definition of project business plan

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There is a tremendous amount of planning that goes into any successful project. When you're a project manager, you'll have a lot to remember at all times. As a result of your project plan, you will know precisely what to concentrate on at each stage of the project, where to allocate resources and time, as well as what to watch out for in case things run over schedule or over budget. 

In order to get the most out of a project, you need to put in a lot of effort upfront to create a project plan that will serve you well throughout the project's lifespan. Here are five reasons why project management planning is essential.

It Serves as a Starting Point for Your Project

Your project plan, based on the agreed-upon scope, timeframe, and budget, will be developed in accordance with the authorized project charter. Having these baselines in place, specified, and authorized by the project owner will allow you to compare the actual progress of your project to how it was expected to be achieved.

This is very beneficial since it allows you to rapidly assess whether or not your project is progressing according to plan and, if it isn't, what needs to be done to fix the situation.

The Project Is More Organized

There are no alarms or surprises when your project is written out in a clear project plan. To make sure there is no space for misunderstanding or miscommunication, your thorough project plan will lay out all of the deadlines and deliverables in great detail so that everyone involved is aware of exactly what is expected of them.

It Lays Down the Project’s Scope in Detail

Another advantage of this alignment is that it prevents scope creep. When the project plan document clearly defines the stakeholder's expectations and all agreed-upon deliverables, it's easy to identify when anything is out of scope.

In addition, it makes it simpler to deal with these issues. As a result, everyone can be persuaded of what they initially committed to, and there is no doubt about what is (or isn't) within the scope of the project, owing to a written contract or project planning sheet.

It Provides for More Efficient Project Management

Breaking down the project's work into digestible parts like deliverables, goals, or tasks makes it much simpler to figure out what resources you'll need to get it done.

Once again, you may have begun to explain this in the scope statement at a basic level, but your project management plan would be where you become more specific about how you're going to utilize the resources you have available.

It Instills Confidence in Your Endeavor

Project sponsors, stakeholders, and the project team (and, if you're feeling really down, even yourself) might be comforted by knowing where you're heading and why.

When you have a project plan document, everyone can understand how your expertise as a project manager is advancing the project's and the organization's objectives in unambiguous terms.

 You need to know these five things before you begin developing a project plan.

Determine the Project’s Baselines

The first step in creating a project strategy is to ensure you understand the fundamentals. Start with establishing the project's scope, timeline, and cost baselines, since these restrictions will dictate the remainder of your project planning.

Aside from the project charter, here is the place where you truly begin to map out these baselines and establish reliable estimations. Because you'll be comparing them to other projects to see how well yours does, be as specific as possible.

Determine the Repercussions of Your Project’s Failure to Meet Its Goals

Alternatively, you may ask yourself: what must happen first in order for the next step to be possible? Establishing your project's dependencies early on allows you to better manage your timetables, identify possible roadblocks, and minimize delays.

Select Key Players in the Undertaking

There are likely to be additional project stakeholders as you go through the project management plan as well as go through each step in more depth than you identified during your stakeholder analysis.

During this time, you should also consider which stakeholders have to be informed and engaged at which stages of the project in order to create a more thorough stakeholder management plan.

Identify the Project’s Key Milestones

What are the most important signs that your project is moving forward? Your project may be broken down into a series of smaller, more manageable parts, each with a clearly stated objective. This keeps the team engaged, enables you to celebrate your successes, and shows how the overall development is moving along.

Establish the Responsibilities of Everyone Involved in the Situation

With a clear picture of the labor and resources required, you can begin choosing who should be doing what. Each item must have a designated owner to ensure that it is completed.

As per the PMBOK® Guide , the project management plan is an output of the Develop Project Management Plan process in the Project Integration Management Knowledge Area.

The Project management plan is not created all at once. It is progressively elaborated, which means it is developed, refined, revisited, and updated. Since the project management plan integrates all the knowledge area management plans into a cohesive whole, it needs to be assembled after all the component plans have been created.

Most of the components of the project management plan are created in various processes defined in the PMBOK® Guide; for instance, the Communications Management Plan is developed in the Plan communications process.

However, the Schedule Management Plan, Cost Management Plan, and Scope Management Plan are created in the Develop Project Management Plan process. When a project charter is created in the initiating process group, it contains a summary of scope, budget, and a summary (milestone) schedule.

Since you already have these things at the time you begin developing the project plan, you can go ahead and develop the scope management plan, cost management plan, and schedule management plan. Later, when you perform the Plan Scope, Estimate Costs, and Develop Schedule processes, you can revise the components of the project plan with more detail to reflect a deeper understanding of the project.

Step 1 - Create a High-Level Template for Project Planning

When it comes to your company, what does a project plan appear like? Starting with any existing resources that you can use as a reference, such as project plan examples or project plan templates, is a good place to start when developing a project strategy.

Make use of whatever resources your company makes available, such as a high-level template for planning projects, a project planning worksheet, model plans, or a calendar for preparing projects

Step 2 - Define Your Project Objective 

There are many free templates and examples available to lend a helping hand with your preparation, but remember to choose the proper one for your project type when using one.

Your project management plan should be personalized to your project type, workforce type, and specific demands. IT project plans for new equipment rollouts, for example, are likely to vary from agile project plans, which in turn are likely to differ from more comprehensive strategic project plans.

Gantt charts, task lists, and other project management elements may help you ensure that your plan is effective.

Step 3 - Identify All Stakeholders

Once your project outline is ready, you have to identify the key stakeholders in the project success. Hence, it is important to collect all your requirements. Once you have collected this information, you need to define the scope of the project for each stakeholder and mention clear deliverables. To ace this step of project management good communication skills are required. 

Step 4 - Get Feedback From Your Customers, Project Stakeholders, and Team Members

A strategy written in a vacuum is less likely to acquire the support it needs when the time comes. Your stakeholders will feel more involved in the project planning process if you include them, and it sets the stage for an integrated team atmosphere that will benefit your project.

Make sure you gather feedback from the project's leading characters when you establish a project plan, whether it's a planning meeting, a brainstorming session, or a one-on-one interview. Also, as an additional perk? It's an excellent chance for you to continue establishing connections with key stakeholders that you began developing throughout the stakeholder and project charter and analysis.

Step 5 - Any Previous Project Management Planning You’ve Done Should Be Included

If you've already completed stages 1-5 of project planning, you should include the results of those steps into your project management plan, as well as any research you've done up to this point. 

The Project Management Institute's Project Management Body of Knowledge Guide and Standards recommend the following strategies for your project management plan:

• Plan for scope management
• Plan for the management of requirements
• A strategy for time management
• A cost-cutting strategy
• Plan for quality control
• A strategy for managing resources
• A strategy for managing communications.
• A strategy for risk management
• The procurement strategy
• Stakeholder outreach strategy

While the PMBOK suggests implementing these 10 strategies as a baseline, you may discover that various projects need different methods.

Each of these areas should be covered at some point in your project management planning, even if they aren't comprehensively documented.

Step 6 - Choose a Central Location for Your Project Management Strategy

Your project management plan, including your project charter, should be kept centrally so that all parties involved, including stakeholders, the team members, management, and clients, can easily access it.

Using a project management tool, you can bring your defined project management strategy to life, ensuring that you remain on schedule, hold your team responsible, and promote openness throughout the project.

Since the project management plan is a formal document that is used to manage the execution of the project , it must receive formal approval. Who grants the approval for the project management plan depends on the organizational structure and a number of other factors.

Usually, the customer or the senior management of an organization does not approve the project management plan document. The customer signs the contract but often leaves the internal workings of the organization delivering the project. Typically the project plan is approved by the project manager, project sponsor, or the functional managers who provide the resources for the project.

It becomes less difficult for a project manager to get the project management plan approved, if:

• All the stakeholders are identified along with and their requirements and objectives.
• The project manager handles conflicting priorities in advance.

Project Management involves all the practices required for managing a project to maintain its activities from its initiation till its termination, ensuring that the organizational goals and stakeholder demands are met. 

Financial Management is all about managing resources and financial operations to increase profit while achieving the organization’s and stakeholder’s objectives as soon as possible in a satisfactory manner.

1. How can I write a project management plan?

Writing a project management plan requires you to identify your project baselines. Write an executive summary and create your timeline/ team charts. Next, you will have to perform and write a risk assessment. Note down your communications and resource sub plans. Lastly, present your project management plan to the stakeholders. Collect their insights, feedback, and suggestions. You must try to incorporate the relevant ones before finalizing your plan.

2. What are the six parts of a project management plan?

A project management plan comprises an executive summary, Gantt chart/ timeline, stakeholder or team chart, risk assessment, communication sub-plan, and resource sub-plan.

3. What is the purpose of a project management plan?

With all the details and necessary steps laid, a project management plan reduces confusion, boosts confidence, and prevents obstacles during project execution. It provides a clear outline and value proposition, assigning essential roles, identifying and preventing risks, outlining milestones, and ensuring clear communication and availability of essential resources.

4. What is project management methodology?

A project management methodology comprises a set of principles, processes, and values that gauge how a team will complete a project. It structures several factors that would influence the project competition, including planning, design and documentation, communication methods within and outside of the team, timelines, and assessment modes. 

5. How can project planning software help plan projects?

Project planning software lends a helping hand and simplifies project planning from the beginning to the end. It supplies much-needed project management features and transparency in the planning and execution. It facilitates effective communication among and within teams, helps track key performance factors, store data in a central location, generate reports, and overcome any other project management challenges. 

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Project Management Plan: Definition, Elements, Steps, And The Main Purposes

Written By : Bakkah

Table of Content

What Is a Project Management Plan?

