nature of the product in business plan

How to describe your product and service in a business plan like a pro

It’s deceiving.

You’d think that this part of a business plan does exactly what it says on the tin–describe your product & service offering– right ?

And yes, you are partially right. 

But there’s a very specific way in which this description should be written to make sure that your business has the best chance of succeeding – in real life and under the eagle eye of a potential backer (if you’re preparing a business plan for external financing purposes).

Keep reading to find out the secret sauce to writing a winning product and service description:

WHAT is the Product and Service Description in a Business Plan?

This business plan section is also known as:

• Product and/or Service Overview

HOW Do You Write a Product and Service Description in a Business Plan?

So, what should a good product/service overview contain?

Here are some items to consider including into this section:

1.     Portfolio:

The range of products and/or services that a business offers to potential and current customers.

2.     Features and benefits (value proposition):

Explain what the product/service does and how it works.

3.     Problem and solution (value proposition cont.):

The problem(s) the product or service solves. Every business needs to solve a problem that its customers face. Explain what the problem is and how the product or service solves it.

4.     Innovation:

If the company is doing something new and different, explain why the world needs the innovation.

5.     Proprietary advantages:

Any proprietary features that contribute to a competitive advantage. This could include: intellectual property (e.g., copyright, trademark, patent filings, trade secret), exclusive agreements with suppliers or vendors, exclusive licenses (e.g., for a product, service or technology), company’s own research and development activities.

6.     Development stage:

Current stage of development of the product / service (e.g., idea, development, testing, prototype, already on the market).

7.     Product life-cycle:

Estimate the life span of the product or service.

Specify whether the product or service under consideration is a short-lived fad or has a long-term potential.

8.     Future:

Mention plans for changes and new additions to the current portfolio of products / services.

Describe any plans to move into new markets in the future (e.g., serving different types or sizes of customers, industries, geographic areas).

Make your best guess at when the business will be ready to address these markets and what it needs to do first to be ready.

9.     Limitations:

If applicable, explain any risks or limitations associated with the product (e.g., liability issues like guarantees or returns), along with any legal advice received regarding these issues.

10.  Visual aids:

Use photos, images, diagrams and other graphics to help the reader visualize and learn about the products / services.

If the business is tackling several distinct problems through different products / services, describe the solutions individually .

However, for a large line of products / services, there is no need to list each one, just identifying the general categories will suffice.

How LONG Is the Product and Service Chapter of a Business Plan?

This part of a business plan can be very short, just a couple of paragraphs, or it can spread over multiple pages, depending on how many products/services you offer and how much explanation they require.

If your products or services are particularly complex , technical , innovative , or proprietary , you will want to provide more information and spend considerable time describing them.

This is especially true if you are seeking funding for a new product or service, particularly one that is not immediately understandable to the business plan readers, and if potential funders are likely to be motivated by the specifics.

In any case, when describing a product or service, provide just enough information to paint a clear picture of what it is and does . A brief explanation of what you will be making, selling or doing is appropriate here.

Excessive detail makes this section cumbersome for a reader to wade through. Reserve detailed descriptions (e.g., production processes) for the Appendix.

In any case, it is a good idea to first summarize the value proposition of each product or service into a one short sentence, and only then continue with a more detailed description of the product or service.

If any images or graphics are available that would contribute to the understanding of the product or service, the writers of a business plan should use them.

Otherwise, include any product or service details , such as technical specifications, drawings, photos, patent documents and other support information, in the Appendix section of the business plan document.

TOP 4 TIPS for Writing a Product and Service Overview

Tip #1: features v. benefits.

Don’t just list the features of the product / service.

Instead, describe the specific benefits it will offer to customers – from their perspective.

Make it clear what your customers will gain through buying your product or service. Include information about the specific benefits of your product or service – from your customers’ perspective.

Features are not the same thing as benefits. And you need to understand both.

Confused? Let’s clarify:

What Is the Difference Between Features and Benefits?

Tip #2: problem v. solution.

If at all possible, present the information in the Problem >> Solution format.

Start by describing the key problem that your customers have, immediately followed by the solution with which you will address this need for your target market.

Tip #3: Competitive Advantage

You should also comment on your ability to meet consumers’ key problems or unmet needs in a way that brings your product or service advantages over the competition.

For example:

• If you have a common business, such as a restaurant:

Explain why your customers need your particular restaurant. Do you offer lower prices? More convenient hours? A better location? A different concept, such as a vegan ice-cream pop up store? A specialty that is not otherwise available in your area, such as a Peruvian ceviche or Hungarian goulash?

• If your company is doing something new and innovative :

What is it about the existing solutions that is subpar? Maybe you are improving on a mediocre product category, such as creating better medical uniforms for healthcare workers (e.g., more flattering cut, trendy designs, sustainable materials). Or perhaps your new blockchain solution has the potential to entirely eliminate the middle-men in an entire industry.

Although the subject of competitive advantage regarding the business as a whole will be fully explored in the Market and Competitor Analysis part of a business plan, it is advisable to touch on it here also – in the context of the company’s products and service.

Tip #4: Validating the Problem and Solution

Speaking of which, when you are doing market research and analysis for your business plan, remember to validate the problem and solution your product or service is addressing.

There is a plethora of minor issues out there that people are perfectly fine with just tolerating. To build a solid business, though, you need a problem that a sufficient number of people are motivated to solve. That is, that they recognize it as a problem that’s worth paying you to solve. Even if they didn’t realize it was solvable until they were presented with your solution.

So, how do you get evidence that prospects are willing to pay for your solution?

Validation of Problem

Describe what you’ve done so far to confirm that the problem you are focused on is a real problem for your customers.

• Existing Business:

For an established business, this is probably just a matter of recapping your success in the marketplace. Your customers have already voted with their wallets.

• New Business:

For a startup, it is important to survey and have conversations with as many potential customers as possible about where they are having problems, how they solve them today, and validate that they are interested enough in addressing those problems to pay for a good solution.

Validation of Solution

Describe how you have tested your ideas with existing or potential customers to confirm that there is a good market for the products or services you plan to offer. Summarize the positive customer feedback or market traction that you have achieved with your solution so far.

For an established business, the answers probably lie in your paying customer base – their existence itself, combined with their repeat business, word-of-mouth referrals, follow-up customer surveys, and other indicators of customer satisfaction.

For a new business, you can start validating your solution immediately by trying it out with potential customers, even informally or at no charge, to get their opinion. If your product or service does not exist yet, talk to prospects about what you plan to offer and measure their feedback.

In summary, this section should answer the million dollar question:

What makes you think that people will buy, be satisfied with, and recommend your products or services?

Related Questions

What are products and services.

Products and services are items that businesses offer for sale to a market. While services are intangible, meaning that they do not exist in a physical form, products are of tangible nature, in other words – you can touch them.

What is a Product Line?

Product line is a group of related products that are all produced or sold by one entity and typically marketed under one brand name.

What is a Service Line?

Service line is a group of related services that are all produced or sold by one entity and typically marketed under one brand name.

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Products & Services Section in a Business Plan (+ Examples)

• March 21, 2024
• Business Plan , How to Write

In this blog post, we’ll guide you through writing the products and services section of your business plan. We’ll cover how to describe what you’re selling and why it’s important in your business plan.

Whether you’re launching a new startup or creating a business plan for an existing business, this section is crucial for showing the value you bring to customers. Let’s get started!

Why do we include them in a business plan?

The products and services section of a business plan is more than just a list of what a company sells; it’s a vital narrative that tells the story of the business’s core offerings and their significance to the market.

This section is paramount for readers (especially potential investors) to grasp the essence of what the business is about, the unique problems it solves, or the specific needs it addresses.

A meticulously crafted products and services segment does much more than describe offerings. Indeed, it lays the groundwork for comprehensive marketing strategies , informs operational planning, and financial projections.

Moreover, understanding the business’s offerings in depth enables stakeholders to envision the company’s value proposition and competitive edge.

Where should you include them?

In a business plan, the Products and Services section is typically included within the business overview section.

This allows you to first introduce the business model and what it offers to customers. Only after this you can provide more details of the products and services.

The Products and Services section should clearly detail what you are selling, highlight the unique value proposition . It should also ideally explain how it meets the needs of your target market if it isn’t obvious. T

What to include: 2 Examples

Begin with a clear, engaging description of each product or service you offer. For services, describe the process, customer experience, and outcome. For products, discuss the materials, technology, and any unique features.

