows
Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

What are the Different Types of Business Plans?

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
It presents the company’s financial projections, showing its potential for profitability and return on investment.
It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
It establishes clear, measurable objectives that serve as performance benchmarks.
It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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41 Online Business Ideas You Can Start in 2023

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Setting up an online business can help you become an entrepreneur without significant startup costs. The first step: figuring out the best online business idea for you.

What do you have expertise in? What do you love to do? Do you know someone who needs a type of support you could provide? Answering questions like these can offer inspiration as you prepare to start a business .

Here are 41 online business ideas to help you brainstorm. From side hustles to full-time enterprise, e-commerce businesses to services for remote clients, you may be able to run these from home on your own schedule.

Shopify Ecommerce

Basic Plan. Shopify & Advanced Plans Available.

The 41 best online business ideas

If you're not totally set on going all-in on your online business, many of these ideas can be started part time. As you build your side hustle, it may be successful enough to turn into a full-time gig .

1. E-commerce store

Starting an e-commerce website is relatively easy and cheap — at least when compared with opening up a brick-and-mortar store. You can start with a limited amount of inventory, use an e-commerce website builder to set up your store, then market your products on social media and online marketplaces and see how customers respond. These platforms can also help you manage orders, ship your products and take online payments.

2. Social media marketing

If you’ve got a knack for getting likes, favorites, retweets, followers, shares, comments and clicks, then you might want to consider offering social media marketing services to other businesses. By consulting with companies to manage their social media profiles, spread their content across the web, keep their brands on track and respond to customer questions, you can turn your favorite hobby into your day job.

3. Freelance graphic design

Got an eye for aesthetics? Did you go to art school, or have you always spent your free time designing posters in Photoshop or Illustrator?

If so, then freelance designing might be a good choice. Take on clients at your own speed, build up a good reputation online and by word-of-mouth and work on projects that you find interesting.

4. Freelance writing

If you’re skilled in words instead, you might become a freelance writer . So long as you’ve got an internet connection and a keyboard, you can contribute all types of written content, from blog posts to feature stories to product descriptions. It helps if you’ve got a special area of interest or expertise so your employers will know you’re qualified to comment on certain topics.

» MORE: Best bank accounts for freelancers

5. E-book writing

With Amazon and other websites around, self-publishing has never been easier than it is today. If you think you’ve got something interesting or useful to say — and you believe other people will think so, too — then writing e-books could become a lucrative business.

With e-books, you don’t have to design, print or ship physical copies of your work. Of course, you will have to learn how to format an e-book correctly, pay for editing and cover design services and figure out an effective marketing strategy — but there are plenty of examples to learn from.

6. Translation

If you’re fluent in multiple languages, then translating could be the ideal online freelance job. You can do it from anywhere, so long as you’ve got the text you’re working on and you understand the goal of the translation.

» MORE: Check out 16 other e-commerce business ideas

Editing comes in many shapes and sizes, from copyediting a company’s marketing materials to proofreading novels to indexing academic manuscripts. As long as you have a sharp eye for detail, a strong grasp of grammar and a willingness to get in the weeds, then editing could be a great business idea if you’re interested in working when and how you want.

8. Writing a blog

Starting a blog can support other online business ideas by showing off your skills. Interested in coding, photography and video, fitness, food or anything else? Demonstrate your knowledge by writing great articles on those topics for others’ blogs.

If you choose to start your own blog, it can also generate revenue itself through affiliate links or advertisements.

9. Freelance researching

Whether you’re putting together documents for competitor or market research , answering tough technical questions on forums or analyzing statistics to point out trends, you can put your skills to work for your clients — with the freedom to work how you want.

10. Freelance coding and web design

If you’re seeking flexibility, diversity of projects, taking on work at your own pace and being your own boss, then freelance coding or web design for clients may be a good fit.

Plus, you can double down as a software consultant as well, offering your critical eye and expertise without writing code yourself.

