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Guide to Developing a Personnel Plan

• May 12, 2023
• BPO Insights
• Finance and Accounting Services , Financial Analysis & Financial Planning

Table of Contents

A people plan is an essential component of your business strategy and Financial Planning . In addition to assisting you in budgeting for current and prospective employees, your personnel strategy allows you to consider who to hire and when to hire them.

What is a Personnel Plan?

A Personnel Plan is a document that details an organization’s staffing needs, goals, and workforce management practices. It is an essential component of human resource management and serves as a road map for employee recruitment, selection, training, development, retention, and management.

A Personnel Plan is an essential component of any start-up or entrepreneur’s business plan . It will aid you in your financial predictions, allowing you to anticipate the best periods to hire and expand.

When presenting for funding to angel investors or venture capitalists , they will want to see why your team is uniquely equipped to grow and scale your firm, as well as your hiring strategy.

Investors will be interested in learning:

• What positions do you require?
• When do you intend to fill them?
• How much will it cost to assemble the team you require?

What should you put in your Personnel Plan section?

The people who execute the work—your team—are both the most expensive and most important asset for many startups and small businesses . It stands to reason that hiring the appropriate individual at the right moment can have a big impact on your company’s ability to accomplish milestones and goals, not to mention cash flow.

A healthy Personnel Plan includes strategic thinking about human resources, such as whether to expand roles, and salary levels, and whether to hire full-time or on a contract basis.

So, whether you’re looking for investment or not, developing a people plan and forecast is an important aspect of business planning and strategic planning for your company’s long-term success. Look at the 9 critical phases of developing an investor-ready Personnel Plan .

What is the composition of your management team?

Typically, the “team” portion of your business plan will include an overview of the main jobs in your organization as well as the backgrounds of the people who will fill those critical responsibilities. You will highlight each of your company’s executive positions before speaking more broadly about other departments and teams.

Keep it brief .

You do not need to submit whole resumes for each team member; a brief overview of why each person is qualified for the position is sufficient. Describe each individual’s talents and expertise, as well as what they will do for the company.

Highlight your team’s strengths . How do they bolster your group’s strength? What is their special knowledge and experience in your (or a related) industry? If your market research uncovered a fantastic opportunity, why are you the best team to capitalize on it?

This part helps potential investors understand why each team member is critical to the company’s success. It serves as the rationale for their wage and ownership stake in the company if they are part owners.

How is the organizational structure defined?

Your company’s organizational structure is typically portrayed as an “org chart” that indicates who reports to whom and who is accountable for what.

However, you do not need to construct a graphic org chart; simply defining your organization in the text is sufficient . Simply demonstrate that your organization has a well-defined structure.

Is authority divided fairly among the team members? Do you have the resources to do all of the tasks required to expand your business?

You should also explain the many teams that your organization will have in the future . Sales, customer service, product development, marketing, production, and so on are examples.

You don’t have to hire all of these employees right away. Consider this section to be an outline of what you intend to do with your firm in the future.

Compile a list of your advisors, consultants, and board members

External advisers, board members, and even consultants can play an important role in determining a corporate strategy for some organizations. These individuals may even temporarily fill crucial positions as your company grows. You should include a list of these individuals in your Personnel Plan if this is the case. Give a brief background on each main advisor that outlines the value they give, just like you would for your management team.

You don’t have to include your advisors if they don’t play essential roles or aren’t critical to your achievement. However, i nclude anyone who adds significant value to the organization through advice, contacts, or operational skills.

Explain the gaps

It’s normal for your team to have gaps, especially if you’re a startup . You may not yet have identified all of the “right” team members, or you may not yet have the cash to hire for critical roles. That’s OK.

The trick is to recognize that you do have gaps on your team—this is how you determine who to employ and when to hire them . Furthermore, it is far better to describe and recognize team deficiencies than to pretend that you have all of the critical responsibilities that you require. Explain where your organization is weak and how you intend to address the issue as you develop in your business strategy.

Although it may be tempting to conceal potential weaknesses from investors, they will see right through you. It is far preferable to be open and honest about where you have management gaps and your Personnel Strategy to remedy those gaps. You want them to know you’ve identified and planned for dangers.

You should also bear in mind that your Personnel Plan may wear many hats in the early days of a company, but specialization will occur as the company expands.

For example, the CEO may initially also be the VP of Sales. However, the job of VP of Sales should eventually be filled by a specialist to take on that task. Include modifications like these in your personnel plan to show investors that you understand how your company will expand and scale.

What are your personnel requirements?

Outline the company’s personnel requirements, including the number and types of people required to run the business successfully . The credentials and skills required for each post should also be included.

Here you may identify your team’s shortcomings and vulnerabilities , ensuring that you have a competent grasp of the roles and duties that will be crucial to the business in the future – even if they are not currently in existence. Investors are ready to highlight “perfect” people strategies, so you should embrace the fact that you have recognized staffing hazards.

For example, your head of customer service may also be your head of sales, but these two responsibilities will need to be split in the future.

How will recruitment and training be carried out?

This section should explain how the company intends to recruit and train personnel, including any training programs or on-the-job training.

What are the remuneration and benefits?

Outline the salary and benefits packages that will be provided to employees, including salaries, bonuses, health insurance, retirement plans, and any other perks or incentives.

Describe your Human Resources policies

Explain the company’s policies on topics such as employee performance reviews, disciplinary procedures, and termination procedures.

Estimate your personnel costs

Most Personnel Plans should include a personnel table to anticipate labor costs . Here are some expenses to keep in mind when forecasting.

Labor costs, both direct and indirect

You should include both direct expenses, which are often salary, and indirect expenses, which include:

• Paid vacation
• Insurance and healthcare
• Payroll expenses

As well as any extra fees you incur for each employee in addition to their compensation. Here’s an example of a personnel prediction:

Employee-related expenses and the burden rate

The indirect costs of staff are known by various names . Still, Innovature BPO will refer to it as a “burden rate” or “employee-related expenses”, as it is an expense in addition to direct wages and salary . Payroll taxes, worker’s compensation insurance, health insurance, and other benefits and taxes are common examples of these costs.

Don’t worry about calculating the correct burden rate for company planning objectives. Estimate it instead as a proportion of total monthly compensation. A range of 15% to 25% is normally appropriate, but it depends on the type of benefits you intend to provide.

Individuals and groups of individuals can both be listed in your Personnel Plan . You should certainly mention key people and other highly paid employees but put other departments or groups of people together. For example, you may include your management team but then group departments such as marketing, customer service, and manufacturing together.

Then factor in your employee costs for benefits and insurance. In the example personnel table above, this is referred to as “Employee-Related Expenses.”

The whole quantity of your salary and personnel load will then be included as an item in your profit and loss prediction. Assume you’re using HR management software to create a Personnel Prediction. This software explains where you’ll see personnel costs on your cash flow statement, profit and loss (income statement), and balance sheet.

Is it necessary to Personnel Plan in a company strategy if you have no employees?

Even if you don’t currently have any employees, having a Personnel Plan is useful to your firm in the long run.

You may find it difficult to scale your firm or respond to changes in your sector or market if you do not have a Personnel Plan . For example, if you need to hire someone immediately to fill a key function, you may not know where to begin or what qualifications to search for.

