The 10 Best Books for Writing a Business Plan
- Ivaylo Durmonski
- Reading Lists
There are a lot of insightful thoughts around the concept of planning. In a sense, planning helps you forecast the “weather” of your business. Prepares you for what might happen. And distance you, hopefully, further away from your business going to dust. Most importantly, it allows you to think about the type of tasks you should focus on doing today. Do we know how to plan our business if we’re not business owners , though?
There is nothing wrong with having a regular job.
A lot of people are doing it.
Theoretically, since we’re born. We enter a sophisticated system of government-operated institutions that aim to spit us out after approximately 20 years, ready to help someone else grow his dream business.
You’re thought -sort of – how to plan your career. But you’re never thought how to plan your business.
Regardless of your current situation. The idea of starting a business or learning basic business skills will surely reach your mind at some point.
If you’re still not sure whether or not this is something you can achieve on your own. The business books mentioned below are specifically selected to boost your planning skills.
These books, of course, primarily serve business owners or people that are dreaming of becoming such.
Yet, these reads will definitely expand your horizon even if you don’t plan on starting your own thing right now. They will give you a perspective that will force you to think long term – the best way of thinking.
The 10 Best Books for Writing a Business Plan:
1. the goal by eliyahu goldratt, 2. the one page business plan for the creative entrepreneur by jim horan, 3. mind your business by ilana griffo, 4. business plan template and example by alex genadinik, 5. the best-laid business plans by paul barrow, 6. smart business by ming zeng, 7. measure what matters by john e. doerr, 8. your next five moves by patrick bet-david, 9. business model generation by alexander osterwalder, 10. playing to win by a.g. lafley.
What’s the book about?
The Goal by Eliyahu M. Goldratt is a novel. A fascinating story that describes the life of a business owner who is facing a series of obstacles that, if not handled well, will lead to a catastrophic ending of the company he is running. Mr. Goldratt presents this fictional business environment to teach us an important lesson: That the speed of a convoy is determined by the slowest ship.
Who is it for?
Especially interesting for people who already own businesses but are struggling to grow. For people who can’t adequately articulate what is wrong with what they are doing. Eliyahu Goldratt teaches us that we should observe a business as a series of systems . The faster the systems operate. The faster you’ll grow. To speed up this process, first, you need to identify the weakest link and improve upon the process.
Thought-Provoking Quote:
“Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link.” Eliyahu M. Goldratt
Get the book | Read my summary
In this book, Jim Horan compiles his years of experience as a Fortune 500 executive and business consultant. The pages will help you quickly form a simple business plan based on the most successful companies in the world. The book goes through the 5 stages every organization hoping to make a profit from their products and/or services needs: Vision, Mission, Objectives, Strategies, Action.
This resource is great for people just starting their online or offline venture. Folks who are considering the idea of starting a business but are not quite sure what to do first. The One Page Business Plan For Creative Entrepreneur will show you the exact steps you need to begin your entrepreneurial journey.
Get the book
This long-winded title is here to show you how to start a business from scratch. Ilana Griffo, the author, shares her journey on how she started her side hustle which eventually become a six-figure design studio. A lot of readers describe this title as everything you need to learn about being your own boss. Of course, it all starts with planning.
Great book for anyone dreaming about starting a creative project both online and/or offline. The honest tips and the real-world insights will show you exactly what you need to do. How to start and how to plan your day. The book is the perfect companion that will be your guide in your money-making journey.
Simply put, this title will help you create a professional business plan. The author even boasts that you will do the planning in minutes. Not that you should rush. But the included exercises and the questions Alex Genadinik is asking in the book will help you think critically about your overall structure and the products you will be creating – or refining if you already have existing goods.
The program presented in this title is used by a number of universities to teach students how to plan better. As stated in the description, the book… “will help you identify the most effective business strategies for your situation.” You will start by writing a short 3-sentence business plan which will focus you on what’s truly important.