» MORE: Best business credit cards for LLCs

11. Software and app development

Want to take freelance coding to the next level? Instead of helping clients, you can work on your own applications, programs, extensions and add-ons. Whether you sell your work in an app store or you’re holding out for the long haul and are hoping to get bought by a bigger company, the cash you make will be a direct result of your effort and ingenuity. App development is also a way to make money on Shopify .

Keep in mind, it’s not as easy to have a predictable stream of revenue until your app is already out and selling, and by then you’ve already invested a lot of time and energy. You’ll want to be sure that there’s a market out there for the product you’re creating, and that people are willing to pay for it.

12. Business coaching

You’ll need a good track record and a variety of testimonials to back you up, but if you’re already an entrepreneur, business coaching can provide an additional revenue stream. You can offer one-off sessions, small-group experiences or ongoing client relationships at a variety of price points.

13. College consulting

If you went to a top-tier university and have strong writing skills, you may be able to help applicants seeking admission to elite colleges. You might find yourself editing essays, steering students toward test prep courses and recommending scholarship programs, among other things.

» MORE: How to start a consulting business

14. Tutoring

For those studious entrepreneurs who scored highly on standardized tests, tutoring can pull in a lot of money without too much effort. The better your results, the better your reputation — which means the more you can charge per hour, session or package.

15. Online fitness trainer

If fitness and health is your passion, then serving as a fitness trainer to clients could be a fulfilling career. While training people online can be more difficult than being with them in person, this is an increasingly popular option for busy professionals. You can also consider related services like nutrition education.

» MORE: A step-by-step guide to starting a fitness business

16. SEO consulting

Maybe you’re a pro at SEO, or search engine optimization. If you’ve got loads of skill and experience in getting websites to rank highly on Google, and you understand how to turn searchers into customers, then there are plenty of companies willing to pay handsomely for your help.

Whether it’s by editing metadata tags, regularly updating the company blog or searching for smart keywords to rank highly on, a good SEO consultant can drastically change how a company’s website appears to search engine users — and just a few positions on Google can make a huge difference in traffic numbers. In short, you could have a big impact on a business’s bottom line, which means this online business idea is in high demand.

17. Selling handmade goods

If you’re handy or creative, you could craft your products and sell them on sites like Etsy, Amazon and eBay, straight out of your home.

Beyond that, if you’re a visual artist, you may also try selling print-on-demand products. That’s a type of e-commerce business where customers order mugs, T-shirts or other goods and with your artwork printed on them, then a third party creates the product and ships it to the customer.

18. Virtual thrift shop

Maybe you’re not into handicrafts but the idea of an starting an online store is still appealing? Selling clothes online using platforms like thredUP and Poshmark is one option.

If you're more interested in other types of products, you can scour local estate sales and secondhand shops for unique finds. You may also discover good finds on websites like eBay. As you present these products in compelling ways on your own site, good copywriting and a strong brand can go a long way to separating your site from the crowd.

19. Affiliate marketing

Social media pros, take notice: You can get paid by companies to highlight products on your blog, Instagram, Twitter, YouTube or other social channels. The more followers or site visitors you have, the more of an impact your brand recommendation will make, and the more you’ll earn with product placement.

20. Accounting or bookkeeping

Although entering the industry as a virtual bookkeeper or accountant can be tough because of competition from well-known brands in the industry, it can be done if you have the credentials or target clients in a specific niche. You’ll also need formal training and certification, and it may take time to build up a committed client base — but once you do, your clients may be with you for years.

» MORE: See our picks for best small-business accounting software

21. Telemarketing

If you’re a natural conversationalist who likes helping others, virtual telemarketing is another good online small-business idea to consider. Plenty of companies outsource some of their sales and customer service roles, so if you don’t mind working the phone at home or on the go, then try this option out.

22. Online personal assistant

Thinking about becoming a virtual assistant ? What exactly you’ll do depends on what your skills, experience and network of contacts are, but you can expect tasks from data entry to customer management, research, scheduling and other duties.