What are the main elements of a project plan, how to create a pm plan, project management plan according to pmbok, what are the 7 components of a project management plan according to pmbok, how long does the project planning phase take, techniques for the project planning process, what is the purpose of a project management plan, enroll now in bakkah's premier training programs to establish an improved project management plan:, popular articles.

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The Project Management Plan is a cornerstone document that lays the foundation for successful project execution. This comprehensive guide serves as a roadmap, providing project managers and their teams with a structured approach to navigating the complexities of project planning, implementation, and control. 

Understanding the intricacies of the Project Management Plan is key to aligning project activities with organizational objectives, ensuring success, and fostering effective communication throughout the project life cycle.

This comprehensive guide serves as a roadmap for project managers and teams, facilitating effective planning, implementation, and control. In this overview, we explore the definition, essential elements, step-by-step creation, and main purposes of the Project Management Plan.

The Project Management Plan (PMP), is a comprehensive document that outlines the planning, execution, monitoring, and closing phases of a project . It outlines the approach, methodologies , processes, and strategies that will be employed to ensure the successful completion of the project.

The Project Management Plan serves as a roadmap that helps project managers and team members understand and communicate the various aspects of the project to stakeholders . It helps ensure that everyone involved is on the same page regarding project goals , timelines , and expectations.

It is also a dynamic document that is updated throughout the project life cycle to reflect changes, lessons learned, and evolving circumstances. Regular updates to the plan help adapt to changes, manage risks, and improve overall project performance.

A project plan is a comprehensive document that outlines the details of how a project will be executed, monitored, and controlled. While specific project plans may vary depending on the nature and complexity of the project, the following are the main components of the project management plan:

1. Project Overview

A project overview provides a brief description of the project, including its purpose and objectives. It serves as an introduction to the project's context and importance. Additionally, it identifies key stakeholders involved in or affected by the project.

2. Project Scope

Project scope involves defining the boundaries of the project, and outlining what is included and excluded. The scope statement provides clarity on the project's limits and helps prevent scope creep, ensuring a clear understanding of project deliverables.

3. Work Breakdown Structure (WBS)

The Work Breakdown Structure (WBS) is a hierarchical decomposition of the project into phases, deliverables, and work packages. It serves as a visual tool that helps organize and understand the project's structure, breaking it down into manageable components for better planning and control.

4. Schedule

The project schedule outlines tasks, milestones, and dependencies, providing a timeline and deadlines for project activities. It serves as a roadmap for project execution, helping manage time effectively and ensuring that the project stays on track.

5. Resource Management

Resource management involves developing a human resource plan that specifies roles, responsibilities, and staffing requirements. It also addresses physical resource requirements, such as equipment, facilities, and materials, ensuring efficient resource allocation.

The project budget details estimated costs for labor, materials, equipment, and overhead. It includes cost control measures and financial considerations, providing a foundation for financial management throughout the project.

7. Quality Management

Quality management establishes quality standards and metrics for project deliverables. It includes processes for quality assurance and quality control, ensuring that project outcomes meet predefined criteria.

8. Risk Management

Risk management involves the identification of potential risks and uncertainties. It includes risk assessment, the development of risk response strategies, and the creation of a risk register to proactively manage and mitigate risks.

9. Communication Plan

The communication plan outlines stakeholder communication strategies, channels, and frequency. It also defines reporting formats and mechanisms, ensuring effective and timely communication throughout the project.

10. Procurement Plan

The procurement plan details the procurement strategy for acquiring goods and services. It includes vendor selection criteria and a contract management plan to ensure efficient and effective external resourcing.

11. Stakeholder Management

Stakeholder management involves the identification of project stakeholders and the development of a stakeholder engagement plan. This plan addresses communication and involvement strategies to manage relationships effectively.

12. Change Management

Change management includes procedures for handling changes in project scope, schedule , or budget . It outlines change control processes and documentation to manage modifications systematically.

13. Monitoring and Control

Monitoring and control involve defining key performance indicators (KPIs ) for tracking project progress. It includes control mechanisms to address deviations from the plan and ensure ongoing project success.

14. Closure Criteria

Closure criteria specify conditions for project completion and closure. It outlines procedures for the handover of project deliverables and documentation, ensuring a systematic and well-documented project conclusion.

15. Documentation

Documentation outlines procedures for maintaining project records. It includes version control and archiving processes, ensuring a comprehensive and organized record of project activities.

16. Assumptions and Constraints

Assumptions and constraints address factors that may impact the project. Assumptions made during project planning and constraints are documented to provide context for decision-making throughout the project life cycle.

17. Approvals

Approvals involve defining procedures for obtaining formal approvals for the project plan. It includes sign-off mechanisms from key stakeholders, ensuring commitment and alignment with project objectives.

The elements of a project plan collectively provide a comprehensive guide for project managers and team members, ensuring clarity, control, and successful project delivery. The specific content and emphasis on each element may vary based on the project's requirements and industry standards.

Creating a Project Management Plan involves several key steps. Below is a general guide that you can follow. Keep in mind that the specific details of the plan will depend on the nature and requirements of your project. Here are the typical project planning steps involved in project planning:

1. Define the Project

When creating a Project Management Plan, start by clearly articulating the purpose and objectives of the project. Identify key stakeholders and their roles to establish a foundation for effective project management and collaboration.

2. Develop a Project Charter

Create a formal document that authorizes the project's existence. This Project Charter should clearly encompass what is included and excluded from the project scope, measurable objectives, constraints, assumptions, and initial risks.

That provides a comprehensive overview and authorization for project initiation and ensures a shared understanding among the project team and stakeholders.

3. Create a Work Breakdown Structure (WBS)

Break down the project into smaller, manageable tasks and sub-tasks. Organize these tasks into a hierarchical structure using a Work Breakdown Structure (WBS), a visual tool that aids in understanding and organizing the project's components.

 4. Define and sequence Activities

Develop a detailed list of activities required to complete each task identified in the WBS. This step includes specifying dependencies and sequencing activities and providing a roadmap for task execution.

5. Develop a Project Schedule

Create a timeline that includes project milestones, deadlines, and dependencies. Utilize tools like Gantt charts to visualize the schedule, aiding in effective project time management.

6. Estimate Resources and Budget

Identify and allocate necessary resources, including human, financial, and equipment resources for each activity. Define roles and responsibilities for team members. Develop a plan for team development and training to ensure that the project team is adequately prepared and equipped for their roles.

Develop a budget that encompasses costs for personnel, materials, equipment, and other relevant factors, ensuring realistic financial planning.

7. Risk Management

Identify potential risks that could impact the project and assess their likelihood and impact. Develop mitigation strategies, particularly for high-priority risks, to proactively address and manage uncertainties.

8. Quality Management

Define quality standards and metrics for project deliverables. Establish processes for both quality assurance and quality control, ensuring that the project meets predefined quality criteria.

Identify key stakeholders and understand their communication needs. Develop a communication plan that outlines channels, frequency, and methods, fostering effective and transparent communication throughout the project.

Identify items or services that need external procurement. Develop a procurement strategy and establish vendor selection criteria, ensuring effective and efficient external resourcing.

11. Monitoring and Control

Define metrics and key performance indicators (KPIs) for monitoring project progress. Develop mechanisms for controlling and addressing deviations from the plan, facilitating ongoing project success.

12. Develop and Document the Project Management Plan

Compile all the information into a comprehensive Project Management Plan document. This document serves as the primary reference for project execution, monitoring, and control.

13. Review and Approval:

Review the plan with key stakeholders for input and feedback. Obtain formal approval before implementing the plan, ensuring alignment and commitment from all relevant parties.

Remember that the Project Management Plan is a living document and should be updated regularly to reflect changes, lessons learned, and evolving project requirements. Regular monitoring and control activities ensure that the project stays on track and meets its objectives.

The Project Management Plan (PMP) according to the Project Management Body of Knowledge (PMBOK) is a comprehensive document outlined by the Project Management Institute (PMI). This globally recognized standard provides project managers with a detailed roadmap for planning, executing, monitoring, and controlling projects. According to PMBOK, the plan covers key elements such as project scope, schedule, cost estimates , risk management, quality standards, and communication plans.

It serves as a dynamic document that evolves throughout the project life cycle, adapting to changes, addressing risks, and incorporating lessons learned for continuous improvement.

PMBOK encourages a flexible approach, allowing project managers to tailor the plan to the unique characteristics of their projects. This adaptability ensures that the Project Management Plan remains a relevant and practical tool, enabling project managers to effectively navigate the intricacies of their projects and achieve successful outcomes.

The Project Management Plan according to PMI and PMBOK serves as a valuable resource for professionals seeking to adhere to industry best practices, navigate the complexities, and enhance project management competency.

According to PMBOK, there are seven key components of a Project Management Plan:

• Scope Management Plan
• Requirements Management Plan.
• Schedule Management Plan.
• Cost Management Plan.
• Quality Management Plan.
• Resource Management Plan. 
• Communication Management Plan.

These seven components collectively provide a comprehensive guide for planning, executing, monitoring, and controlling a project.

The duration of the project planning phase can vary widely depending on the size, complexity, and nature of the project. The planning phase is a critical stage, and the time it takes to complete is influenced by factors such as project scope, objectives, team expertise, stakeholder involvement, and the industry in which the project is taking place. Here are some general considerations:

1. Small Projects

For small projects with relatively simple scopes, the planning phase may be completed in a short period, such as a few days to a couple of weeks.

2. Medium-Sized Projects

Medium-sized projects with moderate complexity may take a few weeks to a couple of months for thorough planning. This includes defining objectives, creating schedules, identifying resources, and developing other key components of the project plan.