Services example: a Cryotherapy business plan

Products example: a Brewery business plan

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How to Write the Business Plan Products and Services Section

Get tips on writing the products and services part of your business plan

• The Products and Services Section
• What to Include
• Tips on Writing the Section

The products and services section of your business plan is more than just a list of what your business is going to provide. This section of your business plan should include details about how you'll price products and services, how you'll fulfill orders, and other details that investors need to hear before you can get funding . Learn more below.

Key Takeaways

• Business plans include details about products and services you'll offer, including exactly how you plan to market, sell, and deliver on customer orders.
• The best business plans are clear and concise.
• The products and services section of your plan should show off why your product or service is needed.
• The products and services section should also convey the expertise and experience you have to succeed.

Why You Need a Products and Services Section in a Business Plan

The business plan products and services section is the centerpiece of your plan. While other sections of your business plan are important, the products and services section is the essence of your business and the point around which every other part of the business plan is built .

What to Include in a Products and Services Section

The products and services section of your business plan outlines your product or service, why it's needed by your market, and how it will compete with other businesses selling the same or similar products and services.

Your products and services section should include a description of the products or services you are offering or plan to offer (including future products or services). You should explain how your products and services will be priced and a comparison of the products or services your competitors offer in relation to yours.

You should also include the sales literature you plan to use. Detail your marketing materials, and clarify the role your website will play in your sales efforts.

The products and services section will include a paragraph or so on how orders from your customers will be processed or fulfilled, as well as any needs you have to create or deliver your products, such as up-to-date computer equipment. If your process depends on intellectual property or legal issues, such as trademarks , then those need to be addressed.

Tips on Writing the Products and Services Section

This section of your business plan should excite those you're hoping will fund your business or work with you. To that end, here are a few tips to create a products and services section that appeals to the reader.

Indicate Why Your Product or Service Is Needed

Especially if you're venturing into a new concept or invention, or a place where there is no current market, you need to explain the need for your product or service.

Highlight the Features of Your Product or Service

A crucial part of business success is the ability to set yourself apart from other businesses that sell the same or similar products and services. What features, such as price point or level of service, do you offer that are unique to you?

Focus on Benefits

Unique features are important, but even more vital is how those features provide value to consumers. Translate your features (i.e., faster or cheaper) into benefits (i.e., get it now or save money). The goal is to highlight how your product or service will fix a problem or improve a client or customer's life.

Be Clear and Concise

Don't let your business plan get bogged down in too much description and information. Use bullets or numbered lists to quickly and easily highlight important information.

Show Off Expertise, Experience, and Accolades

You not only want to describe your products and services but also share why you're the best person to provide them. Include anything in your education or experience that makes you an expert in this business. If you have testimonials, awards, or endorsements, share those. Finally, if you've applied for a patent, copyright, or trademark, include that as well.

Be the Expert, But Use Layman's Terms

You should know your product, service, and industry well, but don't expect your potential funders and partners to have the same level of knowledge. Assume the reader doesn't know as much as you when you explain what you're offering.

Avoid acronyms and jargon when outlining your products and services.

Indicate What's Special About Your Products or Services

Will you be offering a special guarantee or refund policy? Do you have a quicker or more unique way of delivering your product or service? 

Speak to Your Customer

While you don't want to write an advertorial, you do want to be customer-oriented when you write your products and services section.

Examples of a Products and Services Section

The Small Business Administration offers business plan examples that you can draw from to help guide your writing. Here's an example of a products section for someone creating "Wooden Grain Toys."

Wooden Grain Toys will sell wooden toys made from solid hardwoods (maple, beech, birch, cherry, and oak) and steel rivets. The toys are handcrafted and designed for small children to easily use. Our line currently includes the following nine models:

• All-Purpose Pick-Up Truck w/movable doors and tailgate
• Dump Truck w/functioning dumping mechanism and box
• Biplane (two-seater) w/movable propeller
• Steam engine with coal tender - additional cars available separately: caboose, flat car w/logs, box car, tank car, coal car
• Flat-Bed Truck w/logs

Wooden Grain Toys will offer its products for the following prices:

• All-Purpose Pick-Up Truck w/movable doors and tailgate - $25
• Dump Truck w/functioning dumping mechanism and box - $30
• Biplane (two-seater) w/movable propeller - $20
• Additional train cars (single car) - $5
• Additional train cars (three cars) - $12
• City Bus - $12
• Tow Truck - $18
• Flat-Bed Truck w/logs - $35
• Sports Car - $20
• Sedan - $20

What Is Product and Service in a Business Plan?

A products and services section of a business plan clarifies exactly what your business will produce , how much it'll sell for, and other details along those lines.

What Are Examples of Products and Services?

A product or service can be anything a business creates to turn a profit. Some businesses have both products and services. For example, a restaurant's services include cooking for and serving customers. The restaurant's products are the dishes and drinks it creates.

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How to Describe your Product in a Business Plan

The product or products your business intends to produce or offer will have to be described in the product description section of your business plan. This section of your business plan is meant to explain how your product will stand out from comparable items in the market.

You have to clearly explain its concept, coupled with all aspects of purchasing, manufacturing, packaging, and distribution. You should also identify your suppliers, costs, and how the product you are offering fits into the current market.

Note that the product description in your business plan is more than a simple listing of product features. In this section, you will need to highlight your product’s most unique characteristics that will ensure it stands out in the marketplace and attract buyers who won’t mind paying your price.

Note that a properly written product description in your business plan can entice investors and help your business grow. Make sure you describe what you are offering in layman’s terms, to guarantee that someone who isn’t conversant with your business will grasp and be excited about it.

It may also be necessary to provide some basic background if this is an area or industry that people are not so familiar with. While you write up the Products and Services description section of your business plan, always keep your reader in mind.

What to Include in the Products and Services Description Section of Your Business Plan

Just as was noted above, the products and services section of your business plan will have to explain in detail your product or service, its demand in your market, and how it intends to compete with other businesses selling the same or similar products or services. Nonetheless, the product and services description section of your business plan is expected to include:

The Product or Service Description

It is important the product description section of your business plan clearly explains the concept of your product, coupled with all aspects of purchasing, manufacturing, packaging, and distribution. What are your product and service, and how does it work? How will this product benefit your customers? How do you plan to make it or how do you intend to get it made?

Product Comparison

This section of your business plan will also have to explain how your product compares with similar products in the market. What makes this product or service unique or better than what’s already obtainable in the market? Why would anyone prefer your product or do business with you?

You will need to describe how and why you are competitive. How do you stand out, and why do your business and everything it offers have such a viable chance at succeeding? In talking about your product or service, always try to answer why a client would want it and how it can make their lives better or more profitable?

Accreditations/Intellectual Property

For businesses that have had their product tested by industry experts, you must include this information when describing your product. Don’t forget to highlight any certifications, trademarks, copyrights, or patents.

Have it in mind that these added advantages or achievements can give you and your product an upper hand. Verified patents and trademarks can also heighten the value of your product especially since it shows that only your company can manufacture the product for the life of the patent.

Have it in mind that a product’s life cycle includes the idea, prototype, and expansion stages. If you are still in the idea stage, you must buttress in your description how you intend to get the product made and why your product matters.

If you maybe already have a prototype, outline your plans for evaluating the prototype and manufacturing your product. If your business has been making the product but is looking to expand to keep up with demand, ensure you explain this when describing your product in your business plan.

You will also want to include the cost of your product and how that cost aligns with other comparable products on the market. In very concise detail, explain how you came to this price, including the cost to manufacture, selling price, and profit margin.

Sales and Distribution Strategy

Also, take your time to explain how and where you will sell your product. Have in mind that your options may include online stores, brick-and-mortar locations, and vendors. If you already have vendors selling your product, ensure to note who they are and their locations in this section of your business plan.

Fulfillment

When describing your product in your business plan, it is also important you describe your plan to ensure your product gets to the intended customers. This should include manufacturing details and delivery specifics. If you plan to outsource the production of your goods, don’t forget to note manufacturer specifics such as location and production time. Also, remember to include the approximate delivery times and methods.

Requirements

Will you require any special equipment or technology to provide your product or service? Also explain if any specialized technology, materials, or equipment will be required to manufacture your product.

You will also have to explain your plans for product development and introduction especially as your business grows.

Photos or Brochures

Also, make sure that your potential investors can get a good insight into your product through photos and brochures. Don’t forget that your business plan is expected to have an appendix for photos and brochures. Also, don’t forget to refer to them in the product description section.