23. Data entry

If you’re looking for a job that offers a predictable income without requiring intense creativity, then data entry might be a good place to start. Try looking at online job boards for opportunities.

24. Transcription

Offering transcription services online can take many forms: You can transcribe audio interviews for reporters, create captions for TV shows and videos or develop transcribed versions of podcasts. Services like Rev or TranscribeMe can also send you work as it becomes available, which saves you the work of cultivating your own client base.

25. Travel planning

If travel is your passion, you might consider starting an online travel planning business . You can help clients plan every aspect of their trip — from flights to hotels to activities. You can work on itineraries, give tips about food, currency exchange and safety, and serve as a point of contact between your clients and any international contacts.

Not only can you operate your travel planning business at home, you can also do it while you travel. And more traveling will help you grow your business — you might even start a travel blog or photography site to supplement your planning business.

26. Cybersecurity and IT consulting

As a cybersecurity consultant, you can work with businesses of all sizes to evaluate their systems, run testing and offer tips on how they can improve their set up.

For those looking for something broader, you might consider serving as an IT consultant, assisting businesses or individuals with their technology — helping them get it set up, troubleshoot any issues and offer general operating advice.

With the proper computer set up, you can run your cybersecurity or IT consulting business from anywhere — including potentially traveling to clients’ offices for occasional on-site system assistance.

27. Online therapy

With the emergence of companies like TalkSpace and BetterHelp, you no longer have to have an office or your own practice to counsel patients. Again, you’ll need training and proper credentials. But you can explore the online therapy space by joining one of these new companies or another practice that offers virtual appointments.

28. PR consulting

If you're knowledgeable about business branding and marketing, you might start an online PR consulting business. You can assist businesses with their online presence — including social media accounts, press releases, web content and more — as well as advise them on campaigns, initiatives and overall public image.

As a freelance PR consultant, your hours and responsibilities may vary depending on the specific clients you're working with; however, you'll have more control than you would as part of a firm or agency.

29. Podcasting

Provided you have the right audio equipment and a quiet space, you can record your podcast from anywhere. You can then upload your content to various podcast apps and market your business on social media. Once you reach a certain number of listeners, some podcast platforms will help you sell ads and you'll begin generating revenue.

30. Life coaching

Looking for a way to offer advice and guidance to people without needing the extensive education of a medical professional? Consider life coaching . Although you may need a certification to become a life coach, you have much more freedom to find your niche and decide how you can help people through life's ups and downs.

As a life coach, you can also create resources like e-books and courses to give your clients additional resources outside of traditional phone call or video chat meetings.

31. Video production

As a video producer, you can work with different clients in various industries to shoot, cut and edit video to create the perfect final product. Video production can give you the opportunity to explore a unique medium of storytelling and exercise your creativity.

32. Resume writing and career coaching

If you have a background in human resources, or just know your way around formulating the perfect resume, you might consider starting an online resume writing and career coaching business. You can offer clients advice and guidance on their career path, job applications, resumes and cover letters.

LinkedIn is a great place to get started with this type of online business idea, as many professionals look for career help on that platform.

33. Dropshipping

If you don't want the responsibility of creating your own products or buying inventory upfront, you might consider starting a dropshipping business. With this kind of e-commerce operation, you create your own website, choose products from suppliers, list them on your site, and when an order is placed, the supplier will ship them directly to the customer.

You can get started by browsing dropshipping marketplaces or trying to work directly with manufacturers and importers.

» MORE: How to dropship on Shopify

34. Recruiting

If you're a people person and have good online research skills, you might consider a career as a recruiter. As an online recruiter, you can service different businesses looking to hire new employees and help them find and screen candidates. The more experience you have, the higher-level positions you may be tapped to help fill.