Developing a Personnel Plan can also assist you in clarifying your company’s aims and objectives. You can better prioritize and focus on the critical tasks that must be completed by establishing the roles and responsibilities required to fulfill those goals.

As a result, even if you don’t currently have any employees, it’s a good idea to build a Personnel Plan to help you prepare for future growth and ensure that you have the correct team in place to support your business objectives.

Is there an easy approach to forecasting a Personnel Plan?

Personnel Plan is a time-consuming process that necessitates careful consideration of what needs to happen in your company and where you want it to go. Typically, this necessitates a lengthy process of spreadsheets and mathematics to determine who needs to work with you and at what expense.

A financial modeling tool can ensure that this component of your business strategy, along with other critical components, is easily constructed, requiring only a few data entries to be entered throughout the software. Currently, on the market, there are quite a few tools to support Personnel plans and personnel management . Let’s enjoy!

Personnel Plan is an important aspect of the business planning process because it forces you to consider what needs to be done in your company and who will do it. Take the time to work through this section of your financial plan, and you’ll have a lot better idea of what it will take to make your firm a success.

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How to Create an Investor-Ready Personnel Plan and Forecast Employee Costs

Posted march 22, 2021 by noah parsons.

A personnel plan is a critical part of your business plan and financial forecast . In addition to helping you budget for current and future employees, your personnel plan enables you to think through who you should hire and when you should hire them.

If you’re pitching to angel investors or venture capitalists for funding, they will want to see why your team is uniquely suited to grow and scale your business, as well as your hiring plan.

Investors will want to know:

• What positions do you need to fill?
• When you plan on filling them?
• How much it’s going to cost to build the team you need??

What to include in the personnel section of your business plan

For many startups and small businesses, the people who do the work—your team—are both the most costly and most valuable asset. It makes sense that hiring the right person at the right time can have a significant impact on your ability to meet your company’s milestones and goals , not to mention your cash flow .

Thinking strategically about human resources — when to add positions, compensation levels, and whether to hire full-time or on a contract basis are all pieces of a healthy personnel plan.

So, whether you’re seeking investment or not, building a personnel plan and forecast is an essential part of business planning and strategic planning for the long-term viability of your company. Let’s dive right in and look at the five key steps to build an investor-ready personnel plan.

1. Describe your team

In the “team” section of your business plan, you will typically include an overview of the key positions in your company and the background of the people who will be in those critical roles. Usually, you’ll highlight each of the management positions in your company and then speak more generally about other departments and teams.

You don’t need to include full resumes for each team member—a quick summary of why each person is qualified to do the job is enough. Describe each person’s skills and experience and what they will be doing for the company.

Emphasize your team’s strengths. How do they make your team stronger? What specific expertise and experience do they have in your (or a related) industry? Assuming your market research identified a great opportunity, why are you the right team to capitalize on it? 

For potential investors, this section helps qualify why each team member is necessary for the success of the business. It acts as a justification for their salary and equity share if they are part owners of the company.

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2. Describe your organizational structure

The organizational structure of your company is frequently represented as an “org chart” that shows who reports to whom and who is responsible for what.

You don’t have to create a visual org chart, though—describing your organization in the text is just fine. Just make sure to show that you have a clear structure for your company.

Is authority adequately distributed among the team? Do you have the resources to get everything done that you need to grow your company?

You’ll also want to mention the various teams your company is going to have in the future. These might include sales, customer service, product development, marketing, manufacturing, and so on.

You don’t need to plan on hiring all of these people right away. Think of this section as an outline of what you plan to do in the future with your company.

3. Explain the gaps

It’s alright to have gaps on your team, especially if you’re a startup. You may not have identified all the “right” team members yet, or you may not have the funds available yet to hire for essential roles . That’s okay.

The key is to know that you do have gaps on your team—this is how you figure out who you need to hire and when you need to hire them. Also, it’s much better to define and identify weaknesses in your team than to pretend that you have all the key roles that you need. In your business plan , explain where your organization is weak and what your plans are to correct the problem as you grow.

It might be tempting to hide your potential weaknesses from investors, but they’ll see through that right away. It’s much better to be open and honest about where you have management gaps and your plans to solve those problems. You want them to know you have identified and made plans to mitigate risks .

You also need to keep in mind that employees might wear a lot of hats in the early days of a company, but that specialization will happen as the company grows.

For example, initially, the CEO might also be the VP of Sales. But, eventually, the VP of Sales role should be filled by a specialist to take on that responsibility. Include these types of changes in your personnel plan to explain to investors that you understand how your company is going to grow and scale.

4. List your advisors, consultants, and board members

For some companies, external advisors, board members , and even consultants can play a crucial role in setting business strategy. These people might even fill key positions temporarily as your company grows. If this is the case, you’ll want to list these people in your business plan. Like your management team, provide a brief background on each principal advisor that explains the value they provide.

If your advisors don’t hold key roles or are not critical to your success, you don’t necessarily have to list them. But, do list anyone that is adding substantial value to the company by providing advice, connections, or operational expertise.

5. Forecast your personnel costs

Most business plans should include a personnel table to forecast the expense of your employees. Here are the expenses you’ll need to be aware of when forecasting.

Direct and indirect labor expenses

You’ll want to include both direct expenses , which usually comprise salaries, as well as indirect expenses which include: 

• Paid time off
• Healthcare and insurance
• Payroll costs

 As well as any other costs you incur for each employee beyond their salary. Here’s an example of what a personnel forecast can look like using LivePlan .

Burden rate and employee-related expenses

There are different names for the indirect expenses of personnel. Still, I like to call it “burden rate” or “employee-related expenses,” which is an expense over and above the direct wages and salaries. These expenses typically include payroll taxes, worker’s compensation insurance, health insurance, and other benefits and taxes.

For business planning purposes, don’t stress about coming up with the exact figure for the burden rate. Instead, estimate it using a percentage of total monthly salaries. Somewhere between 15 percent and 25 percent usually makes sense, but it depends on what kind of benefits you plan on offering.

In your personnel plan, you can list both individual people as well as groups of people. You’ll probably want to list out key people and other highly paid employees, but group together other departments or groups of people. For example, you might list out your management team, but then group together departments like Marketing, Customer Service, and Manufacturing.

Then, add in your personnel burden to cover benefits and insurance. In the example personnel table above, this is called “Employee-Related Expenses.”

You’ll then take the total number of your salaries plus personnel burden and include this in your profit and loss forecast as an expense. Suppose you’re using LivePlan to build your personnel forecast. In that case, this how-to article on entering personnel shows where you’ll see personnel costs appear on your cash flow statement, profit and loss (income statement), and your balance sheet.

Do you need a personnel plan if you have no employees?

If you are a sole proprietor and don’t have employees, you should still include your own salary as part of the business plan. Make sure to include your salary as an expense in your Profit & Loss Statement . Even if you, the business owner, don’t take the salary, so you can keep the cash in your business, you’ll want to record what you should have been paid.

In the case of a sole proprietor, you probably don’t need a full table for the personnel plan, like in the example above. But, when you do start planning to hire a team, you should use the format I’ve described here.

Personnel planning is a valuable part of the business planning process because it forces you to think about what needs to get done in your business and who’s going to do it. Take the time to work through this part of your financial forecast, and you’ll have a much better sense of what it’s going to take to make your business successful.

*Editors Note: This article was initially written in 2019 and updated for 2021.