“Product: What is the product or service? What benefit does it provide and to whom? Can you make it inexpensively and of high quality? What form will it take? Website? App? Brick and mortar business? Marketing: Identify a few of the most effective marketing strategies to promote your business Finances: What are the major sources of revenue? How will this happen profitably? When will you achieve financial sustainability? Do you need to raise money for this? How much?” Alex Genadinik
The first book I read on business planning. Foreword by Richard Branson. This title is dated, but still adequate even though everything is happening online these days. The text will teach you the most important ideas around planning a business. It’s full of case studies about different projects and ideas. The author carefully explains how to present your business plan to others in a way that everyone will get.
This book will explain in a simple way why it’s essential and how you should approach the subject of planning in general. The ideas inside are great for people who are looking to raise money or get approval from seniors for their proposed course of action. Also, if you’re still not convinced that you need planning, this book will surely change your perspective.
Written by Ming Zeng, the former Chief of Staff and strategy adviser to Alibaba Group’s founder Jack Ma. This book presents a framework that will help business owners create a winning future strategy for their companies. The titles reveal some of the revolutionary practices Alibaba developed to rapidly increase efficiency.
We commonly read about what Google is doing or about what other Silicon Valley unicorns are working on. It’s a good idea to take a fresh eastern perspective on how to operate your business. Smart Business will show you how to use cutting-edge technologies to plan and scale your business.
Measure What Matter will teach you how to use Objectives and Key Results (OKRs) as an approach to make decisions in business. The legendary John Doerr has helped some of the best companies in the world to scale and exceed their yearly goals by using this simple method.
With time, every owner begins to collect all kinds of data to measure whether or not his project is succeeding. Sadly, many entrepreneurs end up being fixated on the wrong things. This book will explain what you need to measure and why. Helping you focus on the right things so you can reach explosive growth.
“We must realize—and act on the realization—that if we try to focus on everything, we focus on nothing.” John Doerr
In short, this book is about figuring out what you should do next. Taking a holistic view of your business is always a good way to think about where you plan to go. Occasionally, though, you also need to think and plan about what you should do right now – planning your next few moves. The steps inside this title will help you gain clarity on what you really want, who you want to be, and what to do to get these things.
For those who are not only working on businesses, but in business as well. Patrick Bet-David explains how to not let emotions cloud your judgment. How to switch from a broad view of your business to a narrower view. Essentially, the lessons inside will help you identify your true self. Understand who you want to be and where you want to go, both in your life and in your business.
“Your vision must align with who you want to be. Your choices must align with your vision. Your effort must align with the size of your vision. Your behavior must align with your values and principles.” Patrick Bet-David
Full of visual elements, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers will help you soak up the knowledge and figure out your own business model. This is not your regular book where you’ll be presented with a wall of text. The title is full of infographics and design elements that will prompt you to actively work on defining your business plan and your strategy.
I’d say that this book is for people who are kind of tired of the traditional corporate-heavy jargon that is usually part of business literature. This title combines useful information and presents it in an easily digestible matter that will surely increase your comprehension and your participation when using the material.
“People are moved more by stories than by logic. Ease listeners into the new or unknown by building the logic of your model into a compelling narrative.” Alexander Osterwalder
Written by a long-standing Procter & Gamble Chairman and CEO, this book might seem a bit dry for your taste. Well, it surely is. Rarely anyone below CEO will relate to the mentioned examples. Yet, this read will change the way you think about your business. You’ll become more strategic with your daily decisions. You will become better at identifying what to do and what not to do.
Great companies do not become great by accident. They become great thanks to the strategic choices they make. Even if you don’t end up getting the book, simply consider the title for a moment: “Playing to Win: How Strategy Really Works”. Now, ask yourself, are you playing to win, or are you simply playing? This question alone will disturb your current processes and assist you in finding the best course of action for your business.
“The heart of strategy is the answer to two fundamental questions: where will you play, and how will you win there?” A.G. Lafley
Some Closing Thoughts
Business planning is important for various reasons.