35. Marketing consulting

As a marketing consultant, you can provide guidance on a wide range of topics, depending on your specific expertise, and help businesses execute their online marketing strategies and campaigns. This could include email marketing, social media management and advertising, local marketing , event planning and more. You can specialize in a particular industry or geography, or market your skills to a variety of clients using a network like Upwork.

36. Online fundraising or grant writing

Are you passionate about helping mission-based businesses, especially nonprofits, getting the assistance they need? If so, consider a grant writing business. This requires you to work with clients who need help fundraising to identify grants suited to their needs, then apply for and hopefully win them.

37. Online course teaching

You can find information about practically anything online, but sometimes when you're trying to learn a specific skill or topic, it just helps to hear or see someone else explain it. So if there’s a subject you have specialized knowledge of — a particular software program, a craft, a particular historical event — consider designing an online course. If you have formal qualifications like an advanced degree, you might be able to work with an online course service to teach courses online for their students.

38. Online cooking instruction

Do you have an affinity for cooking or baking? Showcasing your skills online via virtual cooking classes is a great way to earn money while doing something you love. There are a variety of ways you can structure your cooking business: You can offer one-on-one instruction videos, host live classes and even create workshops and cooking programs.

This easy business idea could even translate into a cooking blog, e-books, cookbooks and linking your favorite cooking and baking supplies through affiliate marketing.

39. YouTube channel

One way to promote your new brand, service or message is by creating a YouTube channel. If you feel comfortable on camera, have a spot where you can film and love the idea of reaching a wide audience, YouTube might be the right platform for you. Note, though, that it can take some time for your channel to grow and you'll likely need to network on social media and blogging platforms in the beginning.

» MORE: How to make money on YouTube

40. Voiceover work

To start your own voiceover business, you'll need a microphone, sound editing software and the ability to lend your voice to ad agencies, production companies and anyone else looking for a voiceover.

Then, you can sign up for a freelance voiceover site like voices.com and start searching for the right opportunities. Once you've gotten your foot in the door, you'll have excellent clips to show potential clients.

41. Start a team

If you've been freelancing or running your own company for a while, you might be ready to take the plunge and start your own team of consultants or freelancers. For instance, if you have years of writing and editing experience and can no longer handle all your client inquiries yourself, you might be ready to hire your first employee and expand your capacity.

How to choose an online business idea

These online business ideas represent a variety of e-commerce business models . To choose the right one for you, ask these questions.

How do you want to make money?

Lots of business owners seek out predictable, recurring revenue so they can plan their personal finances. Keeping clients on retainer can help with that. But affiliate marketing, advertising or product sales may be harder to predict. Creating a business plan can help you think through your options and decide which you’re comfortable with.

How will you find work?

If you’re selling your skills as a freelancer, consider searching sites like Upwork and Behance to find the right clients. Networking in your local community, joining industry-specific LinkedIn groups and asking for referrals can be helpful, too.

If you’re selling products or building an audience online, you’ll need different tactics. Search engine optimization can help get your videos or product listings in front of people who will be interested in them. But you may need a significant marketing budget to develop an audience that’s large enough to generate revenue.

How much autonomy do you want?

With some online businesses, like selling handmade goods or creating online courses, you’ll have control over your products from start to finish — which can be freeing but also high-pressure. On the other hand, when you’re producing work for clients, you’ll have to conform to the client’s standards — which may feel confining, but you won’t have to do the work of coming up with ideas yourself. Some solopreneurs aim for a mix of client work and self-directed projects so that they have steady revenue while pursuing their passions.

A version of this article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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Creating an Effective Business Plan: A Guide to Success

Introduction

A well-crafted business plan is vital for the success of any enterprise. It serves as a roadmap, detailing your business goals, strategies, and the means to achieve them. This guide will walk you through the essential components of creating an effective business plan, helping you lay a solid foundation for your business endeavors.