Tips for Writing a Product Description

To ensure you describe your product thoroughly, here are some vital tips to guide you;

• Always remember the reader. The product description section of your business plan must note your product’s most vital information. Always remember to make this section very easy to read and understand. Consider making it better by leveraging numbered lists and bullets.
• Focus on benefits. When describing your product, you must explain how its features can provide value to consumers. Translate your features into benefits, and remember that the aim is to describe how your product or service will be a solution to a problem or improve a client or customer’s life.
• Highlight the features of your product or service. To attain substantial success in any business, your business will need the ability to set itself apart from other businesses that offer or sell the same products and services. Take your time to analyze key features, such as price point or level of service, or anything that makes your product unique in the market.
• Show off a little. Don’t forget that you are selling a product and also selling yourself as the most viable provider of that product. Ensure to include all vital educational or industry-specific experiences and awards in this section. If you have endorsements or testimonials specific to your product, include them as well.
• Show the need for your product. Also make sure you explain how your product will cater to a need or improve life, showing why your product is very necessary to the consumer. This is very pertinent if your product has no current market.

The product and services description section of your business plan is meant to provide the reader with an explicit understanding of why you are in business, what you sell, how you will compete with what’s already available, or how you intend to fill a niche that no one else is currently meeting. Noted above are things you need to consider when creating the product description section of your business plan to ensure that it will indeed grab your readers’ attention.

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Write Products and Services Section of a Business Plan

Free Product & Service Description Worksheet

Ayush Jalan

• January 3, 2024

The core purpose of any business is to sell its offerings to its target customers.

To do this, you devise a plethora of strategies, tactics, and plans. While that is important, your sales ultimately depend on the value you provide to your customers through your products and services.

FYI, we have used the term “product” in this article to refer to both products and services unless mentioned otherwise.

Table of Contents

What is a Products & Services Section?

• What’s Included in the Products & Services Section
• 6 Tips on Writing a Good Products & Services Section

The products and services section of your business plan is where you mention and elaborate on your product range, product descriptions, pricing strategies, and other relevant details.

If you’re looking for partners or investors, this section plays a crucial role in persuading them. What you include in this section and how you write it can deeply impact whether or not your investors will seal the deal with you.

What’s Included in the Products and Services Section

In the products and services section of your business plan, you provide an overview of what you offer. Here are all the key elements your products and services section should cover:

1. Description

In this part, you include all the important details of your offerings. To write an accurate description, you can use the 5W2H method and answer these questions:

• Who can use this product? Mention the details of your ideal customer.
• What are the fundamental aspects of your product? These may include features, materials, ingredients, costs, dimensions, etc.
• When should someone use this product? Mention the occasion, or the season if it’s a seasonal product. You can also mention if it is designed for a specific purpose.
• Where should your customers use the product? Is it used indoors or outdoors? Specify these details.
• Why should your customers use your product? Mention how the product fulfills their needs.
• How should they use your product? Mention if there are any important user instructions.
• How much should they use it? Mention the ideal frequency of usage that’s essential to follow while using the product.

2. Pricing Procedure

A pricing strategy refers to the tactics you use to set a price for your products and services. There are several pricing strategies to choose from; you can pick the one that best fits your business model .

There are several things to consider before setting your price. Conduct a price analysis to get an idea of which pricing strategy works for you. Here are the steps involved in conducting a pricing analysis:

Determine cost of goods sold ( COGS ):

To calculate the total cost of your products and services, add all the expenses that you incurred before the sale. This will include costs such as manufacturing, labor, warehousing, distributing, packaging and labeling, marketing, etc.

Collect data about the price preferences of your customers:

Study your competitors’ prices:, consider all the legal and ethical aspects:.

After conducting a pricing analysis, you can look at these pricing strategies to choose one for your business.

3. Product Comparison

Regardless of what you’re selling, chances are someone in the market is already selling it. Unlike direct competitors, indirect competitors are those who sell similar products with slight variations.

Looking at your competitors can help you draw a comparison. To do that, examine their products and services and list down the similarities and differences.

Categorize this information into qualitative and quantitative aspects and organize it in tables. Finally, summarize it by including your advantages over competitors. Also, include how you will leverage them to balance your drawbacks.

4. Sales Literature

Sales literature refers to the promotional and informative materials you use to inform, clarify, and convince your customers to make buying decisions. These include brochures, catalogs, newsletters, price lists, customer testimonials, and case studies .

List out all the sales literature you use or plan to market your products and services; explain the information it conveys in brief. Another integral part of your sales literature is your website; explain how it contributes to your sales.

Perhaps you run a blog to promote your products and inform your customers about new releases. Maybe you sell your products and services directly from your website; in that case, your sales literature material will go there.

Sales literature is a quick and attractive tool to market your products and services.

5. Order Management

Order processing refers to the stages from the moment a customer places an order to the delivery of the product paired with after-sales services. Here, you explain how customers will order or buy the product and the delivery process.

For instance, if you are an online retail store , your order processing may include these stages:

• Order Placement
• Order processing
• Picking inventory
• Product Delivery
• Customer support

Depending on your offerings, your order processing workflow can have several stages. Describe each step and provide elaborate details about the execution.

6. Delivery Requirements

If the delivery or creation of your products and services needs any resources, you mention them here. These include equipment, vehicles, technology, and software.

For instance, a cafe owner will need kitchen equipment and IT solutions to run and provide its services. These should be mentioned in this part of the products and services section.

To cite another example, a consumer electronics company needs an IT infrastructure and production facility to create its products. For delivery, it needs vehicles and an online portal for customers to place and receive orders. All these are mentioned here.

7. Intellectual Properties

Mention all the IP documents that are related to your products and services. These include trademarks, seller permits, patents, other licenses, etc. Here you can also include any legal issues you are currently facing. Explain how you are dealing with the existing issues.

Further, mention the issues that might occur in the future and the counteractive measures you will take to prevent them. These include adding safety labels, and disclaimers, opting for insurance policies, etc.

8. Future Offerings

This is a chance to impress your investors or partners by briefing them about your future products or services. This shows that you’re already working on new ideas which help convey your potential and dedication.

If your future products are an extension of your current ones, you can rodenticide an outline of the improvements made. Mon whether your future products are under development or ready for launch.

6 Tips on Writing a Good Products and Services Section

1. Opt for a customer-centric approach:

Your goal is to cater to the needs of your customers through your products or services. Hence, write as if you are talking to your customers and directly addressing their issues. Point out how your product will make their lives better and easier.

2. Keep it simple:

Clearly represent the information. You can use bullet points and lists to convey your message. You can also use tables and charts to display product comparisons, strengths, etc.

3. Ditch buzzwords and industrial jargon:

Everyone who reads your business plan may not understand the industrial jargon and buzzwords. Therefore, it is best to skip the complicated lingo and use layman’s terms.

4. Specify market pain points:

Elaborate on the problems your target audience is facing. You can gather this data by conducting a market analysis. Mention the various pain points and the features of your product that address them. Consider citing examples and relevant statistics to display how your product solves a customer problem .

5. Emphasize your USP:

Highlight the benefits and the unique features of your products and services. Mention the things you do differently than your competitors and how you offer more value in comparison.

6. Flaunt your achievements:

Make sure to show off the business milestones you’ve achieved such as awards, news articles, customer reviews, etc. You can also include your past sales numbers, your customer base, and the projects you fulfilled. These instill trust and help investors, clients, and partners to make decisions.

Persuade Interest with a Products and Services Section

Products and services are the lifeblood of your business. An accurate representation of your offerings is crucial to scoring funding and demonstrating your potential to grow in the market.

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About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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Popular Templates

How To Write the Products and Services of a Business Plan

Crucial to business plans designed to secure funding or partnerships, your products and services section needs to showcase the quality, value, and benefits your business offers.

It’s not just a list of what your business is going to produce or provide. Instead, it outlines what you make or do, why your market needs your products or services, how you will compete with other companies selling the same or similar products or services, and what you will charge.

What To Include In The Products and Services Section

When looking at how to write the Products and Services section of your plan, be sure to include:

• A description of the products or services you offer or plan to offer
• A pricing model for your products or service, including how you set your prices and how you will make a profit. Include a breakdown of your Costs of Goods (COG) and Costs of Services (COS), what your contingency plan is in the event of a shift in market conditions, changes to laws, or availability of supplies, and your markup strategy.
• A comparison of your competitors’ products or services against yours, including a survey of what your competitors charge for similar items, along with a discussion explaining your pricing strategy
• Any sales literature or marketing materials you will use, including your website’s role in your sales efforts.
• An outline of how your orders will be processed or fulfilled.
• Any needs required to create or deliver your products (for example, up-to-date computer equipment)
• Any intellectual property (trademarks) or legal issues needing to be addressed.
• Future product or services

How to Make The Products & Service Section Appealing

Ideally, this section should elicit excitement in your reader and entice them to fund your business or work with you.