Not only you’ll get clarity on where you’ll want to go. But you will also set a to-do list that will portray how to get to where you want.
More specifically, conducting a business plan will force you to think about what type of business you want to create. Understand your core motivators. Help you find your unique proposition and how you are different from the rest of the businesses out there.
I’ve hand-picked the selection of business books above so you can plan better. Of course, you don’t need to read all of the titles. Usually one or two from the list is enough to get you moving in the right direction.
If you’re looking for more reads on the topic. Make sure to check my must-read business books list. Or, the selection of books on how to start a business (plus my business book summaries ).
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7 Top Business Plan Books for New-age Entrepreneurs
Free Ultimate Guide On Writing A Business Plan
- October 18, 2023
12 Min Read
Business Plan books are the first thing to go for once you have decided on the idea you want to pursue as an entrepreneur.
Starting up as an entrepreneur is not as simple as it seems. Transforming your idea into a business that creates value for the world is a long process.
The process is full of uncertainties, hurdles, and burnout. To make consistent efforts without giving up, you need a plan you can rely upon.
A plan that helps you in making wise decisions in your entrepreneurial journey is known as a business plan.
It also helps in refining processes and keeps you in line with your business goals.
Now, how would you create a business plan?
Well, you can anyhow get to know what it contains. However, to easily create a business plan that covers all aspects of your business, you must read these books.
In this article, we are going to discuss the 7 top business plan books written for ambitious entrepreneurs like you!
Best Business Plan Books
- Art of the Start 2.0
- The Successful Business Plan: Secrets and Strategies
- The Founder’s Dilemma
- The One-Page Business Plan for the Creative Entrepreneur
- The Secrets to Writing a Successful Business Plan
- Anatomy of a Business Plan
- The Complete Book of Business Plans
1. Art of the Start 2.0
Goodreads rating: 3.87/5
The author of this book is American millionaire Guy Kawasaki. Though his name is enough for anyone to stand up from their seats let me tell you a few things about him.
- He worked with Apple in 1984 as a part of the marketing team for Macintosh computers.
- He is the author of 12 books including The Art of Social Media, and Enchantment.
- He is currently working as the chief evangelist of Canva which is a graphic designing software.
Now coming to what this book holds for you, it’s one of those books that focus on transforming your business idea into a full-fledged organization.
Guy Kawasaki explains why it is important to have a vision and how you, as an entrepreneur, can feed your team with the same vision.
If your team does not adhere to the same vision, there will always be chaos in the workspace.
You must also share stories about your product and your journey. Everyone loves stories. You don’t have to write a 300-page book but a few social media posts, and videos that resonate well with your target audience.
The book also guides entrepreneurs while hiring. It tells you to hire people who are new in the industry. They are most likely to innovate new products as they consistently ask questions.
Key Highlight:
This book will help you in writing a business plan along with guiding you in various steps of entrepreneurship. This book holds something for every aspect of entrepreneurship.
It also stresses how you can use the internet and cloud tools to make the processes more accessible and more efficient. In the modern era, businesses are equipped with tools that are affordable and accessible to everyone.
Moreover, the book also throws light on socializing and partnering with the right people for leadership roles or to get funding.
By reading this book, you will feel more powerful as an entrepreneur and will be ready to take on challenges that come along with entrepreneurship.
This book doesn’t sound like rhetoric and probably that’s why this book received appreciation from all across the world.
Book Link- Art of the Start 2.0
A reader’s review:
The focus is on tech entrepreneurs. While much of the advice is applicable to other industries, the book will hit the bullseye specifically with those starting technology businesses.
Anita Campbell (via Goodreads)
2. The Successful Business Plan: Secrets and Strategies
The author of the book is Rhonda Abrams who has written more than 12 books on entrepreneurship. Being an entrepreneur herself, the knowledge she shares is absolute gold and trustworthy.