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How to Create a Personnel Plan for Investors

What is a personnel plan?

A personnel plan is a document that outlines an organization’s staffing needs, goals, and strategies for managing its workforce.

It is a key component of human resource management and provides a roadmap for the recruitment, selection, training, development, retention, and management of employees.

A personnel plan is critical within the business plan you would have created as a start-up or entrepreneur. It will help you in your financial forecasting, anticipating the right times to hire and expand.

What to include in the personnel section of your business plan

The personnel section of a business plan should include information about the management team and staff that will be involved in operating the business. The people who do the work are the most important asset, which of course comes with a cost. Understanding when to hire, when to think about human resources, and when to grow your business at the right time can be enormously important in meeting business objectives, setting yourself up for success with great personal benchmarks.

Building out a personnel plan within your business plan is going to be essential in planning for the long term success of your business. Forecasting this data can be the best way to ensure longevity.

Who is your management team?

This should include a brief introduction to the key members of the management team, including their backgrounds, experience, and relevant skills. It’s important to highlight their qualifications and how they will contribute to the success of the business.

This can be brief and doesn’t require a full resume for each member of the team. A simple explanation detailing qualifications and relevant experience applicable within the company is all that’s required.

What is the organizational structure?

This section should provide an overview of the organizational structure of the company, including who will be in charge of each department or functional area, as well as any outside consultants or advisors who will be involved.

In line with forecasting, you will want to illustrate the future of your company and who will be included. As you develop, you can anticipate your team growing from a just few employees into staff across multiple sectors, such as customer service, marketing, and support.

What are your staffing needs?

Outline the staffing needs of the business, including the number and types of employees needed to run the business successfully. This should also include the qualifications and skills required for each position.

Here you can identify the weaknesses and risks across your team, ensuring that you have a capable understanding of the roles and responsibilities that are important to the business in the future – though they may not be in place right now. Investors are quick to highlight “perfect” personnel plans, so you will want to embrace that you have identified risks in staffing.

As an example, your head of customer support may also be your head of sales, but in time these two roles will need to be separated.

What will recruitment and training look like?

This section should detail how the company plans to recruit and train employees, including any training programs or on-the-job training that will be provided.

What will the compensations and benefits be?

Outline the compensation and benefits packages that will be offered to employees, including salaries, bonuses, health benefits, retirement plans, and any other perks or incentives.

Outline the Human Resources policies

Detail the company’s policies on issues such as employee performance reviews , disciplinary procedures, and termination policies.

Does a business plan need personnel planning if I have no staff?

Even if you don’t have any employees right now, having a personnel plan is beneficial for your business in the long term.

Without a personnel plan, you may find it challenging to scale your business or adapt to changes in your industry or market. For example, if you suddenly need to hire someone to fill a critical role, you may not know where to start or what qualifications you should look for.

Creating a personnel plan can also help you to clarify your business goals and objectives. By determining the roles and responsibilities required to meet those goals, you can better prioritize and focus on the essential tasks that need to be done.

Therefore, even if you don’t have any employees currently, it’s still a good idea to develop a personnel plan to help you prepare for future growth and ensure that you have the right team in place to support your business objectives.

Is there an easy way to forecast a personnel plan?

Personnel planning is a long process as it requires dedicated thought as to what needs to happen in your business and where you want to take it. Typically, this require a lengthy process of spreadsheets and equations to figure out exactly who needs to be working with you, and at what cost.

Business planning software can ensure that this part of your business plan, alongside other key components, is created with ease – simply needing a few data entries to be entered throughout the software.

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The Secrets of a Great Personnel Plan

Investing in human resources (HR) is a key element of healthy personnel planning and strategy. A hallmark of effective leadership is efficient HR which means hiring employees in a cost-effective manner and mostly when needed. Your business plan should always include an informative and up-to-date personnel plan section to provide direction for the company and help entrepreneurs stay focused.

At the heart of every business owner is the desire to excel. The best way to excel is to define your plans and proceed with purpose. Your business plan comprises a business description , a competition analysis, a marketing plan, a personnel section, the HR section and key financial information.

The personnel plan is designed to help company owners put their plans into action. It helps to clarify objectives for the current and forthcoming year. Thus, a good understanding of personnel plan and how to implement it in your business is vital.

What is a personnel plan?

A personnel plan is a vital part of every company plan and financial forecast, which aids future and current budgeting and defines the type of employee to hire and when to hire such employees.

When you are seeking funding, venture capitalists and angel investors will want a breakdown of your team. Who are they? What talents and skills do they bring to the table? What is your hiring plan for the first year, second year, and so on? How will your team drive business growth and success?

All this information will include the positions you will need employees for, the period in which the management intends to fill the plan, and the financial implications of the implementation of the plan. Just as you would assess if your business is financially feasible , you’ll need to apply this same sentiment when hiring employees.

The personnel plan represents a consolidated strategy for hiring the best people for all company positions, while keeping an eye on future expansion.

Michael E. Gerber, the author of The E-Myth Revisited, posited that an effective personnel plan designed as an efficient workplace game will help employers prime employees for organizational goals while creating job satisfaction. This means that an effective hiring process is vital to an efficient process of personnel planning.

The majority of employers find personnel planning difficult especially those whose staff work in shifts. Organizational challenges like these can easily be taken care of with TimeTrack Duty Roster which helps employers create a suitable overview of their workforce and personalize shifts according to any number of criteria, including their location and skills.

Features of the TimeTrack Duty Roster

Key elements of a personnel plan

Each company’s needs may differ, but in general, these are common elements that should form part of every personnel plan.

Job description

• Clearly explained requirements of the various job functions. Use easy-to-understand language and phrases.

Organizational chart and type of hiring

• The chart of the organization should show who works for whom and provide a good overview of the overall management and employee structure of the company.
• The plan should be clear on whether employees are independent contractors or receive salaries. This is essential for labor compliance issues and the workers’ tax.

Remuneration (salary amount and assumptions)

• Details of hourly or yearly payments are defined, including relevant assumptions that comprise estimates of salary increases over time. You also need to account for company benefits, including health insurance. This may be a percentage of salary costs employers pay to staff.

Time of recruitment

• The hiring of employees is often done over time and staggered. Thus, your plan must include details about when an employee will start and the end date for temporary staff.

Incorporate key personnel into the business plan

Employees are the most valuable assets any company can have. This means that hiring the right person should always be a key priority for every company. Your staff will have a significant impact on revenue, customer experience/satisfaction and the success of the company.

Incorporating the personnel section into your business plan is an important part of strategic planning for long-term viability. The information below serves as guide on how to implement a personnel plan in your business.

Team dynamics

This presents an overview of all the key positions in your business and the backgrounds of staff in their critical roles and departments. Add the total number of staff and their experiences. Emphasize the strengths of individuals and how to upskill where necessary. A great team is typically the fulcrum of business success because they have the responsibility of and possess the ability to translate policies into business success.

Organizational structure

The structure of your company is represented in the company’s organizational chart, which shows the hierarchy of duties and management. Is authority finely distributed and are the various company teams properly mentioned? This includes customer service, product development, marketing, manufacturing and sales.

When planning the company’s organizational details, you will need a strategy to manage absences and leave. TimeTrack Leave Management feature helps you to finetune these details so you can easily (and quickly!) oversee employee absences, vacation time and keep track of working hours for compliance management.