Here are few ways to accomplish this when deciding how to write the Products and Services section of your business plan:

• Showcase why there is a need for your product or service. Doing so is especially important if you’re introducing a new concept or invention or introducing your product or service into a place where there is currently no market for it.
• Emphasize the features of your product or service. How does it differ from that of your competitors in terms of make, shape, form, or appearance? Or price point? Or the level of service? What makes it unique?
• Focus on benefits. Once you’ve identified what features make your product unique, it’s vital to show how those features provide value to consumers. Is your product cheaper? Is your service faster? You want to clearly indicate how your product or service will fix a problem or improve a client or customer’s life.
• Be clear and concise and talk in layman’s terms. Avoid getting bogged down in lengthy descriptions or unnecessary details. Use bullet points and numbered lists to highlight important information. Don’t assume that your potential funders, partners, or customers have the same level of knowledge. Instead, consider the reader doesn’t know as much as you do when explaining your offering. Stay away from acronyms, jargon, industry buzzwords, and aim to be customer-oriented. If you have to use acronyms or jargon, always provide a definition.
• “ Why are you the best person to provide your products and services?”
• “What education or experience do you have that makes you qualified to provide them?”

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Don’t forget to include any testimonials, awards, or accolades you’ve received as well as any patents, copyrights, or trademarks you own or have applications for. Have you had the product tested or certified? Gotten approvals from industry experts? Including these details adds credibility to your overall business plan.

• Identify any liability issues: A liability lawsuit can significantly change the landscape of your business. Even if you don’t foresee any liability issues, include a statement to that effect rather than not address it at all. If there is a liability issue, real or apparent, acknowledge it and describe how you’ll deal with it. Let the reader know you will take all necessary steps to protect your business, your products, and yourself from litigation.
• Be precise in your product or service descriptions. For example, you don’t want only to say, “I sell shoes.” You want instead to say, “I sell leather boots targeted at women aged 16 – 25 who buy online”. Wherever possible, also include pictures of your products.

Questions to Answer in Your Products & Services Section

• Are your products or services in development or existing and on the market?
• If they currently aren’t on the market, what is the timeline for bringing them to it? Do you have a prototype?
• What makes your product or service different? What are your competitive advantages? What are your competitive disadvantages, and how will you overcome them?
• Is your pricing an issue? Are your operating costs low enough to allow for a reasonable profit margin?
• Where are you acquiring your products? Do you manufacture them, or do you assemble them using third-party components? Do you purchase from suppliers or wholesalers? If demand increases, do you have a steady supply of products available?
• How are you going to sell your product or service? Will it be available online or in retail stores? Do you have any vendors lined up?

Once you’ve answered these questions, stop and reread the section. Ask yourself if you’ve tried to answer why a client would want your product or service. Consider whether your offering will make your customers’ lives better or more accretive.

Examine the need you are fulfilling or the problem you are solving. More importantly, does the section give the reader a clear understanding of why you’re in business, what you sell, and how you differ from your competitors?

After completing this exercise, if you’re still unsure or would like more support about how to write the Products and Services section of your business plan, we invite you to reach out to our team at Bsbcon.

We are available to help small-medium-sized enterprises worldwide tackle their most critical challenges and capture their most significant opportunities.  We make a point to understand new trends, digital options, and partnerships that help our clients today and tomorrow. Call us toll-free at 1(888) 880-1898, write [email protected] , or fill out our contact form here .

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Business Plan Section 4: Products and Services

To give others a clear understanding of the value your product or service provides, read about 11 important things to include in this section of your plan.

This is the part of your business plan where you will describe the specific products and services you’re going to offer. You’ll fully explain the concept for your business, along with all aspects of purchasing, manufacturing, packaging, and distribution. You’ll go over suppliers, costs, and how what you’re offering fits into the current market and stacks up against your competitors.

How do you write the Products and Services section of a business plan?

While your product may be technical, don’t get caught up in complicated industry jargon. Explain and describe what you’re offering in layman’s terms, so someone who isn’t familiar with your business will understand and be excited about it. It may be necessary to give some basic background if this is an area or industry people are unfamiliar with.

While you write up the Products and Services section of your business plan, keep your reader in mind. Things that you might take for granted or know inside-out might not be common knowledge to potential lenders or investors. As you write, avoid being too technical, assuming too much knowledge from your readers, and using buzzwords.

You don’t want to come off as condescending, but you do want to make sure everyone understands what you’re talking about. To see if you’ve succeeded, have some trusted people who aren’t in your industry proof-read this section for you, and ask them to explain your product or service in their own words, along with the benefits to using them.

Here are the points you want to write up in the Products and Services section of your business plan:

The Product or Service Description

What is your product and service, and how does it work? How does it benefit customers? How do you make it or how will you get it made?

Product Comparison

What makes this product or service unique or better than what’s already available in the market? Why would someone choose to buy your product or do business with you over someone else?

Accreditations/Intellectual Property

Have you had the product tested or certified? Gotten approvals from industry experts? Did you trademark, copyright, or patent your product ? These can add substance and credibility, so be sure to mention them.

Where are you currently with this product or service? Is it in the idea stage or do you have a prototype? Have you produced some and are looking to expand? Have you started offering this service already or are you still in the planning stages ?

How much will you charge for the products or services you’re offering? Where does this fit in with what’s currently available?

Sales and Distribution Strategy

How will you sell it? Will you market it online or in retail stores? Have you lined up any vendors? How will you distribute it or deliver the service you’re providing?

Fulfillment

How will you fill orders or deliver the service? Will you manufacture items yourself or outsource to someone else? Who will handle distribution, and how?

Requirements

Will you need any special equipment or technology to provide your product or service?

Do you envision future products or services as an extension of the business once it’s successfully launched?

Photos or Brochures

It’s beneficial to include a visual representation of your offering. Photos or brochures would generally get put in the plan’s appendix, but you would refer to them in this section.

How Do You Stand Out?

Perhaps most importantly, emphasize how and why you are competitive. How do you stand out, and why does this business have such a terrific chance at succeeding? In talking about your product or service, always try to answer why a client would want it. How will your offering make your customers’ lives better or more profitable? What need are you fulfilling or what problem are you solving?

To sum up, the product and services section of your business plan gives the reader a clear understanding of why you’re in business, what you sell, how you compete with what’s already available, or how you fill a niche that no one else is meeting.

Next > Business Plan Section 5: Market Analysis

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

Noah Parsons

24 min. read

Updated May 7, 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

Free business plan templates and examples

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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
• Templates and examples

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First Steps: Writing the Product Section of Your Business Plan This quick guide offers tips that will help you create the product section for your business plan.

By Entrepreneur Staff Jan 4, 2015

In their book Write Your Business Plan , the staff of Entrepreneur Media, Inc. offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors discuss what details you should include in the product section of your business plan.

Every business has something to sell, and the product section of your business plan is where you tell readers what it is you're selling. (For simplicity's sake, the term "product" is used to refer to both products and services unless otherwise indicated.) This is clearly a very important section of your plan. Business is about providing people with something they need. Your business should solve a problem, make life easier, expedite a process or even simply entertain, but you need to be selling something to have a business.

In your plan, it's important to be able to build a convincing case for the product or service upon which your business will be built. The product description section is where you do that. In this section, describe your product in terms of several characteristics, including cost, features, benefits, distribution, target market, competition, and production concerns.

Let's talk about two of these characteristics in more detail. Features describe the make, shape, form, or appearance of a product, the characteristics that you use to describe products. These features convey benefits to the customer. Benefits (perceived benefits) are the emotional or other end results that your product or service provides that customer, the satisfaction or fulfillment of needs that a customer receives from your products or services. In the famous phrase "My factories make cosmetics, we sell hope," cosmetics are the products, hope is the benefit.

Here are a few sample product descriptions:

Street Beat is a new type of portable electronic rhythm machine used to create musical backgrounds for street dances, fairs, concerts, picnics, sporting events, and other outdoor productions. The product is less costly than a live rhythm section and offers better sound quality than competing systems. Its combination of features will appeal to sports promoters, fair organizers, and charitable and youth organizations.

Troubleshooting Times is the only monthly magazine for the nation's 6,000 owners of electronics repair shops. It provides timely news of industry trends, service product reviews and consumer product service tips written in a language service shop owners can understand.

HOBO, the Home Business Organization , provides business-consulting services to entrepreneurs who work out of their homes. The group connects home-business owners with experts who have extensive experience counseling home-business owners in management, finance, marketing and lifestyle issues. Unlike entrepreneurial peer groups, which charge members for attending sessions whether or not they receive useful advice, HOBO will guarantee its services, asking home-business owners to pay only if they derive solid benefit from the service.