She also writes one of the most popular columns in the US known as Small Business Strategies.
Let us now discuss what Rhonda Abrams has taught in her book.
The Successful Business Plan: Secrets and Strategies is a complete guide for anyone stuck in writing. It is one of those books that give you a push to start working on your idea.
This book contains various worksheets and charts which makes it consumable as well as practical.
You will get enough examples of various parts of a business plan , giving you an in-depth idea of what it looks like and how it is written.
This book not only teaches you to write a business plan that reminds you about your vision but also this plan can help you get investors on board.
It also equips you with strategies to get funds at the best possible rates and also to minimize the costs involved in running a business.
It gives you an in-depth understanding of positioning your brand in the market to gain the attention of your target audience and thus derive maximum profit.
Moreover, you can also use it for competitions related to showcasing plans for their businesses. The book is used by many entrepreneurs and is recommended to every small business.
Book Link- The Successful Business Plan
There’s enough information here to help you get almost any business started. This is a proven source, for it’s been through several re-prints since 1991.
Jeffrey Brown (via Goodreads)
3. The Founder’s Dilemma
Goodreads rating: 4.01/5
The book, The Founder’s dilemma, is one of the best business plan books by Noam Wasserman. Apart from this, he has written another bestseller known as Life is a startup.
Noam Wasserman served as a professor at Harvard Business school for 13 years and is currently working at the University of Southern California as a founding Director at the Founder Central Initiative.
The book he wrote is an absolute beauty. Not because he has told some hidden secrets but because he has addressed a problem that many entrepreneurs often ignore.
And that problem is the company’s leadership. You might have a billion-dollar business idea and even have cracked the tech for it, but you might still fail because of listening to the wrong advice.
If you want your business to not suffer due to wrong decisions made by top leadership, you must read this book.
This book will help you in deciding whom you want to work with, and how to share the equity among co-founders and employees without being emotional.
However, this book might not be useful for small businesses but is a gem for someone planning to launch a high-growth business.
Book Link – The Founder’s Dilemma
I’ve never seen a book before that was particularly helpful – to a founder – about the wide range of issues a founder will face.
Brad Feld (via Goodreads)
4. The One-Page Business Plan for the Creative Entrepreneur
Goodreads rating: 3.86/5
The author of this mind-blowing book is none other than Jim Horan.
Known for his expertise in solving complex business problems , Jim has helped many entrepreneurs in turning their businesses into profit-making machines.
Jim Horan has also been a Fortune 500 executive and has written six books in the One Page Business Plan for Creative Entrepreneur series.
This book is quite different from other books as it is written for entrepreneurs who do not understand a lot about business figures but want to get started soon.
There’s a saying that if you cannot write your business plan on a single page, you are probably doing it wrong.
The book enables you to write it in a couple of hours which includes your mission, objectives, and plans.
It will be crisp and easy to understand for your investors as well as the team. In this fast-moving world, it becomes really uncomfortable to give a week preparing a business plan.
You have the idea and with the help of this book, you can turn the idea into a business in no time.
Having said that, this book is not recommended to someone who is building a high-growth company or a business with many manufacturing units.
This book is specially designed for small businesses to increase their profits and improve their vision.
Book Link – The One-Page Business Plan
One of my favorites! I have used these templates many times. It really forces you to be concise and focus on your vision. Highly recommend!
Teri Temme (via Goodreads)
5. The Secrets to Writing a Successful Business Plan
Goodreads rating: 3.70/5
The author of this book Hal Shelton is an extremely experienced executive who has worked with many corporations, non-profits, and investment companies.
Hal Shelton completed his BS from Carnegie Mellon University and then pursued an MBA from the University of Chicago.
The secrets to writing a successful Business Plan focus on each section of the plan to help you create one that stands out in front of the investors.
The book also informs you about the common errors entrepreneurs make while writing. These errors sometimes cost very high as they might create confusion for investors as well as for the team.