3. Large and Complex Projects

Large and complex projects, especially those involving significant uncertainties, intricate dependencies, or multiple stakeholders, may have a more extended planning phase. This could range from several months to even a year or more.

4. Industry Factors

The industry or field in which the project is taking place can influence the planning phase duration. For example, projects in industries with strict regulatory requirements, such as construction or healthcare, may require more detailed planning and documentation.

5. Iterative Nature

The planning process is often iterative, meaning that it may go through multiple cycles of review and refinement. This iterative nature can extend the overall duration of the planning phase.

6. Stakeholder Involvement

The level of involvement and collaboration with stakeholders can impact the planning phase. Engaging stakeholders in discussions, reviews, and decision-making processes may require additional time.

7. Project Management Methodology

The chosen project management methodology also influences the planning duration. Agile methodologies, for instance, often involve iterative planning and may have a more ongoing and adaptive planning approach.

8. Team Expertise

The experience and expertise of the project team can affect how efficiently planning activities are conducted. A team familiar with the project's domain and skilled in project management may complete planning more efficiently.

9. Project Urgency

Urgency and time constraints for project delivery can also impact the planning phase. In some cases, projects may need to accelerate the planning phase to meet tight deadlines.

It's important to note that while the planning phase is crucial for project success, it should not be overly prolonged. Balancing thoroughness with the need to initiate project execution promptly is essential. Regular reviews and updates during the project life cycle allow for adjustments to the plan as needed.

The project planning process involves various techniques to ensure effective and thorough planning. These techniques help project managers and teams in defining project scope, scheduling tasks, allocating resources, and managing risks. Here are some commonly used techniques in the project planning process:

1. Work Breakdown Structure (WBS)

Description: Hierarchical decomposition of the project into smaller, manageable tasks.

Purpose: Helps in organizing and understanding the project's structure, breaking it down into more manageable components.

2. Gantt Charts

Description: Visual representation of the project schedule with tasks displayed along a timeline.

Purpose: Provides a clear overview of task durations, dependencies, and project milestones.

3. Critical Path Method (CPM)

Description: Identifies the longest path of dependent tasks, determining the project's minimum duration.

Purpose: Helps in scheduling and resource allocation by highlighting critical tasks.

4. PERT (Program Evaluation and Review Technique)

Description: Uses three estimates for each task (optimistic, most likely, pessimistic) to calculate task duration probabilistically.

Purpose: Provides a more realistic and probabilistic approach to task duration estimation.

5. Resource Histogram

Description: Graphical representation of resource allocation over time.

Purpose: Helps in identifying periods of resource constraints or overloads.

6. Earned Value Management (EVM)

Description: Integrates project scope, schedule, and costs to assess project performance and progress.

Purpose: Measures project performance against the planned baseline and forecasts future performance.

7. SWOT Analysis

Description: Evaluates project strengths, weaknesses, opportunities, and threats.

Purpose: Facilitates risk identification and strategic planning.

8. Risk Assessment and Management

Description: Identifies potential risks, assesses their impact and likelihood, and develops strategies for mitigation.

Purpose: Minimizes the impact of uncertainties on the project and enhances risk management.

9. Stakeholder Analysis

Description: Identifies project stakeholders, assesses their interests, and determines their level of influence.

Purpose: Guides communication and engagement strategies based on stakeholder needs and expectations. 

10. cost-benefit analysis.

Description: Evaluates the costs and benefits associated with project alternatives.

Purpose: Assists in decision-making by weighing the financial implications of project choices.

11. Mind Mapping

Description: Visual representation of ideas, concepts, and tasks in a hierarchical structure.

Purpose: Aids in brainstorming and organizing project ideas and tasks.

12. Benchmarking

Description: Comparing project processes and outcomes against industry standards or best practices.

Purpose: Identifies areas for improvement and sets performance standards.

13. Procurement Planning

Description: Develops a procurement plan outlining how external goods and services will be acquired.

Purpose: Guides the procurement process, ensuring efficiency and adherence to project requirements.

These techniques can be used individually or in combination, depending on the project's requirements and characteristics. Applying a mix of these techniques enhances the overall effectiveness of the project planning process.

Project management planning is a critical and foundational phase that significantly influences the success of a project. The purpose of the Project Management Plan is to provide a roadmap and a structured approach to guide project managers, team members, and stakeholders throughout the project life cycle. The importance of project management planning can be understood through various key aspects:

Guidance and Direction

The Project Management Plan clearly articulates the project's objectives, goals , scope, and deliverables, providing a roadmap for the entire project team and stakeholders.

Scope Clarification

The Project Management Plan delineates what is included and excluded from the project scope, minimizing scope creep and ensuring that the project stays on track and within defined limits.

Work Organization

The Project Management Plan organizes project tasks, activities, and responsibilities through tools such as the Work Breakdown Structure (WBS).

Resource Allocation

It identifies and allocates resources, including human, financial, and material resources, Maximizing resource utilization, minimizing wastage, and enhancing project efficiency.

Risk Management

It outlines strategies for identifying, assessing, and mitigating risks throughout the project life cycle. That enables proactive risk management, reducing the likelihood and impact of negative events on the project.

Quality Standards

A Project Management Plan involves quality standards and metrics to ensure that project deliverables meet predefined criteria.

Communication Strategy and Stakeholder Management

The Project Management Plan defines a clear communication plan, ensuring transparency and facilitating efficient communication to keep stakeholders informed and engaged.

Time Management

The Project Management Plan involves a realistic project schedule, ensuring that tasks are completed within the allocated time and preventing delays.

Cost Estimation and Control

The Project Management Plan helps create a detailed project budget that helps in accurate cost estimation, prevents budget overruns, and allows for effective financial management.

Monitoring and Control

Project Management Plan provides key performance indicators (KPIs) for monitoring and controlling project progress, deviations, and performance against the plan. It includes procedures for handling changes in project scope, schedule, or budget.

Procurement Strategy

The Project Management Plan outlines the procurement strategy if external goods or services are required for the project.

Human Resource Management

The Project Management Plan defines roles, responsibilities, and the overall management of the project team .

Documentation and Learning

The Project Management Plan serves as a central repository for project-related information and lessons learned, providing a single point of reference for all team members and stakeholders.

Project Closure Criteria

Project Management Plan defining criteria for project completion and closure, ensuring a systematic and well-documented project conclusion and allowing for proper handover and evaluation.

Approvals and Sign-off

It provides a formal document for obtaining approval and sign-off from key stakeholders, demonstrating commitment to the project plan .

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Here are the top Project Management Courses :

• Certified Associate in Project Management CAPM Course
• PMI-ACP® certification
• PgMP certification
• PMI Scheduling Professional - PMI-SP certification

Risk Management Courses And Certifications:

• Risk Management Professional - PMI-RMP Course
• MoR Certification and course

PRINCE2 Courses

• PRINCE2 Certification
• PRINCE2 Agile.

Project Management Tools:

• Primavera P6 Course
• MSP Course - Managing Successful Programmes
• Microsoft Project training course  

Portfolio Management

• P3O Foundation certification
• Management of Portfolios MoP
• The Portfolio Management Professional – PfMP certificate
• Lean Six Sigma Yellow Belt Course
• Lean Six Sigma Green Belt Course
• Lean Six Sigma Black Belt Course

Overall, the purpose of the Project Management Plan is to ensure a structured and well-managed approach to project execution, leading to the successful completion of the project within the defined constraints.

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What is a Project Plan and How to Create One? 

The Project Plan is crucial for successful project delivery. In addition, the project plan saves time and resources.  

For example, imagine a project manager faced with uncertainty and the project failed to go as planned. The time and resources invested in the project will be wasted. 

Nearly thirty-seven per cent of projects fail because of a lack of clearly defined project objectives and milestones. In addition, a study suggests that forty-seven per cent of projects fail to achieve the targets when team leads don't effectively manage requirements. 

You can create a well-thought-out and effective plan for your next project by following a few simple steps.  

Project planning is a critical step in project management.  

Therefore, project management skills are necessary to complete such projects efficiently, whether you are a team lead or leading significant projects and their execution process.  

But, how do you learn the required project management skills? The effective ways to successfully deliver the projects? 

The IPM's Certified Project Management Diploma course may interest you if you wish to learn how to manage project resources effectively. 

What is a Project Plan?  

The project plan defines how the project is executed, monitored, controlled, and closed. In addition, the project plan shows the chain of events that need to happen throughout the project. 

Project planning as a process is output oriented. In simple words, the project plan is concerned with deciding what, when, how, and who will take the necessary actions to accomplish established objectives. 

The project management plan's content varies depending upon the application area and complexity of the project. 

The project plan integrates and consolidates the subsidiary plans and baselines from the planning processes. The project management plan contains subsidiary plans concerning all aspects of the project.

Project baselines include, but are not limited to: 

• Scope baseline,  • Schedule baseline, and  • Cost baseline. 

Subsidiary plans include, but are not limited to: 

• Scope management plan,  • Requirements management plan,  • Schedule management plan,  • Cost management plan,  • Quality management plan,  • Process improvement plan,  • Human resource management plan,  • Communications management plan,  • Risk management plan,  • Procurement management plan, and  • Stakeholder management plan. 

The project management plan may also include the following components: 

• Project life cycle selected for the project and the processes that will be applied to each phase; 

• Details of the tailoring decisions specified by the project management team are as follows: 

• Project management processes selected by the project management team, 
• Level of implementation for each selected process throughout the project, and 
• Descriptions of the tools and techniques to be used for accomplishing those processes. 