A business plan product description has to be less image-conscious than an advertising brochure but more appealing than a simple spec sheet. You don't want to give the appearance of trying to dazzle readers with a glitzy product sales pitch filled with a lot of hype. On the other hand, you want to give them a sampling of how you are going to position and promote the product.

A business plan product description isn't only concerned with consumer appeal. Issues of manufacturability are of paramount concern to plan readers, who may have seen any number of plans describing exciting products that, in the end, proved impossible to design and build economically.

If your product or service has special features that will make it easy to build and distribute, say so. For instance, the portable rhythm machine maker should point out in the business plan that the devices will be constructed using new special-purpose integrated circuits derived from military applications, which will vastly increase durability and quality while reducing costs.

Liability Concerns

To a typical consumer who's purchased their share of shoddy products from uncooperative manufacturers, it's encouraging to hear about a multimillion-dollar settlement of a consumer's claim against some manufacturer. It provides proof that the high and mighty can be humbled and that some poor schmuck can be struck by lightning and receive a big fat check.

To manufacturers and distributors of products, however, the picture looks entirely different. Liability lawsuits have changed the landscape of a number of industries, from toy manufacturers to children's furniture retailers.

Dealing with liability issues may be as simple as merely including a statement to the effect that you foresee no significant liability issues arising from your sale of this product or service. If there is a liability issue, real or apparent, acknowledge it in your plan and describe how you'll deal with it. For instance, you may want to take note of the fact that, like all marketers of children's bedroom furniture, you attach warning labels and disclaimers to all your products and also carry a liability insurance policy. Let it be known that you will take all necessary steps to protect your business, your products, and yourself from litigation.

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Nature of a Business Plan: Everything You Need to Know

The nature of a business plan discusses what the future of the business is. It should list how you plan to run the company and what you plan to do with it. 3 min read updated on February 01, 2023

What Are the Parts of a Business Plan?

Even if you just write on an envelope a few ideas about your business strategy, you've started a business plan. Business plans can be helpful, as they list all the tasks necessary to run a company. Entrepreneurs use them to explain their vision to possible investors. These plans can be used by firms that want to attract important employees, find potential business prospects, handle suppliers, and understand how to better manage their companies.

Items to include are the industry, the business concept, the business structure, what the service or product is, and what your marketing plan is in order for the company to be successful.

The marketplace section will talk about defining and analyzing possible customers. This includes where and who they are, what drives them to buy, and so on. The financial section includes your cash flow and income statement, a balance sheet, and additional financial ratios, including break-even analyses. You may want to invest in an accountant and a spreadsheet software program for this. There are seven main components in a business plan, including:

• Market strategies
• Business description
• Executive summary
• Development and design plan
• Competitive analysis
• Financial factors
• Management and operations plan

How Long Should Your Business Plan Be?

A helpful business plan can be short or long, depending on the reason you're creating it. It can be anything from a scrawl on a piece of paper to a detailed plan that's over 100 pages long. The average business plan runs between 15 and 20 pages, but there's room for variation. If your concept is simple, you might be able to define it with only a few words. If you're talking about a new business or industry, you'll need a much lengthier explanation to describe what your idea is.

What your purpose is will also define how long your business plan is. If you want to get millions of dollars to start a venture that's risky, you'll need to do plenty of convincing and explaining. On the other hand, if you use your plan internally to govern ongoing business, you can easily have a more abbreviated version of the plan.

Why Do Startups Need a Business Plan?

A traditional business plan writer is someone who considers themselves an entrepreneur and is looking for funds to start a new venture. Many successful companies originally started their plan on paper to convince investors they should put up capital to help them get started. There are many books on business planning that are aimed at the owners of startup businesses. This is because they're the least experienced and are likely the most appreciative of any help. However, small startups aren't the only companies that need a business plan.

Why Do Established Firms Need a Business Plan?

Not every business plan is written by an excited entrepreneur who is just starting their company. Many are written for and by companies that are well past the startup phase. For example, WalkerGroup/Designs was considered a well-established designer for large retailers. The founder thought of the idea of licensing and trademarking to apparel makers with the symbols 01-01-00. This was aimed at targeting the approaching millennium. Before the costly and difficult task of trademarking this around the world, the founder had a business plan that included sales forecasts. This was to convince larger retailers that it'd be smart to carry their 01-01-00 products.

Enterprises that are middle-stage might draft plans that help them get funding to grow their company similar to startups. However, they may be after larger amounts and looking for investors who will spend more. These enterprises feel it's necessary to have a written plan to manage their business that's already growing. This plan can be a helpful tool to get across their mission to potential suppliers, customers, and more.

If you need help with the nature of a business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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What Is a Business Plan?

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

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

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

Key Takeaways

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

Investopedia / Ryan Oakley

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

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

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

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

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

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

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

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

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

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

What Does a Lean Startup Business Plan Include?

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

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

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

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

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

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Plan Projections

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Home > Business Plan > Product and Technology in a Business Plan

Product and Technology in a Business Plan

… our product looks like this …

The Product and Technology

In this section, describe the current state of development of the product (concept, prototype, or market-ready), explain what further work needs to be done, and what skills you need if any, in order for it to be ready for the market place. Unless they are already obvious and apparent make sure that the uses of the product are explained to the investor.

Minimum Viable Product

A minimum viable product, often abbreviated to MVP, is a product with just enough features to see whether it will work in the real world. It is important for a startup business that the minimum viable product is low cost, can reach the customer quickly, and is effectively an early prototype of the final product, so that the customers can get an early indication of what the product is trying to achieve.

The idea of a minimum viable product is to rapidly build a minimum set of features into a product and release it onto the market to test customer reaction. The feedback obtained from the early adopters can then be used to adapt and improve the product. This process can be repeated in a loop until the product is fully developed.

The minimum viable product method is in contrast to the conventional method of bringing products to market. The conventional method incorporates the maximum number of features the customer might want, carries out market research and adapts the product, and then launches the product fully developed.

Intellectual Property

Intellectual property is an asset of the business and can be bought or sold like any other asset. It can be used for example, to earn royalties from licensing, create strategic alliances with other businesses, and to secure loans. Set out the intellectual property rights your business has.

A patent is a form of intellectual property right granted by the state which gives an inventor the sole right to make, use, sell, or dispose of their invention for a limited number of years. A patent protects the way products and processes work, how they are made, what they are made of, what they do, and how they do it. If the patented invention is infringed, then the owner can take legal action to try and stop others making, using, importing or selling the invention without their permission.

It should be noted that not all inventions are patentable as to get the intellectual property rights associated with patent protection, the invention needs to be new, have a non obvious inventive step, and be capable of being made or used in some form of industry.

Trademarks legally distinguish the products of one business from another and give protection for the name of the product using a distinctive symbol, logo, word, phrase or signature normally placed on a product, packaging, or advertisements. Registering a trade mark gives the business the exclusive right to use it, and another business using the same or similar trademark is said to have infringed the trademark and could be sued for damages.

A registered trade mark is identified by the letter “R” surrounded by a circle ® .

Design Registration

A design registration is a type of intellectual property right protecting the way an object looks, its shape, and visual appeal. A registered design can protect such things as color, shape, and texture. Registering a design gives the business the exclusive right to use it, and another business using the same or similar design is said to have infringed the design registration and could be sued for damages.

Copyrights protect material when it is written down or recorded. For example, copyright will protect music, films, books.

Presenting Product and Technology in the Business Plan

There is no set style for the product and technology section of the business plan, a few paragraphs together with bullet points should be sufficient to explain the product itself, what it does, and the technology behind it.

Keep the description of the product and technology as simple as you can and avoid technical jargon where possible. The amount of technical detail will depend on the nature of the product itself, but should only be included to the extent that it is needed to explain to someone who is reasonably familiar with the industry, why the product is innovative and viable.

This is part of the Financial Projections Business Plan Guide a series of posts on what each section of a simple business plan should include. The next post in this series is about the traction your business idea has.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Home » Business » Nature of Business Meaning – Examples & Types

Nature of Business Meaning – Examples & Types

• June 4, 2023

Business success and a positive trajectory depend on many external factors. These include market dynamics, level of competition strength and internal strengths and weaknesses. All choices made by a business, big and small, will impact the type of company it will become and what it looks like. This leads us on to the nature of business.

Table of Contents

What is the Nature of a Business?

The nature of business defines the core identity of a company – what it does, how it operates, and its place in the market. Getting to grips with this concept provides valuable insight for entrepreneurs, investors and other stakeholders when evaluating a business.