TimeTrack Leave Management

Gaps and stumbling blocks

While it may be difficult to identify gaps in your team, chances are that if you look closely, you will observe a section of your company in need of quality talent. You need to figure out how to fill this gap. Don’t hide the weakness of your team from potential investors. Always remember that specialization will evolve as the company grows.

Where advisors, board members and consultants are applicable to your company, list them. Where they will fill key positions as the business grows, you need to list them and provide background on the value they provide.

The fine print

Every personnel plan needs to include a section addressing employment benefits , rights and conditions, especially for managers. Design your company’s management personnel plan and include a table of staff expenses, including both direct and indirect labor expenses, a burden rate and employee-related expenses, while adding payroll tax, workers’ compensation, salaries and health insurance.

Checklist for personnel planning

Personnel improvement

Improving conditions for personnel involve the identification of gaps, developing and implementing action plans  and taking follow-up actions. Managers should develop a performance improvement plan before taking disciplinary action against employees.

Identify skills or performance gaps

A gap analysis is designed to help you identify potential and current issues and is an essential part of the personnel process. Incorporate characteristics of human resource planning into your business planning.

Provide proof of a skills gap or underperformance of the workforce using a consistent format across all employment cadres. Design your format, including employee information and a description of performance discrepancies using expected and actual performance criteria.

Have a face-to-face meeting with your employees to share observed issues or concerns and gain insights into causal factors of underperformance. Use your documentation to share insights on performance challenges. Let the affected employees know they have committed specific policy infractions. Focus only on the outcomes of behaviors to help affected staff understand how their behaviors affect company success.

Develop action plans

Establish specific and measurable improvement goals for your workforce. Avoid generalizations and focus on key goals. Setting bit-sized goals is an effective way of working while monitoring task on time .

Provide detailed resources, including advanced tools that can help employees improve. This also means providing the management with essential tools that will help with the efficient oversight of the workforce.

Create a timeline for achieving performance improvement goals. This will help keep the staff on track towards achieving expectations. Don’t forget to identify metrics for measuring progress. Be specific about what you want employees to achieve and define the intended consequences in the event of failure to complete performance improvement plan. Be specific about actions you will take whether or not targets are met.

Schedule regular appointments to review the performance improvement plan with your employees and implement their feedback.

Incorporating a personnel plan into your business strategy is a key factor for efficient planning. To maximize the opportunity presented by personnel planning, use any of the effective and reliable TimeTrack planning and absence management software tools.

I am a researcher, writer, and self-published author. Over the last 9 years, I have dedicated my time to delivering unique content to startups and non-governmental organizations and have covered several topics, including wellness, technology, and entrepreneurship. I am now passionate about how time efficiency affects productivity, business performance, and profitability.

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How to Write the Management Team Section of a Business Plan + Examples

Written by Dave Lavinsky

Over the last 20+ years, we’ve written business plans for over 4,000 companies and hundreds of thousands of others have used the best business plan template and our other business planning materials.

From this vast experience, we’ve gained valuable insights on how to write a business plan effectively , specifically in the management section.

What is a Management Team Business Plan?

A management team business plan is a section in a comprehensive business plan that introduces and highlights the key members of the company’s management team. This part provides essential details about the individuals responsible for leading and running the business, including their backgrounds, skills, and experience.

It’s crucial for potential investors and stakeholders to evaluate the management team’s competence and qualifications, as a strong team can instill confidence in the company’s ability to succeed.

Why is the Management Team Section of a Business Plan Important?

Your management team plan has 3 goals:

• To prove to you that you have the right team to execute on the opportunity you have defined, and if not, to identify who you must hire to round out your current team
• To convince lenders and investors (e.g., angel investors, venture capitalists) to fund your company (if needed)
• To document how your Board (if applicable) can best help your team succeed

What to Include in Your Management Team Section

There are two key elements to include in your management team business plan as follows:

Management Team Members

For each key member of your team, document their name, title, and background.

Their backgrounds are most important in telling you and investors they are qualified to execute. Describe what positions each member has held in the past and what they accomplished in those positions. For example, if your VP of Sales was formerly the VP of Sales for another company in which they grew sales from zero to $10 million, that would be an important and compelling accomplishment to document.

Importantly, try to relate your team members’ past job experience with what you need them to accomplish at your company. For example, if a former high school principal was on your team, you could state that their vast experience working with both teenagers and their parents will help them succeed in their current position (particularly if the current position required them to work with both customer segments).

This is true for a management team for a small business, a medium-sized or large business.

Management Team Gaps

In this section, detail if your management team currently has any gaps or missing individuals. Not having a complete team at the time you develop your business plan. But, you must show your plan to complete your team.

As such, describe what positions are missing and who will fill the positions. For example, if you know you need to hire a VP of Marketing, state this. Further, state the job description of this person. For example, you might say that this hire will have 10 years of experience managing a marketing team, establishing new accounts, working with social media marketing, have startup experience, etc.

To give you a “checklist” of the employees you might want to include in your Management Team Members and/or Gaps sections, below are the most common management titles at a growing startup (note that many are specific to tech startups):

• Founder, CEO, and/or President
• Chief Operating Officer
• Chief Financial Officer
• VP of Sales
• VP of Marketing
• VP of Web Development and/or Engineering
• UX Designer/Manager
• Product Manager
• Digital Marketing Manager
• Business Development Manager
• Account Management/Customer Service Manager
• Sales Managers/Sales Staff
• Board Members

If you have a Board of Directors or Board of Advisors, you would include the bios of the members of your board in this section.

A Board of Directors is a paid group of individuals who help guide your company. Typically startups do not have such a board until they raise VC funding.

If your company is not at this stage, consider forming a Board of Advisors. Such a board is ideal particularly if your team is missing expertise and/or experience in certain areas. An advisory board includes 2 to 8 individuals who act as mentors to your business. Usually, you meet with them monthly or quarterly and they help answer questions and provide strategic guidance. You typically do not pay advisory board members with cash, but offering them options in your company is a best practice as it allows you to attract better board members and better motivate them.

Management Team Business Plan Example

Below are examples of how to include your management section in your business plan.

Key Team Members

Jim Smith, Founder & CEO

Jim has 15 years of experience in online software development, having co-founded two previous successful online businesses. His first company specialized in developing workflow automation software for government agencies and was sold to a public company in 2003. Jim’s second company developed a mobile app for parents to manage their children’s activities, which was sold to a large public company in 2014. Jim has a B.S. in computer science from MIT and an M.B.A from the University of Chicago

Bill Jones, COO

Bill has 20 years of sales and business development experience from working with several startups that he helped grow into large businesses. He has a B.S. in mechanical engineering from M.I.T., where he also played Division I lacrosse for four years.

We currently have no gaps in our management team, but we plan to expand our team by hiring a Vice President of Marketing to be responsible for all digital marketing efforts.

Vance Williamson, Founder & CEO

Prior to founding GoDoIt, Vance was the CIO of a major corporation with more than 100 retail locations. He oversaw all IT initiatives including software development, sales technology, mobile apps for customers and employees, security systems, customer databases/CRM platforms, etc. He has a  B.S in computer science and an MBA in operations management from UCLA.

We currently have two gaps in our Management Team: 

A VP of Sales with 10 years of experience managing sales teams, overseeing sales processes, working with manufacturers, establishing new accounts, working with digital marketing/advertising agencies to build brand awareness, etc. 