You will also learn to do the market analysis and write the same in your plan. You will be able to answer questions like how big is the market and whether it is sufficient to run a successful business or not.
Investors receive a lot of business plans and going through each one of them is not feasible. Therefore writing an executive summary becomes extremely important.
The executive summary is an easy way to grab investors’ attention and help them understand your business without going through lengthy documents.
If you are launching a non-profit organization, this book can help you in many ways as a section of the book is dedicated to non-profits.
Moreover, the book also consists of secret strategies for writing a business plan and getting bank loans or funding from investors.
Book Link – The Secrets to Writing a Successful Business Plan
This book provides a very solid foundation to write your plan. The author also provides excellent examples and instructions as to what to and not to do in writing your business plan
Kirk G. Meyer (via Goodreads)
6. Anatomy of a Business Plan
The author of this book, Linda Pinson, has worked very closely with the U.S. small business administration to write the government business plan publication.
She has also been honored as Education Advocate of the year and SBA regional women in Business advocate of the year.
Apart from this book, she has written many books on entrepreneurship such as Keeping the books and steps to start a small business startup.
This is one of the best business books for people who do not know anything about business plans.
This book provides you with an in-depth understanding of different business plans and will enable you to choose your ideal kind.
After reading the book, you will learn to update your plan according to the needs of your business and the position of your brand in the market.
The author also highlights the importance of mentioning the table of contents and executive summary in navigating smoothly through the book.
Apart from this, it also throws light on how you can efficiently market your business. You will also learn how to mention the financials of your company which is an important thing to do.
The Anatomy of a Business Plan also contains five real-life business plans which give you an understanding of how successful businesses can be explained in a few pages.
You also get a few worksheets which makes the overall experience of reading the book delightful.
Book Link – Anatomy of a Business Plan
This book is like “a mentor for your business plan”. Really informative and helpful.
Marvin Musfiq (via Goodreads)
7. The Complete Book of Business Plans
Goodreads rating: 3.47/5
The authors of this book are Brian Hazelgran and Joseph A. Covello. Both of them have a great understanding of how businesses operate in this book. They have told us that one size doesn’t fit all.
That means business plans for different businesses cannot be written in the same way.
This book contains 12+ plans that give you an idea of how you write one for yourself.
This book also focuses on how you should bring people into your business and what vision you should have to run the business for decades.
Moreover, when you read the book you will have to ask a lot of questions to yourself. The book will compel you to ask questions yourself that are immensely important before writing it.
Once you give satisfactory answers to the questions asked, you will feel more motivated to start a business , and writing a business will look like a cakewalk.
The above quote shows how important it is to plan your business and create a visionary plan for your business.
Book Link – The Complete Book of Business Plans
Great book encompassing everything about writing business plans.
Denny Troncoso (via Goodreads)
Bottom Line
All the Business plan books that we discussed above are going to help you in some way or the other.
But don’t worry you don’t need to read all of them. Just figure out where you stand and where you would want to go and select a book accordingly.
Innovative tools present in the industry like Upmetrics have helped many entrepreneurs in business and financial planning. If you need more help writing a perfect business plan, check out Upmetrics NOW and grow 2X faster.
Build your Business Plan Faster
with step-by-step Guidance & AI Assistance.
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- How to Design a Compelling Business Plan Cover Page
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About the Author
Upmetrics Team
Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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19 Best Business Plan Books of All Time
Our goal : Find the best Business Plan books according to the internet (not just one random person's opinion).
- Type "best business plan books" into our search engine and study the top 5+ pages.
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Last Updated: Monday 1 Jan, 2024
- Best Business Plan Books
The One Page Business Plan for the Creative Entrepreneur
The fastest, easiest way to write a business plan.
The Art of the Start 2.0
The time-tested, battle-hardened guide for anyone starting anything.
Guy Kawasaki
Successful Business Plan
Secrets & strategies.