Put simply, the nature of business refers to the fundamental characteristics that shape a company’s purpose, offerings and market approach. It encompasses aspects like:

• Legal structure – e.g partnership, private limited company
• Products and services – what the business sells or provides to customers
• Target market – the customer segments the business caters to
• Business model – how the company generates revenue and profit

So for example, an online retailer has a very different nature of business compared to a bricks-and-mortar supermarket, even though both sell groceries. Understanding these traits helps stakeholders make informed assessments about a company’s identity and potential value.

Business Nature Components

Purpose:  Every business starts with a purpose. It’s the foundation, answering why the entity exists. For some it’s selling products, for others providing services, and many it’s solving market problems. This purpose becomes the guiding North Star for all activities and decisions.

Activities:  Businesses have set operations like people have daily tasks. This could include designing products, sourcing materials, manufacturing, marketing and sales. These activities fulfil the business’s purpose.

Scale:  Business scale varies. Some operate locally like mom-and-pop shops. Others are huge enterprises spanning countries and continents. Scale dictates reach, operations and complexities.

Stakeholders:  Businesses involve stakeholders like owners, employees, customers, suppliers and communities. Each has a role, interest and expectation.

Economic Contribution:  A business contributes via job creation, taxes, trade and innovation. It plays a key economic role.

Risks & Challenges:  The landscape is dynamic with competition, trends, regulations and events posing risks. Recognizing and navigating challenges is vital.

Legal Structure:  Businesses operate within legal frameworks. Structures like sole proprietorships, partnerships and corporations define responsibilities, benefits and limitations.

In summary, a business’s nature blends purpose, functions, size, relationships, economic contribution, challenges and legal standing. These interplaying components form the intricate mosaic of business.

Nature of Business Examples

What impacts the nature of business, legal structure.

A company’s legal structure has implications for ownership, financing, taxes and operational processes. Common structures include:

• Sole proprietorships – owned and run by one individual who has unlimited liability
• Partnerships – tow or more co-owners who share financing, profits and operational duties
• Private limited companies – separate legal entities that limit owners’ liability to their investment amount
• Public Limited companies – can trade shares publicly and often have access to great financing
• Non-profit organisations – focus on social impact rather than profits

Choosing an appropriate legal structure depends on the founders’ growth ambitions, target customers, financing needs and appetite fr personal liability. An eco-friendly startup might begin as a partnership before transitioning later toa private limited company structure to attract investor funding.

Products & Services

A company’s offering encompasses what it sells to customers – whether physical goods, services, digital technologies or even ideas. The specifics here characterise the business’ core purpose. For example, a bakery sells artisanal bread and cakes, a web design agency sells bespoke websites and a charity sells the idea of positive social change through donations.

Over time, businesses may adapt or expand their offerings to pursue new opportunities or reach to market changes but the original core products and services tend to shape ongoing business identity and purpose.

Target Market

The specific customer groups a company sells to dictate much of its branding, proposition development and communications tactics. Market segmentation by demographics, geography, behaviours and values allow organisations to match products/services to buyer preferences.

For example, a specialty pet food company that prides itself on using the finest ingredients may focus its marketing on targeting affluent urban dog owners who are more likely to pay a higher price for the knowledge that better ingredients are used.

Industry Sector

The industry sector that a business operates in directly impacts its competitive environment, distribution channels and regulatory obligations. Knowing that industry landscape is key to analysing a company’s market positioning and potential.

Business Model

Every company’s business model encompasses how it generates sales revenues and profits from its offerings. The main areas of a business model usually include:

• Value proposition – products/services offering value to customers
• Target market – the selected customer segments
• Distribution channels – how deliverables reach customers
• Revenue streams = where sales income is generated
• Cost structure – the expenses required to operate
• Margin model – how the profits are produced from revenue

The Internal & External Factors Influencing The Nature Of Business

Internal factors.

• Ownership Model – Group owned businesses rather than sole proprietorships often have wider financing options available to them but the downside is, having multiple people to run decisions past, can slow down decision making timelines.
• Management culture – Visionary leaders can create strong innovative work cultures whereas prudent leaders tend to create steadier, less risky operations.
• Company size – Large organisations benefit from economic scale but small operations tend to be more agile when it comes to customer interactions.
• Technology used – Digitally driven companies are fundamentally different from traditional manual operations. As digital revolutions continue to happen, back office processes transform to provide customers with better front end experiences and personalisation.
• Staff Skills – The skills available across employees will make or break your business. If you can’t get the talent required in house, then small firms may need to outsource specialist areas.
• Purpose Alignment – Workforce diversity, community development and social justice can also reshape business nature. Younger workers choose employers that can demonstrate genuine commitment to moral causes rather than simple virtue signalling.

External Factors

• Economic Landscape – Thriving economies provide more opportunities, whereas recessions force consolidation and cuts
• Geography – Rural businesses often focus on community values whereas city-based firms can afford to follow consumer trends
• Environmental Obligations – With climate change and ecological threats prominent, sustainability conscious customers will want to see greener practices in businesses they support. For example, petroleum companies investing in renewable energy sources would be an example of environmental obligations shaping the nature of business.
• Regulations – Plenty of industries have specific compliance rules to follow which can fundamentally shape operations
• Competitors – Start-ups in crowded marketplaces must be able to disturb, whereas monopolies control captive customer bases.
• Market Globalisation – Trading across borders requires adaptations to make in branding, trading partnership and supply chains.
• Investor demands – When investors are expecting results, companies may feel under pressure to scale up quickly
• Customer expectations – Customer focused businesses must continue to adapt to the needs and demands of consumers. Those who fail to continually increase the value they offer to their customers face displacement by others who will.

These internal and external factors are constantly evolving and changes here will inevitably impact the strategies and processes required within the business. In some cases, this may lead to a change in the overall nature of business.

Types Of Businesses and their Nature

Legal structures and ownership models have a big impact on the taxes, liabilities and grow strategies available to organisations. Here is an overview of the main types available in the UK:

Sole Proprietorships

A sole proprietorship is a business owned and run by a single individual. This is one of the easiest business structures to set up and manage, only requiring a unique business name. The owner then has complete control over strategy, operations and liability. This means that personal assets can be pursued to settle business debts as there is no distinction between the owner and the business.

This type of business tends to work well for solo entrepreneurs with specialist professional skillets such as photography, consultants or tradespeople. Many people love the simplicity, autonomy and low start up costs, but lack of work during slow periods, financial protections, and difficulty if operations come to a standstill reflect the downsides of this type of business.

Partnerships

Partnerships allow two or more co-owners to set up and operate a business. All parties will contribute financing, decision making and operational oversight whilst splitting any profits made. This type of business structure allows for owner-operator involvement whilst knowledge and resources are pooled to greater business impact.

Partnerships tend to open up wider funding opportunities, diverse skill sets and expansion opportunities across several locations. All costs, responsibilities and liabilities are shared too. For this to work, an excellent collaborative approach is required which involves communications and transparency over financials and performance.

Disagreements can quickly derail partnerships but this type of set up is common in professional services such as legal firms, medical practices and architecture firms. Overall, partnerships encourage contribution to the business whilst avoiding some of the limitations faced by sole proprietors.

Private Limited Companies

A private limited company creates a legal structure that is separate from its owners. This means the company is owned by shareholders in accordance with their initial investments but that their liability is also limited to the amount invested. The benefit of this set up is that personal assets cannot be pursued to settle company debts.

The independent legal entity of the business means company ownership can be transferred more easily through the buying and selling of shares, and limited companies are also able to access favourable tax efficiencies in several areas.

The downside of a limited company is the higher volume of administrative work required to operate. Including extensive financial reporting, annual government filings and statutory obligations; They must follow regulations around hiring, workforce policies and contracts.

Public Limited Companies

Public limited companies (PLCs) can raise funds by trading shares openly though stock exchanges. Doing this opens up the business for the biggest investment to fund projects and fuel growth. To do this, a business must meet strict reporting and operational standards.

The separation of ownership from management requires non-executive directors and structured leadership teams. PLCs operate with greater public scrutiny of salaries, diversity policies and carbon footprints and underperformers will face pressure to make changes to strategy or leadership.

Non-Profit Organisations

Rather than maximising profits for owners, non-profit organisations focus on social impact and community benefit. To do this, most require donations and public sector funding to fund and are also reliant on volunteers to make up a proportion of their workforce.