• Description of how project tasks will be executed to accomplish the project goals; 

• Change management plan that documents how changes will be monitored and controlled; 

• Configuration management plan that documents how configuration management will be performed; 

• Requirements and techniques for communication among stakeholders; and 

• Key management reviews for content, the extent and timing to address open issues, and pending decisions. 

Why are Project Plans Important? 

Project plans form the foundation for future actions, using the planning document as a guide. Behind every successful project is a lot of planning. 

The project planning process is one of the most critical steps in ensuring the successful execution of a project. 

During this process, the project manager creates a detailed plan that outlines all aspects of the project, including the project schedule, scope , and budget. 

Project planning is essential for several reasons. First, it allows the project manager to gain a better understanding of the project and its objectives. Second, it helps to identify potential risks and issues that may impact the project. Third, it ensures that all stakeholders are aware of their roles and responsibilities. Lastly, it allows the project manager to track and monitor the project's progress. 

Thus a project plan can help you to: 

• Stay on track and meet deadlines 
• Allocate resources effectively 
• Anticipate and solve problems 
• Communicate with stakeholders 

How to Create a Project Plan in 12 Steps 

Creating a good project plan is essential to the success of any project. Yet, many project managers struggle to create a project plan or what should be included in one. 

Knowing what is required, who is to perform specific tasks, how they are to be performed, and when the events should be scheduled allows project managers to organise their activities more efficiently. 

By following these 12 project planning steps, you can create a project plan to help you manage your project successfully. 

Step 1. Understanding Stakeholder's Requirements 

After creating a project charter and identifying the key project stakeholders, gathering requirements is essential. The planning process starts with collecting requirements from stakeholders. 

This discussion will be used to understand their needs and expectations and set a baseline for the project scope, timeline, and budget. 

This information in the process will help define the project's scope. 

Step 2. Establish the Scope of the Project 

The scope statement forms a strong base for the rest of the project. The scope statement lays out the number of tasks that must be completed to achieve each deliverable.  

In this step, you'll need to determine the scope of your project. What is the project's purpose? What problems is it trying to solve? What are the goals you hope to achieve? What are the deliverables you need to produce? Once you clearly understand the scope, you can begin creating your project schedule. 

The scope statement should include the following:  

• Justification 
• Scope description 
• Business needs and business problems 
• Project deliverables 
• Project exclusions 
• Project constraints  
• Assumptions 

Step 3. Craft a Work Breakdown Structure 

Break down the project's scope into smaller, more manageable deliverables and groups of related tasks, also known as "work packages." 

The step will help assign resources to different project parts based on the skills needed. In addition, the work breakdown structure facilitates planning and coordination, two essential project management functions. 

Step 4. Define Project Tasks 

Break down work packages into a list of project tasks. Consider this an action plan. It can help to ask yourself: “What are the activities that are important to create the project deliverables?" 

You'll need to identify the tasks that need to be completed to reach your goals. Then, for each activity, you'll need to estimate how long it will take to complete. Once you have all of your tasks and estimates mapped out, you can start creating your project timeline. 

Step 5. Sequence Project Tasks 

When planning a project, it's important to sequence the tasks so that you can complete the project efficiently and effectively. To do this, you'll need to create a project schedule. This schedule will detail all the tasks that need to be completed and when they need to be completed. Once you have your schedule, you can start working on each activity in the order that makes the most sense. 

For example, if you're working on a design project, you might want to start by sketching out some ideas, then move on to refining those designs, and finally, create a prototype or mock-up. By sequencing your activities this way, you can ensure that you're making the most efficient use of your time and resources. 

Step 6. Estimate Tasks Duration, Cost, and Resources 

Estimating activity duration, costs, and resources are essential when creating a project plan. This will give you a good idea of what is needed to complete the project and whether the plan is viable. It also helps you ensure that your project is completed on time and within budget. 

Step 7. Define Roles, Responsibilities, and Resources 

Once you have your timeline and tasks finalised, it's time to start assigning roles and responsibilities. For example, who will be responsible for each activity? When do they need to have it completed? By giving roles and responsibilities, you can ensure that everyone on your team knows what they need to do to help the project succeed. 

Resources may include humans, materials, equipment, space, and technology. Any organisation has limited resources. After identifying the resources required, it is crucial to define who will perform which activity and the skill level needed for each activity.  

Defining roles and responsibilities from the beginning is necessary to avoid vagueness over roles. Some of the key players in project management are:  

• Project sponsor 
• Designated business experts 
• Project manager 
• Project team 
• End users 
• Stakeholders and the wider business  

Step 8. Building Contingencies 

You might be an expert in project planning, but you cannot ignore twists and turns that occur in a project, and that's what makes it challenging. Before you start your project, take some time to identify potential problems, like team members going on leaves, resigning, or changes in sponsorship.  

Be upfront about the risks with the whole team so they can be prepared to tackle them and build backup plans.  

Step 9. Create a Performance Measurement Baseline 

Develop an integrated scope-schedule-cost baseline for the project work, which will serve as a control tool for your project. Then, compare the execution of the project to your baseline to measure and manage performance. These baselines can be established through status reports within project management software applications. 

Performance should be measured throughout the project lifecycle. This way, you can identify issues and take corrective action before it's too late. It's equally important to measure performance upon completion of the project. This allows you to compare actual results to their baselines to evaluate overall and individual performance. 

Step 10. Develop All Subsidiary Plans 

Developing a comprehensive and realistic project plan requires time and effort. However, planning can make your life easier during the project execution phase by preventing nasty surprises and misunderstandings. 

Most project plans need to incorporate the following subsidiary plans: 

• Scope management plan        
• Schedule management plan   
• Cost management plan 
• Quality management plan      
• Resource management plan 
• Communications management plan   
• Risk management plan 
• Procurement management plan         
• Stakeholder engagement plan 
• Requirements management plan 
• Change management plan    
• Configuration management plan     

Step 11. Document The Project Plan 

Document the scope, schedule, and cost of the project. In most cases, plans include cost management, quality management, resource management, communication management, risk management, procurement processes, and ongoing stakeholder engagement through the project's lifecycle. 

Step 12. Build a Knowledge Base 

In some organisations, project managers document and share their plans when it is mandatory. In other organisations where the knowledge is not documented, it may be important to speak to other project managers to gain insights.  

Tips to Write an Effective Project Plan 

An effective project plan is key to the success of any project. By outlining the tasks, milestones, and resources required, a project plan provides a roadmap for the project manager and team to follow.  

Writing a project plan can seem daunting, but it doesn't have to be with the right tools and tips. Here are some tips to keep in mind when creating a project plan: 

Involve Your Project Team in The Process 

Collaborate with your team and key stakeholders on creating a project plan. Remember, you need input to generate the output. 

Refer to Past Project Plans 

It takes time and effort to write project plans. At the beginning of every new project, you may look at other successful project plans for knowledge—and refer to those as a guide when writing the plan for your project. 

Go through the project management templates and plans for similar projects or other projects within your organisation or industry to get insights for structuring and drafting your plan. 

Be Flexible and Open to Adjusting Your Project Plan  

In the process of project planning, you might want to write and rewrite your project plan to write a perfect one. Be willing and flexible to adjust your project plan when required.  

Don't forget the objective is to successfully deliver on project goals, which may require you to be responsive to changing needs and situations as you move forward.    

Regularly review and update the plan as needed. It will ensure that it remains relevant and accurate as the project progresses. 

Stay Organised  

Make a list of all the tasks that need to be completed. It will help you stay organised and on track. 

A project plan is an essential skill for any project manager. It allows you to track your progress, identify risks and potential problems, and keep your team on track. By following the steps outlined in this article, you can create a project plan to help ensure your next project's success. 

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How to Write a Project Plan – The 7 Core Components

Staring at your project, wondering where to start? Whether you’re a project management ninja or just learning the ropes, the first steps can be intimidating. Let’s learn how to write a project plan to make things a tad easier. In this guide, we outline the core steps for writing bulletproof project plans. You’ll learn how to define objectives, manage resources, and much more.

Let’s get started. 👇

📐 Understanding Project Plans

Definition of a project plan.

A project plan is a formal document that details the project’s goals, scope, and deliverables, as well as the resources, budget, and timeline to accomplish these objectives. It’s essentially a blueprint for your project’s success.

Without it, projects can lose direction and focus.

With it, teams navigate challenges and stay on course.

Project plans are not set in stone; they can grow and adapt. If something doesn’t work out as planned, a project manager can course-correct. This way, the team can handle surprises and still make sure everything gets done right.

Importance of Project Planning

So, why do you need a project plan? 

Does every project, regardless of size or complexity, require one? 

The short answer: Absolutely. Here’s why.

An effective project plan sets the stage with clear goals and objectives. It gives everyone a target to aim for. With that on the table, every action has a purpose.

Project planning also helps optimize the use of time and resources.

We’re all working with limited assets — time, money, people. A project plan helps secure the essential ingredients and ensures they are used wisely.

Moving on, a project plan helps navigate bumps in the road. It allows teams to tackle challenges head-on so that the project stays agile and adaptable.

Finally, a solid project plan creates a shared understanding of the objectives and how each role contributes to the big picture. It fosters a sense of purpose, something you can’t ignore if you want the project to succeed.

Here’s everything you need to write one.

✅ Before You Start: Pre-Planning Considerations

Gathering initial requirements.

Let’s take a quick trip down memory lane.

Did you know that the Empire State Building was completed ahead of the project schedule and under budget? This feat was possible not just because of the engineering prowess but also thanks to meticulous planning.

So, where do we start?

Think of it as your project’s first date.

You want to ask all the right questions: What are we trying to achieve? Who’s going to benefit from this? What do we need to get there?