Executive Summary

The executive summary is the doorway to your business plan. It provides a concise overview of the business and plans to achieve its goals. Although it appears first in the layout, it should be written last to encompass all key points of the document. It should include:

Business name and location
Products and services offered
Mission statement
Business owner’s details
Brief overview of the market
Financial highlights
Funding requirements

Business Description

This section offers a detailed description of the business. Explain the industry, your business structure, the particular advantages your company offers, and how your products or services fit into the current market. This should also cover your business’s long-term potential and any new products or developments that are in the pipeline.

Market Analysis

A thorough market analysis will support your business plan by illustrating your understanding of the industry and the market you wish to enter. Include:

An evaluation of the industry, including size, growth rate, and trends
Target market demographics and psychographics
Market needs and how your business will meet them
Competitor analysis, focusing on their strengths and weaknesses and how you can capitalize on them

Organization and Management

This section should outline your business’s organizational structure, detailing the ownership, management team, and staffing requirements. Include:

Details of business ownership and the legal structure (e.g., sole proprietorship, partnership, corporation)
Profiles of your management team, including their backgrounds and roles within the company
An organizational chart if available

Products or Services

Here, describe what you’re selling or offering, focusing on the customer benefits. Outline:

Detailed descriptions of each product or service
The pricing model for each product or service
How the products and services will be marketed and sold
Any intellectual property or proprietary technology

Marketing and Sales Strategy

This section outlines how you will attract and retain customers. It should include:

Your marketing strategy: How will you enter the market, what channels will you use, and what are your marketing angles?
Sales strategy: This should include sales tactics, expected conversion rates, and methods of sale (e.g., online, at a storefront, B2B)

Funding Request

If you are seeking funding, specify the amount needed over the next five years and how you will use it. Detail:

Current funding requirement
Future funding requirements over the next five years
Strategic financial plans for using the funding

Financial Projections

Supplement your funding request with detailed financial projections to reassure potential investors. Your aim here is to demonstrate that your business will be financially viable. Provide:

Forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets for the next five years
Break-even analysis
Financial assumptions and projections

An appendix is optional but highly recommended for including permits, leases, resumes of the management team, contracts, and other pertinent legal documents.

An effective business plan not only paves the way for securing investment but also provides a structured way to think about your business. It forces you to think realistically, objectively, and critically about your business and is a tool that will guide you through the startup phase and beyond. Good planning is key to business success, and starting with a robust business plan is paramount.

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Starting an online business in 2024: Seven essential steps

Launching a small business online in 2024 is more streamlined than it was a decade ago, yet it still demands a blend of technical acumen, business savvy and a hefty dose of commitment and effort.

While tools and platforms have made it easier to set up an online business, the competition has also intensified. Standing out in a crowded online space requires a unique value proposition, a solid business plan and a proactive approach to marketing and customer engagement.

Follow these seven crucial steps to guide your online business journey.

Step 1: Define your idea

What's your innovative business concept? It must address a problem that people are willing to pay you to solve. Align your idea with your passions, skills and strengths. Conduct thorough research online and offline to pinpoint your niche.

Step 2: Handle administrative tasks

With your idea solidified, attend to the finer details. Name your business, register the domain and craft a business plan outlining the objective, goals and a roadmap for the next few years.

Step 3: Invest in essentials

Equip yourself with the tools you will need to thrive. Shop around for the best deals, considering second-hand or refurbished items where feasible. By investing strategically in essential tools and resources, you'll create a strong foundation for your online business.

Step 4: Procure or create products and services

Prepare your offerings for launch. Source products or craft handmade items. Offer discounted rates or freebies to family and friends – you'll need these to garner initial reviews.

Step 5: Develop your brand

Craft a distinct brand identity comprising your logo, colour scheme, typography, tone and imagery. Stand out from competitors and consider using affordable logo makers if needed.

Step 6: Build your website

Your website is your digital storefront. Invest in reliable hosting and either hire professionals or use a website builder to create a user-friendly, professional website.

Step 7: Market your business

You need to market your business. While progress may be gradual initially, consistency in quality and service is extremely important.