In addition, we need to hire a VP of Marketing with experience creating online marketing campaigns that attract new customers to our site.

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Other Resources for Writing Your Business Plan

• How to Write an Executive Summary
• How to Expertly Write the Company Description in Your Business Plan
• How to Write the Market Analysis Section of a Business Plan
• The Customer Analysis Section of Your Business Plan
• Completing the Competitive Analysis Section of Your Business Plan
• Financial Assumptions and Your Business Plan
• How to Create Financial Projections for Your Business Plan
• Everything You Need to Know about the Business Plan Appendix
• Business Plan Conclusion: Summary & Recap

Other Helpful Business Plan Articles & Templates

How Do You Draft the Personnel Section of the Business Plan? The Personnel Section of a Business Plan Explained.

One of the key sections of a Business Plan is the section that describes the plan to grow or scale the business.  This often involves hiring staff and staff often represent the single largest ongoing expense that a company will have.  As such, it is important to plan exactly who will be hired, how much they will be paid and when staff will join the team.

What Should a Personnel Plan Look Like?

The personnel section of a Business Plan should contain the following components.

• Job Descriptions – The job descriptions should provide the reader with enough detail so that they understand the job function of prospective hires
• Organizational Chart – An organizational chart show who will work for who and allows a reader to get an overview of the overall management and staffing structure of the company.
• Type of Hire – Staff can either be salaried employees or independent contractors. It is important to distinguish between these two types of workers for tax and other labor compliance issues.
• Salary Amount – Details of either yearly or hourly pay should be included.
• Salary Assumptions – common assumptions include an estimate of raises over time (eg. 5%) and a burden rate assigned to cover company benefits like health insurance (eg. 20% of salary costs)
• When Hires Will Take Place – Staff are usually hired over a period of time and staggered. As such, it is helpful to include detail surrounding when a particular employee will start. If you will have temporary staff of contractors, you should also specify when the employment will end.

What Do the Numbers Look Like?

The sample chart below is an example of the financial section of a business plan. It is for illustrative purposes only and each plan is unique and requires tailoring to meet the specific needs of the company.

What Should the Explanation of a Personnel Plan Look Like?

The detail below is a summary of some of the possible explanation that could be included in a Personnel Plan for the above data.  The description is an excerpt of possible language that could be used.

The company will start out utilizing the three founders and salaries have been allocated for each founder at $100,000 per year. Founder 1 will start taking a salary in FY2015 while the other two founders will start taking a salary in FY2016.    Founders will also take dividends as issued by the Board of Directors.

The budget contemplates hiring 2 employees in the sales area in fiscal 2016 and one software engineer . Until that time, one of the founders who specializes in application development (Hellen Bussiere), will work on developing the tech side of the business.  In addition, the plan includes hiring 1 sales person a year after that. Sales people will make approx.. $25,000 per year.  In year 4, the application will be completed and we will hire a marketing head to promote the product. The marketing head will make $24,000 a year and will be a part time position.  In year 5, a distribution manager will be hired and he/she will also be part time and make $24,000 per year. 

Full job descriptions are included in Section A.2 of the plan. 

The total number of employees at the end of year 5 is 9 people (including the founders).  This is a modest estimate and may increase significantly if more users sign up.

All salaries include a raise estimated at 5% per year.  20% of salary costs have been included for benefits such as health care and 401K matching.

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How To Write the Management Section of a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Ownership Structure

Internal management team, external management resources, human resources, frequently asked questions (faqs).

When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.

Key Takeaways

• The management section of a business plan helps show how your management team and company are structured.
• The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation.
• The internal management section shows the department heads, including sales, marketing, administration, and production.
• The external management resources help back up your internal management and include an advisory board and consultants.
• The human resources section contains staffing requirements—part-time or full-time—skills needed for employees and the costs.

This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.

The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.

The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.

It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.

Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.

If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.

While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.

Advisory Board

An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.

When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.

Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.

Professional Services

Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .

The last point you should address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:

• Detail how many employees your business will need at each stage and what they will cost.
• Describe exactly how your business's human resources needs can be met. Will it be best to have employees, or should you operate with contract workers or freelancers ? Do you need full-time or part-time staff or a mix of both?
• Outline your staffing requirements, including a description of the specific skills that the people working for you will need to possess.
• Calculate your labor costs. Decide the number of employees you will need and how many customers each employee can serve. For example, if it takes one employee to serve 150 customers, and you forecast 1,500 customers in your first year, your business will need 10 employees.
• Determine how much each employee will receive and total the salary cost for all your employees.
• Add to this the cost of  Workers' Compensation Insurance  (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored medical and dental plans.

After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.

When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?

Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.

Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.

What is the management section of a business plan?

The 'management section' describes your management team, staff, resources, and how your business ownership is structured.

What are the 5 sections of a business plan?

A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:

• The  market analysis  outlines the demand for your product or service.
• The  competitive analysis  section shows your competition's strengths and weaknesses and your strategy for gaining market share.
• The management plan outlines your ownership structure, the management team, and staffing requirements.
• The  operating plan  details your business location and the facilities, equipment, and supplies needed to operate.
• The  financial plan  shows the map to financial success and the sources of funding, such as bank loans or investors.

SCORE. " Why Small Businesses Should Consider Workers’ Comp Insurance ."

Management Blog

Management practices based on the time span research of elliott jaques., how to write a personnel plan.

From the Ask Tom mailbag –

Question: As our company looks to its annual planning meeting, I have been asked to prepare a personnel plan for my department. I have never thought about it before. When we get busy, I hire someone.

Response: Many companies are faced with increasing volume, more revenue, more customers, more transactions, more inventory, in short, more work. And that’s the place to start. Define the work.

Start by defining the output, its quality standard, how much and where it ends up (the market).

• Steps required to create the output.
• Oversight required to implement the output, monitoring pace of output, quality of output, quantity of output related to target.
• Systems required to create consistency of output, predictability of output, to determine necessary resources. This would include not only the core systems (functions), but also the supporting systems (functions) necessary to create the output.
• Oversight required to implement all the systems together at the same time, optimized and integrated.

In the list above, I have described four different levels of work, each requiring a different level of problem solving and a different level of decision making.

Your department may only require three levels or two levels of work. It depends on your company business model, and whether your department is a core function in that business model, or a supporting function. Your personnel plan starts by defining the work.

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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

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

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One-page plan template

Download a free one-page plan template to write a useful business plan in as little as 30-minutes.

Sample business plan library

Explore over 500 real-world business plan examples from a wide variety of industries.

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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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Planning for Business Ownership Transition (Infographic)

When it comes to business transition planning many private businesses fail to achieve business transition success due to a failure to plan. 

See how you can get a start on your planning in 3 easy steps: 

1. Plan Early

Business transition is a high-stakes decision that requires beginning the planning process early. Taking a long-term approach allows for optimally designed transition strategy.

2. Define Financial Objectives

Advanced planning also provides time for owners to define their financial objectives and control the how, when and to whom aspects of the transition.

3.  Wait and See

In the face of uncertain economic conditions, many owners take a “wait-and-see” approach to business transition planning. This could lead to missed opportunities. However, shaky economic times can present potential opportunities for transition.