On a more serious note, this initial stage of gathering requirements is your groundwork for success. It’s where you define the scope, set realistic expectations, and identify potential challenges.

Defining Project Scope and Objectives

“Without a goal, you can’t score.”

In project management, this means clearly laying out what you’re planning to achieve — what you will deliver at the end of the day and what you won’t.

A project scope should include the work required to deliver a product, service, or result. This includes defining and documenting the deliverables and the boundaries of what is and isn’t included.

Objectives, on the other hand, will include specific, concrete goals that guide the project toward successful completion.

For instance, if you’re launching a new website, an objective might be to have 10,000 unique visitors within the first month. Or, if you’re creating a new product, an objective could be to sell 500 units by the end of the quarter.

Getting this down on paper requires key players — your stakeholders.

Stakeholder Identification and Communication

So, who do you talk to first?

Start with the people who have a direct stake in the project’s outcome.

This includes anyone who will be affected by the project, contribute to it, or have a say in its execution and completion. Think team members, clients, suppliers providing essential materials, investors, or even end-users.

It’s a good idea to categorize stakeholders by their level of involvement. The additional legwork will ensure that you’re engaging with the right people.

✏️ Writing the Project Plan: The Core Components

Executive summary.

An executive summary is a concise overview of the entire project plan. It’s designed to give readers a quick glimpse of what the project entails.

Here’s what it should include:

• Project Purpose and Justification : Why the project is necessary.
• Project Objectives : The main goals the project aims to achieve.
• Scope Overview : A snapshot of the project scope.
• Key Deliverables : Major outputs the project will produce.
• Assumptions and Constraints : Conditions and project limitations.
• Brief Overview of Methodology : How to achieve project objectives.
• Summary of Costs and Benefits : Project budget and expected ROI.
• Key Stakeholders : Stakeholders involved in or affected by the project.
• Project Timeline : High-level timeline of the project’s major milestones.

💡 Pro Tip : Writing a project plan can take days or even weeks. You can cut that time by up to 50% with Taskade’s AI features.

Project Goals and Objectives

Alright, let’s zero in on what you’re aiming for in a project. This is where you lay down the markers, the “what” and “why” that’ll keep the project on track.

First things first, project goals are the big-picture targets you’re trying to reach. These are the overarching aims that give our project purpose and direction.

Whether it’s boosting revenue, enhancing customer satisfaction, or launching products, goals set the stage for everything you will do during the project.

Now, let’s talk about objectives, the building blocks that will help your team reach the project goals. They’re the specific steps you and your team will take.

Here’s what you’ll need to do next:

• Define Project Goals : Start with broad goals that encapsulate the project’s purpose, like increasing market share or organic traffic.
• Set Specific Objectives : Break down goals into clear objectives using the SMART criteria, such as “boost sales by 20% in six months.”
• Link Objectives to Strategies : Describe how you plan to achieve each objective, like mapping out a marketing campaign to boost sales.
• Prioritize Objectives : Identify which objectives are most critical to the project’s success. This could mean securing funding or finalizing designs.
• Establish Metrics for Success : Define how success will be measured for each objective. Number of new subscribers? Satisfaction rating?
• Review and Adjust Objectives : Be prepared to revisit and refine objectives as needed. Stay flexible to adapt to changes in scope.

Scope and Deliverables

What exactly is the project aiming to achieve?

How do we define its success?

Outlining the boundaries helps your team understand what’s in play and what’s out. It also helps prevent the dreaded scope creep, which is just a fancy way of saying “biting off more than we can chew.”

Next up, deliverables.

These are the milestones, the tangible outcomes that you’re committing to deliver at various stages of the project. This can be a new software feature, a marketing campaign, or a construction project.

Timeline and Milestones

Why bother with figuring out a project timeline early on?

Well, for starters, it will keep you and your team sane. A timeline lays out the “when” for the project, a key ingredient necessary for tracking progress and adjusting the sails when the wind changes direction.

While it may be tempting to pack the timeline with back-to-back milestones, breathing room is crucial. Projects, like people, need space to breathe, adapt, and grow. Plot your milestones wisely, leaving room for the unexpected.

💡 Pro Tip : Still trying to piece it together? Set up a custom AI agent in Taskade and train it with historical project data to set realistic deadlines. Follow the link or watch this video guide to start.

Resource Allocation

Every project needs adequate resources to lift off. If you’ve done your lesson and applied what we discussed in the stakeholders section, this should be easy.

Start with your crew.

Who’s on board? Evaluate team members’ strengths and match them with project tasks that not only need those skills but will also keep people engaged.

Once you have the “who” figured out, it’s time to discuss the “what.”

The first step is a thorough inventory. What do we have? What do we need? This includes personnel, technology, financials, and physical spaces.

Next on, financial resources. This step involves creating a project budget that reflects the project’s scope, allocating funds across project tasks, and setting up monitoring mechanisms to ensure adherence to the budget.

And let’s not forget about technology. The right selection of tools can make a significant difference in the success of your project.

Check our article on Best AI Project Management Tools to learn more.

💡 Pro Tip : Taskade’s Mind Map view allows you to visualize different aspects of your project, including resources, tasks, and dependencies.

Risk Management Plan

Imagine your project is progressing smoothly, and suddenly, a critical supplier fails. Ok, you don’t have to imagine it. These things happen all the time, and poor risk management is at the heart of most project failures.

A risk management plan is a document designed to identify, assess, and manage potential risks that could impact the project’s objectives. What’s included? At the very minimum, it should discuss:

• Potential Risks : From financials to operational challenges.
• Analysis : An evaluation of risks to understand their impact.
• Risk Mitigation Strategies : Actions to prevent or reduce the risk.
• Monitoring : A process for ongoing monitoring of risks.
• Roles and Responsibilities : A clear breakdown of who does what.

Communication Plan

Communication silos, undercommunication, overcommunication, using wrong channels — a lot of things can go wrong when it comes to project chatter.

You’ve already identified key stakeholders — from team members and managers to clients and vendors. That was step one. Step two is to specify the frequency of communications, the level of detail, and preferred channels.

Drafting a formal document may seem excessive, but it’s well worth it. It lays everything out on the table — who talks to whom, about what, and how often — and sets the rules for a game everyone’s playing.

💡 Pro Tip : Lost in emails, chats, and calls? Taskade centralizes communication so you can work and chat in the same space .

✨ Best Practices in Project Planning

Flexibility and adaptability.

Does our little exercise give you an urge to get everything right? It shouldn’t.

No plan survives contact with the real world entirely unscathed. That’s why you need to leave some wiggle room from a Plan B, C, and even D.

Because circumstances change, new information comes to light, and what seemed like a solid idea yesterday might not hold water today.

So, when the unexpected hits, view it as a chance to refine, not just react. Your plans will shift, and that’s okay. It’s this readiness to adjust that keeps your project resilient and forward-moving.

Stakeholder Engagement

We’re making a full circle back to where it all started — the people.

Stakeholders may have a stake in the project, but getting them fully engaged can be tricky. It requires a blend of clear communication, mutual respect, and genuine collaboration. Check all three boxes, and you’re good to go.

You have come up with a future-proof communication plan. Now, you need to encourage feedback and actively listen to what stakeholders have to say.

Demonstrate that their engagement has a real impact, strengthening their commitment to the project’s success. And when the time is right, don’t forget to celebrate milestones together and address challenges openly.

Continuous Monitoring and Adjustment

Think of this point as the project’s pulse check.

Regular reviews of timelines, budgets, and deliverables allow you to catch potential issues before they escalate. Let’s break it down then.

First, use project management software.

A solid digital toolbox gives you the scoop on everything, in real time — progress tracking, seeing where resources are tight, and spotting hold-ups.

The real magic happens when you start adjusting based on what you’ve monitored. Changes in scope, timelines, and resources should be made thoughtfully, with a clear understanding of their impact on the project.

But it’s not all about tech. Regular team check-ins matter, too. They’re your chance to catch up, tackle problems together, and keep everyone in the loop.

🏁 Finalizing and Implementing the Project Plan

Review and approval process.

So, you’ve got your plan all mapped out. But before you hit the ground running, there’s a crucial step: getting the thumbs-up from those who hold the reins.

First up, the presentation. This is your opportunity to demonstrate the strategic alignment of your project and articulate its relevance to overarching organizational objectives. Present the key milestones, resource distribution, and strategic alignment in a manner that is both detailed and succinct.

Now, brace yourself for feedback. It’s inevitable and invaluable.

Whether it’s a question about your timeline or a suggestion to reallocate resources, each piece of feedback is a gem. Active listening and a willingness to adapt your plan based on stakeholder input are essential.

Implementation Strategy

With vetted project plan in place, it’s time to bring the project to life.

Break down the project into manageable segments with specific milestones. Segmentation makes it easier to track progress and make adjustments along the way. You can use a Gantt chart or similar project management tools to visualize the timeline and dependencies between tasks.

Once the project is in motion, it’s all about smart moves.

Resources? We’ve already mapped that out, as well as risks, key stakeholders, and deliverables. Make sure every dollar, person, and minute counts. Spot those potential hiccups early and react as soon as possible.

Monitoring Progress and Making Adjustments

Maintaining project momentum requires constant attention.

Keep an eye on how things are moving and course-correct as needed. Use key performance indicators (KPIs) and regular status meetings to gauge progress against the project schedule and objectives. Implementing a feedback loop from team members and stakeholders adds extra context and value.

Remember — monitoring is an ongoing strategy.

With the right tools and a responsive approach, you will help your project team thrive, meet challenges head-on, and make more informed decisions.

🐑 Wrapping It Up: Key Takeaways for Successful Project Planning

Time to wrap this up.