Embark on continuous marketing efforts, such as:

Social media.
E-mail marketing.
Local market events or launch parties.

Remember: It is vital to prioritise exceptional customer service for lasting success. It builds trust and loyalty, enhances your reputation and increases customer retention and revenue.

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IMAGES

How to Write Business Plan PDF: Expert Advice
One-Page Business Plan: The Step-By-Step Guide
Online Business Plan Template in Google Docs, Word, PDF
Creating a Business Plan: Why it Matters and Where to Start
A Complete Guide On Small Business Plan Examples (2022)
Simple Business Plan Template For Startup Founders

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COMMENTS

Starting an Online Business: A Step-by-Step Guide
Starting an online business can be a powerful way to launch a new product or service while reaching a wider audience. With market research, a solid business plan, a strong website, and a digital ...
How to Write an Ecommerce Business Plan [Examples & Template]
Strategize your marketing plan. Create a sales plan. Outline legal notes and financial considerations. 1. Give an executive summary. An executive summary is a one-to-two-page overview of your business. The purpose of an executive summary is to let stakeholders know what the business plan will contain.
How to Start an Online Business Profitably From Home (2023 Guide)
Why Start An Online Business From Home. Online businesses can be profitable with low startup costs. The ecommerce market is growing, especially due to COVID-19, offering many opportunities. Some of the richest people in the world got their start with online businesses. With the right business plan and commitment, you can reach customers worldwide.
Create Your Custom Business Plan Online
1. Create a free Venngage account using your email, Google or Facebook profiles. 2. Select the perfect business plan template from our library of professionally designed templates. 3. Use our online Business Plan Creator to add your information, data and more to your business plan template.
How to Write an Online Business Plan
The seven key elements of a business plan are the executive summary, company description, market analysis, organization and management, services and products, marketing plan, and financial projections. If you're making a funding request, that would be an eighth section.
The Complete Guide To Starting An Online Business
Make it legal. Deal with your finances. Launch your business. 1. Vet your idea. First things first: you gotta vet your idea. Before jumping in head first, you need to be 100% confident (or at least 90%) confident that your idea is worth it—worth the time, sacrifice, stress, anxiety, frustration, and ego hits.
How to Start an Online Business in 2024
Step 2: Build a financial plan for your online business. Step 3: Create compelling product listings. Step 4: Market your product, drive traffic, and build brand awareness. Step 5: Optimize your online business and plan for growth. Aspiring entrepreneurs have looked for innovative ways to make money.
How To Write A Business Plan (2024 Guide)
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
How to Start an Online Business in 2023
Post contents. 1 How to Start a Business Online (From Scratch) #1: Don't Start Building Yet. #2: Choose a Business Model. #3: Identify Your Target Market. #4: Find a Problem to Solve. #5: Analyze The Competition. #6: Cover Your Legal Bases. #7: Select Your Sourcing Strategy.
Free Business Plan Template
Try Now. Apply our simple business plan template. to give you a head start. Our business plan software lights the way as you sort through the important elements of creating a business plan. Inject your own creativity into your presentation using our vast library of icons, photos and animations, or keep it simple and clean.
How to Write a Business Plan: Guide + Examples
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. A good business plan is much more than just a document that you write once and forget about. It's also a guide that helps you outline and achieve your goals. After completing your plan, you can ...
How You Can Actually Start an Online Business This Year
Step 5: Optimize and refine constantly. Your online business is launched, and your work has truly just begun. Buckle in because everything with you business is about to accelerate. It is totally ...
Simple Business Plan Template (2024)
This section of your simple business plan template explores how to structure and operate your business. Details include the type of business organization your startup will take, roles and ...
Online Business Plan Software Features & Benefits
Try LivePlan today. Totally risk free. 35-day money-back guarantee. Get Started Now. Use LivePlan to create your business plan. LivePlan is fully customizable and works for every business in every industry, including for products, services, and even non-profits.