Rhonda Abrams
The Secrets to Writing a Successful Business Plan
A pro shares a step-by-step guide to creating a plan that gets results.
Hal Shelton
The Lean Startup
How today's entrepreneurs use continuous innovation to create radically successful businesses.
The Founder's Dilemmas
Anticipating and avoiding the pitfalls that can sink a startup.
Noam Wasserman
How to Write a Business Plan
Mike P. McKeever
The Complete Book of Business Plans
Simple steps to writing powerful business plans.
Joseph A Covello
The 1-Page Marketing Plan
Get new customers, make more money, and stand out from the crowd.
Business Model Generation
A handbook for visionaries, game changers, and challengers.
Alexander Osterwalder
Starting a Business QuickStart Guide
The simplified beginner’s guide to launching a successful small business, turning your vision into reality, and achieving your entrepreneurial dream.
Ken Colwell
Mind Your Business
A workbook to grow your creative passion into a full-time gig.
Ilana Griffo
Writing Winning Business Plans
How to prepare a business plan that investors will want to read and invest in.
Garrett Sutton
Burn the Business Plan
What great entrepreneurs really do.
Carl J. Schramm
Anatomy of a Business Plan
The step-by-step guide to building a business and securing your company's future.
Linda Pinson
The Book on Business Planning
Writing a Convincing Business Plan
Arthur R. DeThomas Ph.D.
Hit the Deck
Create a business plan in half the time, with twice the impact.
David Ronick
Creating a Business Plan For Dummies
Veechi Curtis
- 12 Books You Should Read Before Starting a Business www.businessinsider.com
- Business Plan Books www.mymoneybooks.com
- The 9 Best Business Plan Books www.thebalancesmb.com
- 20 Best Books on The Business Plan - Bigger Investing www.biggerinvesting.com
- 20 Best Books on How to Write a Business Plan in 2023 www.profitableventure.com
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The Business Plan Workbook Seventh Edition
- ISBN-10 0749464615
- ISBN-13 978-0749464615
- Edition Seventh
- Publisher Kogan Page
- Publication date May 28, 2012
- Language English
- Dimensions 6.3 x 0.78 x 9.18 inches
- Print length 348 pages
- See all details
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Editorial Reviews
About the author, product details.
- Publisher : Kogan Page; Seventh edition (May 28, 2012)
- Language : English
- Paperback : 348 pages
- ISBN-10 : 0749464615
- ISBN-13 : 978-0749464615
- Item Weight : 1.18 pounds
- Dimensions : 6.3 x 0.78 x 9.18 inches
- #1,255 in Business Entrepreneurship
- #2,441 in Business Development
- #9,932 in Strategic Business Planning
About the author
Colin barrow.
Educated at Sandhurst and Cranfield, Colin Barrow is the author of more than 30 books in the fields of entrepreneurship, business management and international property development. His books have been published by the BBC, The Economist, John Wiley, The Daily Telegraph, The Sunday Times and Kogan Page. He has authored or co-authored ten books in the Dummies series and been translated into a score of languages including Spanish, Chinese, Arabic, Russian, Georgian, Romanian, Polish and Bahasa Indonesia. Two of his books formed the core of Microsoft's Business Plan Writer, a project on which he was a consultant advisor.
Following a career in business where he held senior staff and line positions, including that of managing director of a manufacturing enterprise with multi -plant and multi-country operations he was Head of the Enterprise Group at Cranfield School of Management, a leading International Business School, for ten years. He has been a visiting professor in universities in the US, Europe and the Far East, and is currently an Academic Governor of Richmond, The American International University in London and a Visiting Fellow of Cranfield School of Management.
For five years he was a non-executive director of a high tech venture capital fund, has sat on Government task forces and is now strategic advisor to a number of business owners.