We’ve covered the essentials of crafting a comprehensive project plan. You should now understand foundational project elements and implement the plan in real time. You also have the knowledge and tools n to navigate the complexities of project planning successfully. 

But before you go, let’s recap what we’ve learned today:

• Planning is Gold : Good planning sets the stage for success.
• Solid Foundations First : Nail the basics — needs, goals, and who’s in.
• Stay Flexible : Be ready to pivot; perfection is not the goal, progress is.
• Communicate : Dialog is key; keep everyone in the loop.
• Eyes on the Prize : Run regular checks and adjust to keep things on track.
• Seal the Deal : Get that final nod through a solid approval process.
• Action Time : Break it down, use the right tools, and get moving.

And speaking of tools, why don’t you try Taskade? 🐑

Taskade is an AI-powered project and task management platform that streamlines collaboration and helps teams keep a clear view of projects.

🪄 AI Project Studio : Describe what you’re working on or upload seed documents, and Taskade will generate projects, lists of tasks, and even entire workflows.

📚 AI Prompt Templates : New to generative AI? Taskade features hundreds of AI prompt templates to help you start. Pick a prompt, customize it, and you’re ready to go.

✏️ AI Assistant : Plan and organize projects faster with smart insights powered by GPT-4 Turbo. Use dozens of handy AI commands in the project editor or add your own.

🤖 Custom AI Agents : Create a squad of custom AI agents. Deploy then within projects to automate routine tasks and supercharge your workflow.

Visit Taskade’s  pricing page  for for a full list of AI features.

Need help? Want to learn more? Check these resources next:

• 🔗 Basics of Project Management
• 🔗 What Is Scope Creep?
• 🔗 AI Project Management Generators
• 🔗 Project Planning Checklist Template

What Are Gantt Charts? Simplifying Projects with Visual Planning

Effective Project Management Strategies for Healthcare Professionals

Enhancing Team Collaboration and Productivity with Taskade AI

Best Agency Management Software

What Is Scope Creep and How Can It Be Managed?

10 Top AI Tools for Agile Development

How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated July 29, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. 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 use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

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

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

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

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan

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What Is a Project? Definition, Types & Examples

What is a project, exactly? We talk a lot about specific facets of project management, but it’s sometimes valuable to start at the root and dig into the basics.

To fully understand high-level project management concepts, it’s important to know the simple answers. When you can call on this knowledge, more complicated concepts are easier to master. Whether you’re the project manager or a stakeholder, give your next project definition with these project management tips in mind.

Project Definition

A project is a set of tasks that must be completed within a defined timeline to accomplish a specific set of goals. These tasks are completed by a group of people known as the project team, which is led by a project manager, who oversees the planning , scheduling, tracking and successful completion of projects.

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Project Budget Template

Use this free Project Budget Template for Excel to manage your projects better.

Besides the project team, projects require resources such as labor, materials and equipment. Organizations and individuals manage projects with a wide range of objectives. These can take many forms, from constructing a building to planning an event and even completing a certain duty. Retailers, for example, may pursue projects that improve the way they track order fulfillment. Construction teams complete projects any time they plan and build something—and so on!

Project management software gives you the tools to manage all the parts of a project so it is delivered on time and within budget. ProjectManager is award-winning project management software with features to plan, manage and track your project in real time. Organize tasks on our robust Gantt, link all four types of task dependencies to avoid costly delays and save your project plan by setting a baseline. This allows you to track your actual progress against your planned progress to help you stay on track. Get started with ProjectManager today for free.

What Are the Characteristics of a Project?

There are certain features or characteristics that are unique to projects and differentiate them from the daily operations or other types of activities of an organization. Here are the main characteristics of a project.

1. Any Project Needs a Project Manager and a Project Team

One of the most important characteristics of a project is that it’s a team effort. While the structure of project teams might change from one organization to another, projects usually involve a project manager and a team of individuals with the necessary skills to execute the tasks that are needed.

2. Every Project Needs a Project Plan

Project team members need clear directions from the project manager and other project leaders so that they can execute the work that’s expected from them. These directions come in the form of a project plan. However, a project plan is more than just a set of instructions for the project team. It’s a comprehensive document that describes every aspect of a project, such as the project goals, project schedule and project budget among other important details.

3. All Projects Go Through the Same Project Lifecycle

The project life cycle refers to the five phases all projects must progress through, from start to finish. The five phases of a project lifecycle serve as the most basic outline that gives a project definition. These five phases are initiation, planning, execution, monitoring and closure.

4. All Projects Share the Same Project Constraints

All projects no matter their size or complexity are subject to three main constraints: time, scope and cost. This simply means that projects must be completed within a defined timeline, achieve a defined set of tasks and goals and be delivered under a certain budget .

These project constraints are known as the triple constraint or the project management triangle and are one of the most important project features to know about.

5. Every Project Needs Resources

A resource is anything necessary to complete a project, such as for example, labor, raw materials, machinery and equipment. For example, in construction, raw materials such as wood, glass or paint are essential project resources . That said, other resources — like time, labor and equipment — are just as important.

A project manager must be able to identify all of the project resources in order to create a resource plan and manage the resources accordingly. When resources are left unaccounted for, it is easy to mismanage them.

Types of Projects

Projects can take many shapes and forms, which makes classifying them into types a very difficult task that requires different approaches. Here are some of the types of projects grouped by funding source, industry and project management methodology .

Types of Projects By Funding Source

One simple way to categorize projects is to look at their source of capital.

• Private projects: Projects that are financed by businesses or private organizations.
• Public projects: Projects which are funded by Government agencies.
• Mixed projects: Projects that are financed by a public-private partnership.

Types of Projects By Industry

Projects can be executed by large or small organizations from any industry. However, some industries are more project-intensive than others. Here are some of the most common types of projects by industry.

• Construction projects: The main goal of any construction project is to make a building that can be used for different purposes such as infrastructure, residential or commercial use.
• Manufacturing projects: Manufacturing projects consist of manufacturing physical products to generate profits for a company.
• IT projects: Information technology projects consist in establishing an IT framework for the processing of data at a company-wide scale.
• Software development projects: The main goal of a software development project is to create a software product for a client.
• Business projects: The term business project could refer to creating a new business, creating a new business unit for an existing company or simply launching a new business initiative.

Types of Projects By Project Management Methodology

Besides the types of projects mentioned above, projects can also be classified by the project management methodology that’s used to plan, schedule and execute them.

• Waterfall projects: Waterfall is the most traditional project management methodology, where the project plan is defined before the project begins and each major project phase must be completed in sequence.
• Agile projects: Agile projects are planned and executed in short iterations known as sprints , where project teams plan their activities as they execute the project.

Project Examples

Now that we’ve reviewed the main characteristics of a project and the various project types that exist, let’s review some common project examples to better illustrate what a project is.

Construction Project Examples

• Construction infrastructure projects: Building a bridge, a road, a mass transportation system or a water treatment facility.
• Residential construction projects: Building a house, a residential building or an apartment complex.
• Commercial construction projects: Building a shopping mall, a parking lot or a hotel.

Manufacturing Project Examples

• Building a factory from scratch
• Manufacturing products for retail sale
• Manufacturing products for a B2B purchase order
• Improving an existing production line by acquiring new machinery and training employees

Key Project Terms to Know

No matter the project, there are universal project terms that are used regardless of project type, project size or any other factor. Know these seven terms like the back of your hand and you’ll be a step ahead before the project begins:

Project Scope

Project scope is a key aspect of the project planning stage. In many ways, it is the starting point. Determining project scope requires the project manager and their team to set goals and objectives, detail deliverables, create tasks, establish important dates and more. Project scope defines desired outcomes and all specific factors which will affect reaching them.

Project Stakeholder

A stakeholder refers to anyone and everyone involved in a project. A stakeholder can be involved at every stage of the project, or just in a certain way. Stakeholder analysis helps categorize how investors, team members, vendors, contractors and more can affect your project.

Project Deliverables

A deliverable refers to the specific outcome(s) a project creates. Deliverables can be “tangible” or “intangible,” meaning they can be a physical product or something conceptual. Typically, deliverables are the need that inspired the project in the first place. If someone contracts a builder to design and construct an office space, the office is a tangible deliverable.

Project Milestones

Milestones are predetermined achievements that help track project progress. Think of milestones as checkpoints. These checkpoints are decided on before a project begins, so the project manager and team know when they are on track to achieve deliverables. Without milestones, it’s difficult to know if the project is on the road to success or needs to reroute.

Project Dependencies

Project dependencies refer to how resources must be shared and allocated within a project. Many projects will use the same physical materials for different purposes and across different stages. Understanding this dependency is the only way to ensure there is enough resources to go around. Similarly, all projects are broken down into tasks. When one task cannot begin before another is completed, these tasks share a dependency.

What It Means to Work on a Project

Whether it’s the project manager, a team member or any other project stakeholder, they’re a member of the greater project team and their actions directly affect other team members. Like any team, you “win” or “lose” as a unit, so it’s incredibly important to communicate and listen to other team members in order to coordinate efforts and succeed. Most project mishaps and project failures are the direct results of poor communication or lack of collaboration.

Why does this matter as long as the work is getting done? Working on a project is about understanding the project as a whole just as much as it is about doing the work. The only way to see this big picture is by listening to the team and learning from one another.

What Is Project Management?

The process of project management starts with the conception of the project and continues all the way through the project lifecycle. This requires detailed knowledge of company resources and how to assign them in order to complete tasks, duties, events and other projects.

A wide range of industries relies on project management methods and tools to execute projects. A few examples of these industries are construction, IT, engineering, marketing and advertising. Any team working together to reach a shared objective is engaging in some form of project management.