Create a Business Plan in Minutes
The marketing strategy outlined in your business plan helps in identifying the best channels and tactics to reach your audience and achieve market penetration. Financial Planning: One of the most critical components of a business plan is the financial forecast. It outlines your funding requirements, expected revenue, profit margins, and cash ...
Bplans: Business Planning Resources and Free Business Plan Samples
Business Glossary. Definitions for common terminology and acronyms that every small business owner should know. Bplans offers free business plan samples and templates, business planning resources, how-to articles, financial calculators, industry reports and entrepreneurship webinars.
How to Build a Detailed Business Plan That Stands Out [Free Template]
This is why crafting a business plan is an essential step in the entrepreneurial process. In this post, we'll walk you through the process of filling out your business plan template, like this free, editable version: Download a free, editable one-page business plan template. We know that when looking at a blank page on a laptop screen, the idea ...
Business Plan Software With Performance Tracking
It's proven, companies that plan and track against their plan grow 30% faster than those that don't. No matter your industry, location, or size — LivePlan helps you get your business off the ground and grow. "It wasn't my intention to be an entrepreneur or a business person. My intention was to work with dogs.
Business Plan Builder
Get simple instructions every step of the way. LivePlan's step-by-step instructions, examples, prompts and definitions of key business terms guide you through each phase of creating a professional business plan. Access a library of over 550+ sample business plans for inspiration, chat with support for additional help, or join an expert-led ...
How to Write a Simple Business Plan
A business plan is a document that communicates a company's goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered. A business plan can highlight varying time periods, depending on the stage of your company and its goals.
How to Create a Business Plan: Examples & Free Template
Tips on Writing a Business Plan. 1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively. 2.
41 Online Business Ideas You Can Start in 2023
LinkedIn is a great place to get started with this type of online business idea, as many professionals look for career help on that platform. 33. Dropshipping. If you don't want the responsibility ...
Create Your Business Plan with PlanBuildr
PlanBuildr is the #1 online business plan software. PlanBuildr and its founders have been featured in over 300 media sources. By signing up, you agree to our Terms , Data Policy and Cookies Policy .
15 Online Business Ideas For 2024
8. Freelance Writer/Editor. Offering your writing or editing services as a freelancer can be a fulfilling online business opportunity. This could involve writing articles, blog posts, web content ...
Free editable and printable business plan templates
Skip to start of list. 702 templates. Create a blank Business Plan. Beige Aesthetic Modern Business Plan A4 Document. Document by Rise & Roar Design. Green Professional Strategic Business Plan Executive Summary. Document by Antler. Startup Business Plan. Document by Maea Studio.
Best Online Business Planning Courses and Programs
A business plan is a comprehensive document that outlines the strategic objectives, operational details, and financial forecasts of a business venture. It serves as a roadmap for entrepreneurs, startups, or existing businesses, providing a structured framework to guide decision-making and attract stakeholders.
Business Plan Online
Join over 1 million entrepreneurs who createdtheir business plans with LivePlan. Start my business plan. Start planning for $20 per month. Creating a professional, investor ready business plan has never been easier. Try our LivePlan Business Plan Software today. All products have a 35 day money back guarantee.
Creating an Effective Business Plan: A Guide to Success
Introduction. A well-crafted business plan is vital for the success of any enterprise. It serves as a roadmap, detailing your business goals, strategies, and the means to achieve them. This guide will walk you through the essential components of creating an effective business plan, helping you lay a solid foundation for your business endeavors.
Business Plan: Create & Download
Internal Business Plan: For startups and existing businesses. Description: focuses primarily on business strategy--metrics, goals, forecasts, budgets, and review/revision process. Since the plan is for internal use, its not necessary to include the history of the company or information about the team.
Starting an online business in 2024: Seven essential steps
Name your business, register the domain and craft a business plan outlining the objective, goals and a roadmap for the next few years. Step 3: Invest in essentials.