Any profits cannot be divided between owners, but must stay within the company. Examples of these kinds of businesses include wildlife conservation groups, universities, medical research charities and cultural institutions. Spending is constrained and should be purposeful to reassure donors that their money is being used wisely and for the good intentions of the operation rather than internal functions. Successful non-profit companies have strong community support who engage emotionally with their causes.

The Evolving Nature Of Business

Whilst most businesses will carry their original purpose and niche with them, the nature of business may evolve over time as the company grows or responds to external or internal forces impacting it.

The Role Of Stakeholders

Within business environments, internal and external stakeholders will always have an influence over an organisation’s direction.

Staff and unions that lobby for higher pay, improved working conditions and greater work-life balance can modify company behaviour over time.

Communities

Neighbouring communities affected by business operations advocate for social programs, environmental protections and local economic opportunities which will feed into corporate policies.

Business Partners

Suppliers will always request increased margins and better terms of trading while distributors request support in pushing products. The negotiations required for these relationships will inevitably shape operations.

Wrapping Up

The nature of business refers to the key characteristics of an organisation that shape its operations, identity and competitive landscape. Understanding these things ensures that entrepreneurs, inventors and other stakeholders make informed decisions about business potential, investment decisions and the timeframe that they might see a return on their investment.

The exact makeup of a business will depend on leadership, sector, strategic choices and where the company is in its cycle, but market focus, deliverables, capabilities and growth ambitions will all shape the way the business runs.

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News Roundup Spring 2024

CEGE Spring Graduation Celebration and Order of the Engineer

Forty-seven graduates of the undergraduate and grad student programs (pictured above) in the Department of Civil, Environmental, and Geo- Engineering took part in the Order of the Engineer on graduation day. Distinguished Speakers at this departmental event included Katrina Kessler (MS EnvE 2021), Commissioner of the Minnesota Pollution Control Agency, and student Brian Balquist. Following this event, students participated in the college-wide Commencement Ceremony at 3M Arena at Mariucci. 

UNIVERSITY & DEPARTMENT

The University of Minnesota’s Crookston, Duluth, and Rochester campuses have been awarded the Carnegie Elective Classification for Community Engagement, joining the Twin Cities (2006, 2015) and Morris campuses (2015), and making the U of M the country’s first and only university system at which every individual campus has received this selective designation. Only 368 from nearly 4,000 qualifying U.S. universities and colleges have been granted this designation.

CEGE contributed strongly to the College of Science and Engineering’s efforts toward sustainability research. CEGE researchers are bringing in over $35 million in funded research to study carbon mineralization, nature and urban areas, circularity of water resources, and global snowfall patterns. This news was highlighted in the Fall 2023 issue of  Inventing Tomorrow  (pages 10-11). https://issuu.com/inventingtomorrow/docs/fall_2023_inventing_tomorrow-web

CEGE’s new program for a one-year master’s degree in structural engineering is now accepting applicants for Fall 2024. We owe a big thanks to DAN MURPHY and LAURA AMUNDSON for their volunteer work to help curate the program with Professor JIA-LIANG LE and EBRAHIM SHEMSHADIAN, the program director. Potential students and companies interested in hosting a summer intern can contact Ebrahim Shemshadian ( [email protected] ).

BERNIE BULLERT , CEGE benefactor and MN Water Research Fund founder, was profiled on the website of the University of Minnesota Foundation (UMF). There you can read more about his mission to share clean water technologies with smaller communities in Minnesota. Many have joined Bullert in this mission. MWRF Recognizes their Generous 2024 Partners. Gold Partners: Bernie Bullert, Hawkins, Inc., Minnesota Department of Health, Minnesota Pollution Control Agency, and SL-serco. Silver Partners: ISG, Karl and Pam Streed, Kasco, Kelly Lange-Haider and Mark Haider, ME Simpson, Naeem Qureshi, Dr. Paul H. Boening, TKDA, and Waterous. Bronze Partners: Bruce R. Bullert; Brenda Lenz, Ph.D., APRN FNP-C, CNE; CDM Smith; Central States Water Environment Association (CSWEA MN); Heidi and Steve Hamilton; Jim “Bulldog” Sadler; Lisa and Del Cerney; Magney Construction; Sambatek; Shannon and John Wolkerstorfer; Stantec; and Tenon Systems.

After retiring from Baker-Tilly,  NICK DRAGISICH  (BCE 1977) has taken on a new role: City Council member in Lake Elmo, Minnesota. After earning his BCE from the University of Minnesota, Dragisich earned a master’s degree in business administration from the University of St. Thomas. Dragisich retired in May from his position as managing director at Baker Tilly, where he had previously served as firm director. Prior to that, he served as assistant city manager in Spokane, Washington, was the city administrator and city engineer in Virginia, Minnesota, and was mayor of Chisholm, Minnesota—all adding up to more than 40 years of experience in local government. Dragisich was selected by a unanimous vote. His current term expires in December 2024.

PAUL F. GNIRK  (Ph.D. 1966) passed away January 29, 2024, at the age of 86. A memorial service was held Saturday, February 24, at the South Dakota School of Mines and Technology (SDSM&T), where he started and ended his teaching career, though he had many other positions, professional and voluntary. In 2018 Paul was inducted into the SDSM&T Hardrocker Hall of Fame, and in 2022, he was inducted into the South Dakota Hall of Fame, joining his mother Adeline S. Gnirk, who had been inducted in 1987 for her work authoring nine books on the history of south central South Dakota.

ROGER M. HILL  (BCE 1957) passed away on January 13, 2024, at the age of 90. His daughter, Kelly Robinson, wrote to CEGE that Roger was “a dedicated Gopher fan until the end, and we enjoyed many football games together in recent years. Thank you for everything.”

KAUSER JAHAN  (Ph.D. 1993, advised by Walter Maier), PE, is now a civil and environmental engineering professor and department head at Henry M. Rowan College of Engineering. Jahan was awarded a 3-year (2022- 2025), $500,000 grant from the U.S. Department of Environmental Protection Agency (USEPA). The grant supports her project, “WaterWorks: Developing the New Generation of Workforce for Water/Wastewater Utilities,” for the development of educational tools that will expose and prepare today’s students for careers in water and wastewater utilities.

SAURA JOST  (BCE 2010, advised by Timothy LaPara) was elected to the St. Paul City Council for Ward 3. She is part of the historic group of women that make up the nation’s first all-female city council in a large city.

The 2024 ASCE Western Great Lakes Student Symposium combines several competitions for students involved in ASCE. CEGE sent a large contingent of competitors to Chicago. Each of the competition groups won awards: Ethics Paper 1st place Hans Lagerquist; Sustainable Solutions team 1st place overall in (qualifying them for the National competition in Utah in June); GeoWall 2nd place overall; Men’s Sprint for Concrete Canoe with rowers Sakthi Sundaram Saravanan and Owen McDonald 2nd place; Product Prototype for Concrete Canoe 2nd place; Steel Bridge (200 lb bridge weight) 2nd place in lightness; Scavenger Hunt 3rd place; and Aesthetics and Structural Efficiency for Steel Bridge 4th place.

Students competing on the Minnesota Environmental Engineers, Scientists, and Enthusiasts (MEESE) team earned second place in the Conference on the Environment undergraduate student design competition in November 2023. Erin Surdo is the MEESE Faculty Adviser. Pictured are NIKO DESHPANDE, ANNA RETTLER, and SYDNEY OLSON.

The CEGE CLASS OF 2023 raised money to help reduce the financial barrier for fellow students taking the Fundamentals of Engineering exam, a cost of $175 per test taker. As a result of this gift, they were able to make the exam more affordable for 15 current CEGE seniors. CEGE students who take the FE exam pass the first time at a rate well above national averages, demonstrating that CEGE does a great job of teaching engineering fundamentals. In 2023, 46 of 50 students passed the challenging exam on the first try.

This winter break, four CEGE students joined 10 other students from the College of Science and Engineering for the global seminar, Design for Life: Water in Tanzania. The students visited numerous sites in Tanzania, collected water source samples, designed rural water systems, and went on safari. Read the trip blog: http://globalblogs.cse.umn.edu/search/label/Tanzania%202024

Undergraduate Honor Student  MALIK KHADAR  (advised by Dr. Paul Capel) received honorable mention for the Computing Research Association (CRA) Outstanding Undergraduate Research Award for undergraduate students who show outstanding research potential in an area of computing research.

GRADUATE STUDENTS

AKASH BHAT  (advised by William Arnold) presented his Ph.D. defense on Friday, October 27, 2023. Bhat’s thesis is “Photolysis of fluorochemicals: Tracking fluorine, use of UV-LEDs, and computational insights.” Bhat’s work investigating the degradation of fluorinated compounds will assist in the future design of fluorinated chemicals such that persistent and/or toxic byproducts are not formed in the environment.