Early development of transition strategy in partnership business transition advisors like the team at Comerica Wealth Management can best position owners to achieve financial goals and business transition success. Our knowledgeable advisors can help you lay out a robust business transition plan and avoid future headaches.

Contact your Comerica Relationship Manager for an introduction to the Comerica Business Transition Planning Team or contact directly at www.comerica.com/businesstransition .

Read the Full Article: Planning for Business Ownership Transition: The Time is Now

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The Purdue Online MBA Offers:

• Balance: While you can complete your courses online when it’s convenient for you, our program provides 1-on-1 support from staff and faculty who host virtual sessions and office hours.
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About the Mitchell E. Daniels, Jr. School of Business

Part of a leading stem university.

Purdue’s Mitchell E. Daniels, Jr. School of Business is part of one of the world’s preeminent engineering, science and technology universities. Our graduates are immediately prepared to contribute and possess the leadership skills to advance their careers, initiate progress and innovation in their fields, and build a better world.

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Application Requirements

To be eligible for admission to this program, the following are recommended:

• At least 24 months of work experience
• The equivalent of a U.S. four-year bachelor’s degree
• A minimum GPA of 3.0

Application review emphasizes your work experience, prior undergraduate academic record and professional training. To be considered for the Purdue Online MBA program, you may be asked to complete an interview with the program manager, and you will be required to submit all the items below:

• Academic Statement of Purpose introducing yourself to the Admissions Committee ( view full details )
• Two letters of recommendation
• Personal History Statement ( view full details )
• Professional resume with education, work experience and training
• Official transcripts for every higher education institution attended. Please note: All transcripts and/or academic documents uploaded by the applicant to the online application system are considered unofficial. Please order your transcripts to be sent directly from your institution to the Purdue University Graduate School at [email protected] .
• Interview feedback

The Online MBA is a rigorous program that requires quantitative aptitude. The Daniels School's online programs admissions team will look for evidence of this in your application via previous coursework. If you feel that you do not have sufficient evidence in your previous coursework to demonstrate this aptitude, you may want to consider submitting a GMAT or GRE score to enhance your application. The GMAT or GRE is not required for admission to the online MBA.

Online Application

When completing your application for the Purdue master of business administration online program, select the following:

• Graduate major: Management (MBA)
• An area of interest
• Degree objective: Master of Business Administration (MBA)
• Course delivery method: Distance (online or off-campus location)
• Fall 2024 Term: August 19, 2024 (application deadline – August 1, 2024)
• Spring 2025 Term: January 13, 2025 (application deadline – December 1, 2024)

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• All applicants must upload to the online application transcript(s) and/or academic document(s) for every institution of higher education attended. If a transcript and diploma/degree certificate is not in English, an English translation (certified by the college or university that issued it) must be uploaded.
• The uploaded transcript and/or academic document must be from the official version of the document. An official transcript bears the original signature of the registrar and/or the original seal of the issuing institution.
• If personal identifying information such as a student identification number or Social Security number appear on the document, REMOVE THIS INFORMATION from your electronic version of your document or mark out the information in black ink before scanning your document.

All transcripts and/or academic documents uploaded by the applicant to the online application system are considered unofficial. Please order your transcripts to be sent directly from your institution to the Purdue University Graduate School at [email protected] . The Purdue University Graduate School reserves the right to require official transcripts and/or academic documents at any time during the admissions process.

Letters of Recommendation

• Two online recommendations are required for your application to be received. No more than two recommendations are needed.
• Recommendations will only be accepted through the online application (no paper recommendations will be accepted).
• We strongly urge (but do not require) that one recommendation be from your direct supervisor.
• Recommendations from friends, family members, acquaintances and other sources unable to evaluate professional or academic qualifications for MBA study are not acceptable.
• We require that recommenders submit the recommendations online (instructions to do so are provided within the online application).

Please note that we will not receive your application until at least two registered recommenders have submitted recommendations through the online application.

Required Essays

Academic statement of purpose (2-pages max).

The Academic Statement of Purpose is an opportunity for you to introduce yourself to the Admissions Committee. In your statement, you should share information about your academic background and training, academic objectives and interests, and why you are a good match for the program to which you are applying.

View more information about the application statement .

Personal History Statement

Your Personal History Statement helps reviewers learn more about you and your potential as a graduate student. Your statement may include relevant information about your leadership roles, community services projects, participation in diverse teams, as well as any barriers you’ve had to overcome to attend graduate school.

View details about the personal history requirements .

Personalize Your Degree Plan

It's Your MBA on Your Terms

Design your own plan of study to fit your individual needs and goals. Graduate in as few as two years, or lighten your course load and take more time. For busy adults balancing work and school, it’s important to be able to slow down when you need to — or speed up when life allows.

You can also customize your MBA by choosing from a wide range of courses that best align to your career plans. Want to further hone your expertise? Add a specialization in one of ten high-demand areas, such as Business Analytics, Machine Learning and AI, and Digital Marketing & Analytics.

Additional Daniels School Master’s Programs

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1 Innovative Institutions: Source: U.S. News & World Report, on the internet at https://www.usnews.com/best-colleges/rankings/national-universities/innovative

2 #9 Best Online MBA in North America: Source: https://ceo-mag.com/wp-content/uploads/2024/04/2024-Global-MBA-Rankings-All-Categories-.pdf

3 Top 10 Public University: The Wall Street Journal/Times Higher Education, on the internet at https://www.timeshighereducation.com/student/best-universities/best-public-universities-united-states ; #7 for Value: The Wall Street Journal/Times Higher Education, on the internet at https://www.wsj.com/articles/college-rankings-list-2022-11632246093

4 Graduates at Fortune 500 Companies: Source: Forbes, on the internet at https://www.forbes.com/sites/michaeltnietzel/2021/09/04/the-universities-with-the-most-graduates-working-at-top-fortune-500-companies/

5 Tuition rate includes fees. Tuition and fees are subject to increase based on approval by the Purdue University Board of Trustees. Financial aid is available to those who qualify.

6 Deposit is applied toward the first semester's tuition upon enrollment.

• Financial Advisor

Financial Planning Basics

Updated: Jun 26, 2024, 4:51pm

No matter the size or scope of your financial goals, a financial plan can help make them a reality.

Financial planning is the process of looking at the current state of your finances and making a step-by-step plan to get it where you want it to be. That may mean devising a plan to become debt-free or figuring out how to save enough money for a down payment on a new home.

This process can include many aspects of personal finance, including investing, debt repayment, building savings, planning for retirement and even purchasing insurance.

Anyone can engage in financial planning—it’s not just for the wealthy. You can get started on making financial goals on your own, and if you choose, you can work with a financial professional to help devise the smartest plan to make those goals a reality.

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5 Steps to Create a Financial Plan

A financial plan is devised of smaller goals or tasks that will help support you along your financial journey. Create a financial plan with these five steps:

1. Identify Your Financial Goals

By identifying your financial goals, you’ll have a clear idea of what you need to accomplish to make them happen. Your goals should be realistic and actionable and include a timeline of when you want to accomplish them.

Making a goal to pay off credit card debt by a certain date, for example, would be an appropriate financial goal that will set you up for success.

2. Set a Budget

Having a clear picture of your finances will make it easier to achieve any financial goals. A budget can help you understand where your money is going each month. It can also help you identify where you may be overspending, giving you opportunities to cut back and allocate that money elsewhere.