What Does a Project Manager Do?

A project manager is more than just a manager, in the traditional sense. This individual is the leader of the project team and oversees every aspect of the project, from beginning to end. The project manager will typically write the project plan, run team meetings, assign tasks and do quality control tests to ensure everything is running smoothly. A project manager can’t carry the entire project on their back, though. One of their key duties, in fact, is knowing how to entrust various responsibilities to team members.

With the help of their team, project managers will create project schedules and budgets. They will also create project reports throughout the project lifecycle.

As you can see, their responsibilities are widespread, but that doesn’t mean spreading too thin. Ideally, a project manager creates the foundation of the project—like the foundation of a house. They then appoint other individuals to finish out each room.

Project Definition: Best Practices for Project Management

Regardless of the project, the size of the team, or anything else, there are practices that exponentially increase the chances of success. As vital as it is to hit goals and achieve deliverables , it’s just as important to create a positive culture within the project. These five tips may seem simple, but they make a big difference:

Set Regular Team Check-ins

It’s easy to meet with the team “as needed,” but once a project begins it gets harder to find time in everyone’s schedule. Instead, schedule regular meetings before a project even starts. These meetings serve as check-ins where team members can give each other updates, voice concerns, ask questions, make adjustments and do anything else they may need. When these check-ins are already built into the schedule, no one is waiting to meet until there’s a mishap or issue.

Part of what gives a project definition is knowing how to delegate. Whether it’s the project managers or a team member, they’ll more than likely need help with a task at some point. Now, this doesn’t mean just passing along the task to someone else. It means that every team member has equal responsibilities. Instead, the best project managers know how to relinquish some control and delegate to team members.

Know the Team

Everyone on the project management team should be familiar with each other’s strengths, weaknesses and specialties. For example, if a team member needs information from a different department, they should know exactly who to ask. This familiarity cuts down on lost time. It is especially important for a project manager to know their team extremely well.

When a project member knows these things, they can make decisions that play to their team members’ strengths, not around their weaknesses. Knowing the team is a huge aspect of creating a positive culture within a project, as it celebrates everyone’s abilities.

Celebrate Milestones

Speaking of positive culture, never underestimate the power of taking a moment to mark meeting a milestone . Reaching one means the team has made significant progress and the project is still on track. At the very least, it’s important to announce reaching milestones during team check-ins. This keeps everyone on the same page and improves team efficacy.

Choose Superior PM Tools

Project management is an extremely complex job. Without the proper tools, it’s easy to make mistakes, become disorganized and even fail to complete the project. The best way to protect your project from these missteps is by choosing tools that simplify the entire process.

The best project management software does just that. Using project management software unleashes your team’s and the project’s full potential and takes the end result to new heights. The key is finding an intuitive, user-friendly project management software that makes no compromises in functionality.

How ProjectManager Makes Managing Projects Easy

ProjectManager is an award-winning project management software that makes managing projects easier than ever. Our online software allows the entire team to work on the project while in the field or on the go, and our modern interface combines functionality with user-friendly navigation. This means no more wasted time just trying to familiarize yourself with a new tool and more time perfecting your project definition.

Plan on Gantt Charts

Plan your projects from start to finish with ProjectManager’s powerful Gantt chart feature, which allows you to map out project tasks in phases. You can even create dependencies and set milestones. Plus, you can import Excel files and Microsoft Project files, so switching over to our software is seamless.

Track on Project Dashboards

As the project team moves forward with tasks, project managers can track every status update on our real-time dashboard that you can personalize to show the most important metrics. Every change to a task is tracked and automatically updates the colorful, easy-to-read charts and graphs. Keeping an eye on your project’s progress has never been easier!

Get all these features and more when you use ProjectManager. All of these tools are available in our software to help you plan, track and report on your project in real time. See what it can do for you by taking this free 30-day trial run!

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What Is Project Management? Definitions, Examples & More

Updated: May 29, 2024, 3:58pm

The goal of project management is to help a team achieve a goal or solve a problem with a set deadline. The project manager owns responsibility for the team hitting its deadline and meeting the goal. But what is project management exactly, and how does it work? Here’s a primer on everything you need to know to get your projects on track.

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What Is Project Management?

Project management uses processes, skills, tools and knowledge to complete a planned project and achieve its goals. It differs from general management because of the limited scope of a project, concrete deadlines and specific deliverables.

A project exists temporarily and must balance the involved team members’ time and usually the organization’s limited financial resources—a daunting task but one that can be accomplished in a few deliberate steps that utilize special methods and tools.

Steps of Project Management

Project management begins when a manager or team initiates a project. The five phases of project management include:

• The initiation phase. The project manager will assign—or ask for team members to volunteer—to complete specific tasks.
• The planning phase. The team agrees on a schedule with the client or among themselves for the project. The team may also create a communication schedule with key stakeholders, determine the project’s standards and set a budget during this phase.
• The execution phase. This phase is where the work gets done. Employees may work independently or as a team on tasks that were determined during the previous phases.
• The monitoring phase. The project manager monitors each person or team’s progress along the way to ensure the project is on track to meet the overall deadline and achieve its goals. This phase often happens simultaneous to the execution phase.
• The closing phase. Finally, the project manager ensures the team completed the project to the agreed-upon standards and communicates that the team completed the project.

Project Management Tools and Techniques

Even though every project has its own goals and challenges, team members can utilize similar project management tools and techniques to complete their various deliverables.

For example, a deliberate communication plan can serve as one of the most valuable tools in a project manager’s toolkit. A strong project manager communicates with all stakeholders and facilitates strong communication among team members working on the project.

And during the monitoring and execution phase, well-organized project managers may also rely on software to keep themselves and their team on track.

One software program won’t meet all your needs for every project but programs like Trello , Asana or Airtable will help your team members track their and each other’s progress. The software also makes it clear who owns responsibility for which task.

In addition, project managers may use traditional tools such as the Program Evaluation Review Technique (PERT) and Gantt charts to guide their teams’ work. PERT helps define the project’s scope and helps monitor the tasks that the team needs to complete. Gantt charts show the timeline and calendar view of when assignments are due. Many project management software applications now do this digitally.

Frequently Asked Questions (FAQs)

What are the different types of project management methods, and which one is right for me.

There are dozens of project management types , and they all have different benefits and limitations that make them good for some environments, and bad for others.

What are the best project management tools and software?

To determine the best project management software , we ranked several tools based on ease of use, cost to your organization, each company’s customer support, as well as special features.

Wrike was our top choice. It earned the top spot because it works for companies and teams of all sizes. Airbnb, Google and Dell all trust Wrike to aid their project managers. Wrike also allows teams to create custom workflows, set timelines with interactive charts and reporting and build a visual representation that shows the progress of every project in real-time.

Other highly ranked project management tools include Asana, Monday and HighGear.

Who are project managers, and what do they do?

For the best chance at success, every project needs an owner who is responsible for its completion and success. Project managers exist to fill this need, keep a team on task and ensure the project meets the needs of all stakeholders. This designation could be a subset of responsibilities—or an official job title.

A diverse range of industries requires the skills of a talented project manager. You can be a project manager in construction, publishing, finance, professional services, utilities and many other industries. Despite the final result of the projects looking very different across these industries, the steps and skills to keep a team organized fluently translate across the business world.

Why is project management important?

Project management is important in business because it helps you complete projects successfully and hit goals for yourself and your clients.

Coordinating a multifaceted project for which several people owe deliverables, keeping everyone organized and ensuring the output meets expectations—all this while under the stress of a deadline—presents a challenge for even the most experienced project manager.

These challenges become more feasible through project management best practices.

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Meredith Galante is a full-time freelance writer living in New York City. She's been covering small businesses, the wine and spirits industry, and more for the last 10 years. Meredith graduated from the SI Newhouse School of Public Communications at Syracuse University with a degree in magazine journalism and political science.

Adam Hardy is a former assistant editor at Forbes Advisor, where he covered small business and tech. Previously, he was a staff writer at The Penny Hoarder, specializing in the gig economy and entrepreneurship. His work has appeared in the Asia Times, Business Insider, Creative Loafing, the Tampa Bay Times, Yahoo! Finance and other publications.

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

Published: June 28, 2024

Years ago, I had an idea to launch a line of region-specific board games. I knew there was a market for games that celebrated local culture and heritage. I was so excited about the concept and couldn't wait to get started.

But my idea never took off. Why? Because I didn‘t have a plan. I lacked direction, missed opportunities, and ultimately, the venture never got off the ground.

And that’s exactly why a business plan is important. It cements your vision, gives you clarity, and outlines your next step.

In this post, I‘ll explain what a business plan is, the reasons why you’d need one, identify different types of business plans, and what you should include in yours.

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What is a business plan?

What is a business plan used for.

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What does a business plan need to include, types of business plans.

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A business plan is a comprehensive document that outlines a company's goals, strategies, and financial projections. It provides a detailed description of the business, including its products or services, target market, competitive landscape, and marketing and sales strategies. The plan also includes a financial section that forecasts revenue, expenses, and cash flow, as well as a funding request if the business is seeking investment.

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

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

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What is a business project? (with 6 in-depth examples)

When you order an advanced LEGO set these days, the LEGOs come pre-packaged as individual steps.

That’s because the end result — a complex and well-built LEGO structure — is much easier to achieve when you tackle it in smaller parts.

For this same reason, businesses also break major goals and company milestones into smaller steps.

These smaller steps are then achieved through business projects, which are carried out by teams across different departments company-wide.

In this article, we’ll tackle exactly what we mean by a business project, common business projects by department, and exactly how they’re managed so those teams hit their goals every time.

What is a business project?