As well as his own books he currently writes freelance, ghost writing and 'Anglicising' books for American authors and he lectures extensively on business topics. You can hear Colin's podcast on team building at http://www.morethanbusiness.com/Knowledge-Centre/Podcasts/Business-Networks
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15+ Business Plan Books for Free! [PDF]
Planning in business is of vital importance for the founding of any type of company. This is why we bring you this collection of business plan books in PDF format so you can start your adventure as it should be, with foresight and order.
A business plan is a written document, of a formal nature, with a logical, coherent and progressive order that has the purpose of carrying out a set of actions indicated in it. It is a kind of guide or map that takes into account current and future opportunities and obstacles that may arise in the specific context of the business .
Therefore, we invite you to learn how to make one successfully, using as a guide our selection of more than 15 books of business plans in PDF format , to which you have immediate and free access, below.
Here we present our complete selection of Business Plan Books:
South Dublin County Enterprise Board
Les Nunn and Brian McGuire
Cole Ehmke,Jay Akridge
Donald J Reilly
Dongol Rina,Neupane Basudha
Rodney B Holcomb,Philip Kenkel,Linda Blan Byford
University of Cambridge
Rajdhani College
Smt Therese Francis
The Office of the Comptroller of the Currency
Dr Babafemi Oyewole
The Gauteng Enterprise Propeller
Texas A and M AgriLife
Business Plan Guidelines
Esade Library
Beef Cattle Research Council
Community Business Development Corporation
Lake Agassiz Development Group
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Orion Advisor Tech: How to Start Your Breakaway Firm with a Full Book of Business
Financial advisors thinking about breaking away from their current firm have a lot to think about, between legal costs, a dizzying number of custodians and technology partners to choose from, and keeping their new company a secret from their current employer until they’re ready to resign. But even with all that, the top concern for many comes back to the clients they’ve been serving for years and sometimes even decades—especially in our current environment.
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What’s a Breakaway Compensation Plan?
Breakaway compensation plans are the oldest of the three common compensation plan types. They’ve been around since the 1970s. To this day, they’re the most popular compensation plan among party plan companies. A breakaway compensation plan uses two primary bonuses and two defined sales force classifications: salespeople and sales leaders (also known as breakaway distributors). A breakaway compensation plan pays salespeople a commission on group volume and sales leaders a generation commission.
Salesperson commission paid on group volume
Salespeople earn a commission on their group volume. This is typically either a level commission or a stairstep differential commission. A level commission pays distributors a percentage on a certain number of levels of their downline. A stairstep commission is a type of differential commission comprised of progressive steps which have specific requirements. As distributors meet the requirements to climb the steps, they earn increasing percentages on their personal and group volume.
Groups are divided by breakaway distributors. Let’s say we have a breakaway distributor named Karen in the tree. Her group contains everyone beneath her who hasn’t reached the breakaway rank. When someone beneath her reaches a breakaway rank, that person literally breaks off into their own group. All the volume generated beneath the breakaway is now in that breakaway’s group.
Let’s say Karen is a salesperson just starting out. Here’s what her group looks like right now.
Here, Karen receives a level commission payout. She gets 5% on each member of her group. She’s inside the group of the breakaway above her but everything below her up until the next breakaway is her group for payout purposes. In a level commission, she gets a certain percentage on a certain number of levels. Here she qualifies for two levels and she get 5% on all the volume she qualifies for. If everyone in this tree generates $100 of personal volume (PV), she’ll get a $20 commission.
If this commission is a differential, the organization of the people in her group will have a complicated effect on how much she earns. You can read a more detailed explanation of differentials here . In brief, a differential commission pays Karen the percentage she qualifies for minus the percentages the people beneath her have already been paid. Here’s an example differential commission:
If I’m at rank 4, and a rank 1 beneath me generates $100 of volume, but there’s a rank 2 between me and that rank 1, I get 15% minus the rank 2’s 5%. Here’s Karen again, but now she’s getting a differential commission.
As a rank 3, she qualifies for 10% on all the rank 1s beneath her. But she’s blocked from getting paid on the volume from two of them because another rank 3 has already taken that 10%. If everyone generates $100 of volume, Karen gets $10.