One of the easiest budgets to start with is the 50/30/20 budget . This budget plan allocates your monthly income into three buckets: mandatory expenses (50%), savings and debt repayment (20%) and discretionary spending (30%). This is just one of many types of budgeting plans out there.

A budget should be a guide to help you understand your monthly finances and devise smaller goals that will bring you closer to your long-term financial goals. You likely won’t always follow your budget down to every single penny; keeping this in mind will help you stay on track, rather than get discouraged and give up on budgeting altogether.

There are apps out there that make budgeting much easier by helping you visualize your spending and savings choices each month. Some budgeting apps even give you the option to enter your financial goals directly into their platform to help you stay on track. A fully featured budgeting app allows you to track spending, manage recurring bill payments, set savings goals and manage your monthly cash flow.

3. Build an Emergency Fund

Building an emergency fund will help make sure that a financial emergency doesn’t become a catastrophic financial event.

Experts usually recommend having six months’ worth of living expenses saved to cushion you, should the unfortunate unexpected happen, such as losing a job. But six months’ worth of money can be unattainable for those who may be struggling financially, or those living in tight financial means each month.

You can start building an emergency fund by setting a few dollars aside each paycheck. You can start with a small fund goal of $100 to $200 to establish your fund. From there, you can create other smaller goals that will add up to a larger financial cushion. Some budgeting and savings apps also give you the option of rounding up to the nearest dollar in transactions and funnel that spare change toward your savings.

4. Reduce Your Debt

Having to make debt payments each month means you’ll have less money to allocate toward your purchase goals. Plus, carrying credit card debt can be expensive; every month, you’re accruing interest on your balance, which can make it take longer to pay off.

There are a variety of debt payoff methods out there. Two of the most popular include the debt snowball and debt avalanche methods . With the snowball method, you’ll pay off your smallest balance debts first, then make your way to the ones with the higher balances. The debt avalanche, on the other hand, starts with higher interest rate debts first.

5. Invest for the Future

Although risky, investing can help grow your money, even if you’re not wealthy. You can get started with investing by enrolling in your company’s 401(k) plan or opening a low-or-no fee account through an online broker .

Keep in mind that investing always involves some risk; you could end up losing the money you invest. There are also robo-advisors that automatically recommend investments based on your goals and risk tolerance.

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Bottom Line

A financial plan is composed of a series of smaller goals that will help you achieve a larger financial goal, such as purchasing a home or retiring comfortably. A solid financial plan includes identifying your goals, creating a budget, building an emergency fund, paying off high interest debt and investing.

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Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.

• Best Online Advisor for Low Fees 
• Best Online Advisor for Diversified Investing
• Best Online Advisor for 529 Plans
• Best Online Advisor for Financial Planning and Personal Development
• Best Online Advisor for Retirement Saving
• Why You Should Trust Us

Best Online Financial Advisors 2024: Find the Right Fit for Your Needs

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate investing products to write unbiased product reviews.

What Are Online Financial Advisors?

A financial advisor is a catch-all term that includes financial planners and investment advisors. Most online advisors offer investment management — whether it's carried out by a human or a sophisticated computer algorithm — and financial planning services or tools.

Types of Online Advisors

The main types of online financial advisors are: 

• Robo-Advisors: Automated investment platforms (aka robo-advisors) use algorithms to generate a custom investment portfolio based on an individual's risk tolerance, goals, and time horizon. Robo-advisors typically offer low-cost ETFs as a cost-effective way to instantly diversify an investor's asset allocation and mitigate risk. 
• Human Advisors (Virtual): Financial advisors that offer personalized financial planning and investment advice online through virtual meetings, email, and other virtual communication channels. 
• Hybrid Models: Some online brokerages offer hybrid financial advice, combining automated investment advice and management through a robo-advisor and one-on-one consultation from a human advisor. 

Benefits of Using Online Financial Advisors

Online financial advisors allow you to ditch the in-person hassle and access expert financial guidance from your phone or home computer. Online financial advisors leverage investment technology and generally low-cost compared to traditional in-person consultants.  

Not only does it make investing more affordable for many individuals, but clients can more easily adjust and monitor their investments on their own time. Robo-advisor and hybrid online advisors typically offer online dashboards and tools for convenient managing and monitoring. 

Compare the Top Online Financial Advisors 2024

For this list, we didn't consider online advisors that match clients and advisors for comprehensive financial  planning services, such as Zoe Financial or Facet Wealth . Instead, we focused on tech-driven firms where you can access an automated and personalized portfolio and consult a professional for advice when needed.

Here are our top picks for the best online financial advisors as picked by Business Insider editors in 2024.

SoFi Automated: Best Online Advisor for Low Fees 

SoFi Automated Investing supports individual investment accounts, joint accounts, traditional IRAs, Roth IRAs, SEP IRAs, and 401(k) rollovers.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. No account minimum or management fees to invest
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Goal planning and automatic portfolio rebalancing
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Range of other account options across SoFi website
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. SoFi offers complimentary CFP access across all accounts
• con icon Two crossed lines that form an 'X'. No tax-loss harvesting
• con icon Two crossed lines that form an 'X'. No socially responsible portfolio options

SoFi Invest is one of the best investment apps and the best investment apps for beginners. It's a great platform for US investors who are looking for an intuitive online trading experience, an open active or automated investing account, and assets like cryptocurrencies.

• Promotion: None at this time.
• Consider it if: You're new to investing and want to leave the trading decisions to professionals.

SoFi Automated Investing offers individual and joint taxable brokerage accounts , traditional IRA, Roth IRA, and SEP IRA.

SoFi stands out for its lack of advisory fees, free one-on-one consultations with CFPs, portfolio diversity, and goal-planning features. SoFi builds a personalized investment portfolio based on your risk tolerance, goals, and time horizon. Additional SoFi membership perks include loan discounts and career counseling. 

What to look out for: SoFi doesn't have tax-loss harvesting features and limited portfolio diversity. 

SoFi Invest review

Betterment: Best Online Advisor for Diversified Investing

Betterment offers individual or joint accounts, IRAs, trust accounts, and cash reserve or checking accounts.

$0 to open, $10 to start investing ($100,000 for premium plan)

$4 per month (or 0.25%/year) for digital plan; 0.40%/ year for premium plan; 1%/year for crypto portfolios

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. No minimum for standard investing account
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Goal-based planning, tax-loss harvesting, charitable giving, and socially responsible investing available
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Access to certified financial planners
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Mobile app with external account syncing options
• con icon Two crossed lines that form an 'X'. You'll have to pay to consult a human advisor, unless you have the premium plan
• con icon Two crossed lines that form an 'X'. $4 monthly fee (or 0.25% annual fee)

Betterment is best for hands-off investors who want to take advantage of professionally built, personalized ETF and cryptocurrency portfolios. The platform offers CFP access, so it could suit those in search of additional guidance from human advisors.

• App store rating: 4.7 iOS/4.5 Android
• Consider it if: You want access to robo-advice with multiple service levels.

Betterment Investing offers individual and joint taxable brokerage, traditional IRA, Roth IRA, SEP IRA, inherited IRA, and trust.

What stands out:  Betterment is a robust trading platform offering premium plans with unlimited access to CFPs through phone or email. Investors can use the platform's goal-setting feature, ESG investing, automatic rebalancing, and easy-to-use financial dashboard. 