A business project is a project that’s designed to achieve a specific business goal or objective. These goals or objectives align with the company’s overall business strategy .

In fact, businesses are now so project-focused that many of them actually have a discrete business function to oversee them all, called Project Business Management (PBM) .

At its core, PBM is just another layer of project management — instead of tracking just one project, this function makes sure that processes behind all of the business’s projects are running smoothly, using the same methodologies and processes as any other type of project management.

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What are some common types of business projects?

There are so many different types of business projects out there that we couldn’t claim to name them all. Across different departments, organization types, and industries there are custom business goals that require business projects of all kinds.

The following are some of the most common types found in each department, no matter the industry or organization.

Marketing teams are responsible for the creation of a lot of content — everything from press releases to ad campaigns, blog articles, webinars, product one-sheets, videos, emails and so much more.

The creation of content is one common type of business project, requiring project management skills to ideate, create and track progress, all while coordinating efforts from different teams.

To manage this business project, marketing teams often use an editorial calendar .

The editorial calendar is a list of content organized around a dedicated publish date or time, and often keeps track of task owners, status updates, content type, and more. Here’s an example:

Our work operating system (Work OS) has everything marketing teams need to run their editorial calendar  smoothly.

The task list is used to organize plans for all content types, while also assigning task owners, communicating status, and visualizing whether or not the project is on track to meet the publish date. It even includes space to drop in ideas that haven’t been assigned a slot in the calendar yet.

Each row contains information about an individual item:

Columns are used for things like task owners, priority, status and data collection:

The best part — you can toggle between views to see your editorial as a literal calendar, as a timeline, as a Kanban board and more.

monday.com also automates status updates and notifications as you go. Here’s an in-depth walkthrough on exactly how to set up an editorial calendar using this functionality:

Research and development (R&D)

One common business project for R&D teams is the creation and maintenance of a roadmap.

A product roadmap is a shared source of truth outlining a product’s vision, priorities, and progress over time. It’s used to align the organization on both short- and long-term goals.

They’re typically structured by quarter. Here’s an example of a product roadmap built using monday.com’s Work OS:

This template  includes everything a product roadmap requires, including initiatives organized by quarter, an assigned task force, timeline, an integration with a sprint plan, and progress tracking.

You can also toggle to the timeline view for a clearer picture of how different tasks will fall in the calendar.

Part of project managing a product roadmap is planning sprints, or 1–4-week time periods in which an agreed upon set of tasks is to be completed.

monday.com’s sprint planning template  includes everything project managers need to plan a sprint within the Scrum framework (a popular method of project management for development teams).

Last but not least, in order to plan a sprint, project managers create tasks based on a product or feature backlog.

monday.com’s feature backlog template  includes everything project managers need to easily collect and prioritize product wishlists.

For operations teams, a common business project is keeping track of sales orders and inventory.

This template includes product type, numbers colors, stock status and a full inventory count.

The team uses the workload view — shown below — to visualize which items are fully stocked and which might need attention. The lighter the bubble, the lower the inventory:

Their inventory board is integrated with their order history, where they track the number of units sold, price, cost to manufacture, and other details that have an influence on the decision of which products to stock.

A dashboard view breaks down their orders by hat type, instantly visualizing which products are their top sellers and which aren’t necessarily customer favorites.

Finance teams typically manage a common business project known as expense tracking — a calculation of how and where the business’s money is spent.

monday.com’s expense tracking template  supports finance teams in logging and tracking incoming expenses from other teams, while automatically calculating total expense values.

Finance teams, much like other departments listed in this article, can also use monday.com to track and assign other types of activities.

Here’s how Lonely Planet UK  uses monday.com to keep their finance team on top of tasks like reporting, cost allocation and ROI inquiries:

Sales teams manage one big always-on business project — the client and customer lifecycle.

This type of business project is often managed with the use of a customer resource management (CRM) tool, which works well, but can isolate the sales team processes from other teams.

monday.com’s Work OS operates allows you to build a CRM for sales teams inside the same platform you use for all your other business projects.

Our CRM template  effectively manages leads, active leads, won and lost opportunities and churned customers all in one place, while also keeping you connected with other teams throughout the organization.

Custom columns allow flexibility in tracking data, including the status and potential revenue impact of individual negotiations.

Sales teams can automate their workflow so that communications with prospects and clients runs smoothly.

For example, if a prospect changes from lead to active lead, you can automatically notify the correct member of your sales team to reach out using the following flow:

Last but not least, you can see your pipeline at a high level using monday.com dashboards. In this example, one client’s dashboard view visualizes monthly revenue by client.

Human resources

Human resources departments are always tasked with a major ongoing business project — the recruitment and onboarding of new employees.

monday.com makes it easy to set up a recruitment pipeline and track your progress. The recruitment process template provides a foundation to organize a recruitment pipeline by applications, interviewees and candidates hired.

It organizes data by department, source and stage of the recruitment process, while also storing related documents like a resume or CV .

Much like the sales pipeline , with the dashboard view, recruitment teams can keep track of their recruitment pipeline visualizing data by department or role.

Once employees are hired, our onboarding template allows other members of the HR department to track progress in getting new employees set up with technology, email, phone and a physical workspace if necessary.

Manage your business projects with monday.com

That’s due to a handful of key features that lay the foundation for any department, in any organization, in any industry, to be successful.

First, we keep everything in one place — communications, notifications, documents and data all live under one roof.

Second, we automate things like status updates and notifications to reduce miscommunication and lag time between one step and the next.

Third, our dashboards allow project managers and team members to toggle to whatever view works best for their needs — Gantt, Kanban, table, timeline, calendar and more — we have it all.

Fourth, we integrate with tools you’re already working with, which means you don’t have to reinvent the wheel in order to accomplish effective project management.

Finally, our drag and drop user interface (UI) is beautiful and easy to use — your team will be excited to log in everyday and get to work within our Work OS.

Tackle your business projects with ease

As businesses of all types look to optimize processes to increase productivity and positively impact revenue, they’re becoming more project oriented.

Project managers in all types of organizations, industries and departments need the right platform to manage their business projects for a successful impact on their business’s bottom line.

If you’re looking for a solution that transcends the typical project management tool , to elevate your business project to heights you’ve never reached before, check out monday.com.

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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

What is a business plan? 

A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.  

In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes. 

Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]: 

The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors. 

The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks. 

Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.  

Read more: What Is a Marketing Plan? And How to Create One

1. Executive summary 

This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan. 

2. Business description 

Use this section to provide detailed information about your company and how it will operate in the marketplace. 

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice. 

3. Competitor analysis 

This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following: 

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each one solve customer pain points and fulfill desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

Read more: What Is Competitor Analysis? And How to Conduct One

4. Products and services

Use this section to describe everything your business offers to its target market . For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach them. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

Read more: Market Analysis: What It Is and How to Conduct One   

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

Read more: What Is a Brand Strategy? And How to Create One

7. Financial planning  

In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].  

Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning. 

How many individual products or service packages do you plan to sell over a specific time period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point, or the amount you have to sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

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Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization : 

Article sources

1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.

2. Inc. " How to Write the Financial Section of a Business Plan ,   https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.

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What Is a Business Plan? Definition and Planning Essentials Explained

Posted august 1, 2024 by kody wirth.

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

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

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

What is a business plan?

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

Why do you need a business plan?

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

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. 

The biggest mistake you can make is not writing a business plan, and the second is never updating it. By regularly reviewing your plan, you can understand what parts of your strategy are working and those that are not.

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

What can you do with your plan?

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

Test an idea

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

Market and competitive research alone can tell you a lot about your idea. 

• Is the marketplace too crowded?
• Is the solution you have in mind not really needed? 

Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability, and you can paint a pretty clear picture of your business’s potential.

Document your strategy and goals

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

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

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. 

So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can keep it up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

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

Better manage your business

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

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

What should your business plan include?

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

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover:

• The problem you’re solving
• A description of your product or service
• Your target market
• Organizational structure
• A financial summary
• Necessary funding requirements.

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

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. 

Lastly, outline the steps or milestones you’ll need to hit to launch your business successfully. If you’ve already achieved some initial milestones, like taking pre-orders or early funding, be sure to include them here to further prove your business’s validity. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the industry’s overall state and potential, who your ideal customers are, the positioning of your competition, and how you intend to position your own business.

This helps you better explore the market’s long-term trends, what challenges to expect, and how you will need to introduce and even price your products or services.

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

Marketing & sales

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

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

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

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history.

Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

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

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

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

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

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

Types of business plans explained

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

Traditional business plan

The tried-and-true traditional business plan (sometimes called a detailed business plan ) is a formal document meant for external purposes. It is typically required when applying for a business loan or pitching to investors. 

It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual. 

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

Business model canvas

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

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update and much easier for you, your team, and anyone else to visualize your business operations. 

The business model canvas is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

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

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. 

A one-page business plan is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Growth plan

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

It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . 

However, it’s even easier to convert into a more detailed business plan thanks to how heavily it’s tied to your financials. The overall goal of growth planning isn’t to just produce documents that you use once and shelve. Instead, the growth planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.

It’s faster, concise, more focused on financial performance, and ensures that your plan is always up-to-date.

How can you write your own business plan?

Now that you know the definition of a business plan, it’s time to write your own.

Get started by downloading our free business plan template or try a business plan builder like LivePlan for a fully guided experience and an AI-powered Assistant to help you write, generate ideas, and analyze your business performance.

No matter which option you choose, writing a business plan will set you up for success. You can use it to test an idea, figure out how you’ll start, and pursue funding.  And if you review and revise your plan regularly, it can turn into your best business management tool.

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Posted in Business Plan Writing

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