ETHAN BOTMEN  (advised by Bill Arnold) completed his Master of Science Final Exam February 28, 2024. His research topic was Degradation of Fluorinated Compounds by Nucleophilic Attack of Organo-fluorine Functional Groups.

XIATING CHEN , Ph.D. Candidate in Water Resources Engineering at the Saint Anthony Falls Laboratory is the recipient of the 2023 Nels Nelson Memorial Fellowship Award. Chen (advised by Xue Feng) is researching eco-hydrological functions of urban trees and other green infrastructure at both the local and watershed scale, through combined field observations and modeling approaches.

ALICE PRATES BISSO DAMBROZ  has been a Visiting Student Researcher at the University of Minnesota since last August, on a Doctoral Dissertation Research Award from Fulbright. Her CEGE advisor is Dr. Paul Capel. Dambroz is a fourth year Ph.D. student in Soil Science at Universidade Federal de Santa Maria in Brazil, where she studies with her adviser Jean Minella. Her research focuses on the hydrological monitoring of a small agricultural watershed in Southern Brazil, which is located on a transition area between volcanic and sedimentary rocks. Its topography, shallow soils, and land use make it prone to runoff and erosion processes.

Yielding to people in crosswalks should be a very pedestrian topic. Yet graduate student researchers  TIANYI LI, JOSHUA KLAVINS, TE XU, NIAZ MAHMUD ZAFRI  (Dept.of Urban and Regional Planning at Bangladesh University of Engineering and Technology), and Professor Raphael Stern found that drivers often do not yield to pedestrians, but they are influenced by the markings around a crosswalk. Their work was picked up by the  Minnesota Reformer.

TIANYI LI  (Ph.D. student advised by Raphael Stern) also won the Dwight David Eisenhower Transportation (DDET) Fellowship for the third time! Li (center) and Stern (right) are pictured at the Federal Highway Administration with Latoya Jones, the program manager for the DDET Fellowship.

The Three Minute Thesis Contest and the Minnesota Nice trophy has become an annual tradition in CEGE. 2023’s winner was  EHSANUR RAHMAN , a Ph.D. student advised by Boya Xiong.

GUANJU (WILLIAM) WEI , a Ph.D. student advised by Judy Yang, is the recipient of the 2023 Heinz G. Stefan Fellowship. He presented his research entitled Microfluidic Investigation of the Biofilm Growth under Dynamic Fluid Environments and received his award at the St. Anthony Falls Research Laboratory April 9. The results of Wei's research can be used in industrial, medical, and scientific fields to control biofilm growth.

BILL ARNOLD  stars in an award-winning video about prairie potholes. The Prairie Potholes Project film was made with the University of Delaware and highlights Arnold’s NSF research. The official winners of the 2024 Environmental Communications Awards Competition Grand Prize are Jon Cox and Ben Hemmings who produced and directed the film. Graduate student Marcia Pacheco (CFANS/LAAS) and Bill Arnold are the on-screen stars.

Four faculty from CEGE join the Center for Transportation Studies Faculty and Research Scholars for FY24–25:  SEONGJIN CHOI, KETSON ROBERTO MAXIMIANO DOS SANTOS, PEDRAM MORTAZAVI,  and  BENJAMIN WORSFOLD . CTS Scholars are drawn from diverse fields including engineering, planning, computer science, environmental studies, and public policy.

XUE FENG  is coauthor on an article in  Nature Reviews Earth and Environment . The authors evaluate global plant responses to changing rainfall regimes that are now characterized by fewer and larger rainfall events. A news release written at Univ. of Maryland can be found here: https://webhost.essic. umd.edu/april-showers-bring-mayflowers- but-with-drizzles-or-downpours/ A long-running series of U of M research projects aimed at improving stormwater quality are beginning to see practical application by stormwater specialists from the Twin Cities metro area and beyond. JOHN GULLIVER has been studying best practices for stormwater management for about 16 years. Lately, he has focused specifically on mitigating phosphorous contamination. His research was highlighted by the Center for Transportation Studies.

JIAQI LI, BILL ARNOLD,  and  RAYMOND HOZALSKI  published a paper on N-nitrosodimethylamine (NDMA) precursors in Minnesota rivers. “Animal Feedlots and Domestic Wastewater Discharges are Likely Sources of N-Nitrosodimethylamine (NDMA) Precursors in Midwestern Watersheds,” Environmental Science and Technology (January 2024) doi: 10.1021/acs. est.3c09251

ALIREZA KHANI  contributed to MnDOT research on Optimizing Charging Infrastructure for Electric Trucks. Electric options for medium- and heavy-duty electric trucks (e-trucks) are still largely in development. These trucks account for a substantial percentage of transportation greenhouse gas emissions. They have greater power needs and different charging needs than personal EVs. Proactively planning for e-truck charging stations will support MnDOT in helping to achieve the state’s greenhouse gas reduction goals. This research was featured in the webinar “Electrification of the Freight System in Minnesota,” hosted by the University of Minnesota’s Center for Transportation Studies. A recording of the event is now available online.

MICHAEL LEVIN  has developed a unique course for CEGE students on Air Transportation Systems. It is the only class at UMN studying air transportation systems from an infrastructure design and management perspective. Spring 2024 saw the third offering of this course, which is offered for juniors, seniors, and graduate students.

Research Professor  SOFIA (SONIA) MOGILEVSKAYA  has been developing international connections. She visited the University of Seville, Spain, November 13–26, 2023, where she taught a short course titled “Fundamentals of Homogenization in Composites.” She also met with the graduate students to discuss collaborative research with Prof. Vladislav Mantic, from the Group of Continuum Mechanics and Structural Analysis at the University of Seville. Her visit was a part of planned activities within the DIAGONAL Consortium funded by the European Commission. CEGE UMN is a partner organization within DIAGONAL, represented by CEGE professors Mogilevskaya and Joseph Labuz. Mantic will visit CEGE summer 2024 to follow up on research developments and discuss plans for future collaboration and organization of short-term exchange visits for the graduate students from each institution. 

DAVID NEWCOMB  passed away in March. He was a professor in CEGE from 1989–99 in the area of pavement engineering. Newcomb led the research program on asphalt materials characterization. He was the technical director of Mn/ROAD pavement research facility, and he started an enduring collaboration with MnDOT that continues today. In 2000, he moved from Minnesota to become vice-president for Research and Technology at the National Asphalt Pavement Association. Later he moved to his native Texas, where he was appointed to the division head of Materials and Pavement at the Texas A&M Transportation Institute, a position from which he recently retired. He will be greatly missed.

PAIGE NOVAK  won Minnesota ASCE’s 2023 Distinguished Engineer of the Year Award for her contributions to society through her engineering achievements and professional experiences.

The National Science Foundation (NSF) announced ten inaugural (NSF) Regional Innovation Engines awards, with a potential $1.6 billion investment nationally over the next decade. Great Lakes ReNEW is led by the Chicago-based water innovation hub,  Current,  and includes a team from the University of Minnesota, including PAIGE NOVAK. Current will receive $15 mil for the first two years, and up to $160 million over ten years to develop and grow a water-focused innovation engine in the Great Lakes region. The project’s ambitious plan is to create a decarbonized circular “blue economy” to leverage the region’s extraordinary water resources to transform the upper Midwest—Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. Brewing one pint of beer generates seven pints of wastewater, on average. So what can you do with that wastewater?  PAIGE NOVAK  and her team are exploring the possibilities of capturing pollutants in wastewater and using bacteria to transform them into energy.

BOYA XIONG  has been selected as a recipient of the 2024 40 Under 40 Recognition Program by the American Academy of Environmental Engineers and Scientists. The award was presented at the 2024 AAEES Awards Ceremony, April 11, 2024, at the historic Howard University in Washington, D.C. 

JUDY Q. YANG  received a McKnight Land-Grant Professorship Award. This two-year award recognizes promising assistant professors and is intended to advance the careers of individuals who have the potential to make significant contributions to their departments and their scholarly fields. 

Professor Emeritus CHARLES FAIRHURST , his son CHARLES EDWARD FAIRHURST , and his daughter MARGARET FAIRHURST DURENBERGER were on campus recently to present Department Head Paige Novak with a check for $25,000 for the Charles Fairhurst Fellowship in Earth Resources Engineering in support of graduate students studying geomechanics. The life of Charles Fairhurst through a discussion with his children is featured on the Engineering and Technology History Wiki at https://ethw.org/Oral-History:Charles_Fairhurst#00:00:14_INTRODUCTION

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