What to look out for:  Accounts with a $100,000 balance can upgrade to get advisor access, but the annual fee increases from 0.25% (an industry low) to 0.40%

Betterment review

Wealthfront: Best Online Advisor for 529 Plans

Fund your first taxable investment account with at least $500 in the first 30 days of account opening and earn a $50 bonus.

$1 ($500 for automated investing)

$0 for stock trades. 0.25% for automated investing (0.06% to 0.13% for fund fees)

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Low annual fee for investment accounts; crypto trust investments available
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Tax-loss harvesting, portfolio lines of credit, 529 college savings plans available
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Cash account
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Mobile app and investing and retirement tools
• con icon Two crossed lines that form an 'X'. You need at least $100,000 to utilize additional investment strategies
• con icon Two crossed lines that form an 'X'. No human advisor access

Wealthfront is one of the best robo-advisor options if you're in search of low-cost automated portfolio management, and one of the best socially responsible investing apps for features like tax-loss harvesting, US direct indexing, and crypto trusts.

• Consider it if: You're balancing several goals and want to streamline your finances.
• Promotion: Fund your first taxable investment account with at least $500 in the first 30 days of account opening and earn a $50 bonus.

Wealthfront Investing offers individual and joint taxable brokerage, traditional IRA, Roth IRA, SEP IRA, trust, and 529 savings plan .

Wealthfront is one of the best online financial advisors for college education savings and cryptocurrency trusts. You can borrow up to 30% of your investment balance at a low interest rate with a portfolio line of credit. Wealthfront also offers personalized recommendations with smart financial planning software. 

What to look out for:  On-staff financial advisors don't offer personalized advice

Wealthfront review

Ellevest: Best Online Advisor for Financial Planning and Personal Development

Ellevest offers two investing portfolios to fit your needs.

$1 - $240 (varies by portfolio)

$54 - $97 annually; $5 or $9/month

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Personalized, automated investment advice with a $0 minimum requirement
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Monthly plans include discounted access to certified financial planners
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Automated IRA accounts and 401(k)/403(b) rollovers available
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Private wealth management for individuals, families, and institutions who have at least $1 million to invest
• con icon Two crossed lines that form an 'X'. No active trading opportunities available; money is mainly invested in stock ETFs and bond ETFs
• con icon Two crossed lines that form an 'X'. You can only open individual investment accounts and retirement accounts; joint accounts or custodial accounts not available

Ellevest is one of the best robo-advisors for goal-focused investing. It could be a good fit if you want automated investing and retirement accounts.

• Consider it if: You're looking for a one-stop shop for financial planning.

Ellevest offers individual taxable brokerage, traditional IRA, Roth IRA, and SEP IRA (all held at Folio Investments).

Ellevest is a comprehensive financial advisor and trading platform built around women's unique needs and challenges. Investors get access to an extensive library of content and advisor-led workshops. Additionally, Ellevest offers a socially responsible investment portfolio and monthly progress reports. 

What to look out for:  Financial coaching costs extra (but members get 30%- 50% off). Access to retirement account management requires an upgrade.

Ellevest review

Ameriprise Financial Investments: Best Online Advisor for Retirement Saving

Ameriprise Financial Services has been operating for 130 years Ameriprise Financial Services is licensed in all 50 states but only has 10 physical locations throughout the US; it's currently headquartered in Minneapolis, Minnesota

Varies by account

$500 annual advisory fee, 2% AUM

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Access to personal finance research and investment tools
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Fiduciary financial advisor access
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Various account and investment options
• con icon Two crossed lines that form an 'X'. High account minimums
• con icon Two crossed lines that form an 'X'. Difficult to navigate website
• con icon Two crossed lines that form an 'X'. Complex fee structure

Ameriprise Financial Services is a brokerage and financial advisory firm best for experienced, passive investors interested in using the site's financial planning services, wealth management tools, and fiduciary advisor access.

Ameriprise Financial Investments offers three managed account options that can be opened as an individual brokerage account, traditional IRAs, Roth IRAs, Simple IRAs, SEP IRAs, 401(k)s, 403(b)s, 529 plans, and Coverdell education savings accounts (CESA). 

Ameriprise Financial Investments is one of the largest registered investment advisors in the US and is best for experienced investors looking for advanced charting and investing features. You'll get access to fiduciary financial advisors for consultations or account management. 

What to look out for: Ameriprise 's managed account fees are high, and it has a complex fee structure. 

Ameriprise Financial Services review

How Much Do Online Financial Advisors Cost?

Financial advisors providing financial advice often charge by the hour, typically between $100 to $300. Advisors creating a comprehensive financial plan tend to charge a flat rate between $1,000 and $3,000. 

If you hire an advisor to manage your investment portfolio, you'll be charged a percentage of your account balance, typically between 1% and 3% annually. In comparison, that's much higher than the fees that the best robo-advisors charge; you get the added benefit of building a relationship with a trusted source who can adjust your strategy as needed, provide personal recommendations, and answer questions when they arise.

How to Choose the Best Online Financial Advisors

The best online financial advisor for you depends on your goals, risk tolerance, investments, and time horizon. If you're a new investor interested in passive investing, an online robo-advisor is likely a good place to start. On the other hand, if you're looking for professional insight and a customized financial plan, you're better off with access to a human advisor through phone or video calls. 

You can also meet with an expert in person for financial guidance. So if you prefer to meet face-to-face, here are some tools to find some in your area:

• This is a database of all CERTIFIED FINANCIAL PLANNER™ professionals who are authorized to use their CFP® marks by the CFP® Board and are accepting new clients.
• Using the advanced search function, you can choose from over 40 focus areas you're looking to get help with and include your current amount of investable assets.
• Click here to visit the CFP Board website .
• This database helps connect young professionals — those in generations X and Y (millennials) — with individual advisors.
• Every advisor holds the CFP® certification, is a fiduciary , does not require a minimum net worth to take on new clients, and does not earn commissions.
• Click here to visit XY Planning Network .
• This platform maintains a database of fee-only financial advisors, not specifically CFP® certificates, who commit to a fiduciary oath once a year. 
• You can filter by location to see a list of advisory firms in your area.
• Click here to visit the National Association of Personal Financial Advisors website .

Online financial advisors are generally trustworthy. The best advisors follow the fiduciary rule, meaning they operate in their clients' best interest and are fee-only. This means client fees are their only compensation, and they don't earn a commission when they invest in certain funds or buy financial products.

Not everyone needs a robo-advisor, but beginners or passive investors looking for a hands-off approach to stock trading may prefer how cost-effective and convenient robo-advisors are. Affordable financial advisors can be hard to come by, so robo-advisors are a great alternative for many people. However, a financial advisor may be better if you need specific advice on your finances or investment strategy or if you're too overwhelmed or confused by your money to plan for retirement or invest in the stock market. 

The cost of an online financial advisor varies from platform to platform and advisor to advisor. The cost largely depends on the services, licensing, account balance, and complexity. Robo-advisors typically charge lower fees than human advisors. 

Why You Should Trust Us: Our Methodology

We Reviewed the best online financial advisors using Business Insider's methodology for rating investment platforms . We compared a long list of Registered Investment advisors (RIAs), considering fees, investment selection, access, ethics, and customer service. The best online advisors have top marks in all five categories. Investment platforms are given a rating between 0 and 5.

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