Now let’s look at Karen’s commission if she becomes a breakaway.
Karen is now the breakaway distributor which means she’s at the top of the differential. She earns the full percentage she qualifies for on everyone on her first level. Beyond her first level, she earns the difference between what she qualifies for and what other distributors have already taken. She has a rank 1 beneath her with a rank 2 in between. The rank 2 takes 5%, leaving 15% for Karen. She has three rank 1s beneath her with a rank 3 in between. The rank 3 takes 10%, leaving Karen 10%.
The next breakaway beneath Karen is a rank 5, like her. She isn’t qualified to earn on his volume and, because he takes the remaining differential for the distributors beneath him, she doesn’t get a differential commission on any of them either.
Sales leader generation commission
As a sales leader, or breakaway distributor, Karen earns the group volume commission and she gets a generation commission. The generation commission pays a percentage on the group volume of breakaway distributors beneath her. Many companies call this a “sales leader override.” The percentage Karen earns on the generations beneath her is less than what she earns on her own group.
We’ve used a level group volume commission in this example for the sake of ease, but remember this is only one way to pay this bonus. Again, if everyone in this tree generates $100 PV, Karen gets a $45 commission on her group (5% of $900) and a $24 commission on her first generation (2% of $1,200), and a $5 commission on her second generation (1% of $500). These percentages are just examples—each plan will have its own specific rules for how much distributors get on each generation.
A breakaway/sales leader is always going to make more money on their immediate downline than they make on the breakaways/sales leaders in their downlines. On group volume, Karen may earn as much as 15-25%, and on her breakaway volume, she may earn as little as 3-6%.
Breakaway qualifications
The way that distributors qualify for the breakaway rank varies from company to company. In the example trees above, Karen qualifies by having four personally sponsored active first-level enrollees. If one of those four reaches the breakaway rank, she must enroll another active salesperson to retain her breakaway rank. Here’s an illustration of that process:
Distributors have to keep an eye on their organizations, anticipate when downline distributors are going to break away, and prepare accordingly to stay qualified. But even if Karen stays qualified as a breakaway, she’s going to lose some commission dollars when someone beneath her breaks off. Note that in the example above, the commission she received at the beginning was greater than the commission she received at the end. Let’s look at a more detailed example.
Figure 1 Commission before downline breakaway
Figure 2 Commission after downline breakaway
Karen’s organization grew, but her pay went down. This is a downside to the breakaway. The pay can change radically from month to month. This can frustrate your distributors but it also incentivizes them to continue enrolling and building their personal group.
Strengths of breakaway compensation plans
- Having one commission type for each of the types of distributors makes it much easier to set the percentages and qualifications. In other words, you can better take care of professional distributors of both kinds with this plan.
- The plan does a great job of paying salespeople. Of all the standard compensation plans, this one has the strongest potential in this area. Reaching the breakaway rank allows Karen to make a lot more money on her customers and brand-new distributors. Consequently, she has a lot more incentive to work with the people who need her help. On the people who have advanced to breakaway/sales leader, she’s now earning a smaller percentage. However, she gets paid down numerous levels of sales leaders—successful people—so she earns the commission on a lot of group volume.
- The plan uses level commissions for paying sales leaders. That is the most successful method for paying sales management commissions.
Weaknesses of breakaway compensation plans
- This plan is sometimes viewed as a compromise plan.
- Because many people—probably 90%—don’t build their own organization, they stay in other distributors’ personal groups.
- When two people in a line have the same rank, the differential is zero.
- This plan creates a treadmill effect: Each time Karen brings someone in, she has to qualify those group volumes, and as people break away, she has to replace that lost volume.
- They can be confusing and difficult to explain.
Want help designing your startup’s breakaway compensation plan? Reach out to us at MLM Compensation Consulting . We offer data-driven compensation plan design and analysis.
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Breakaway Business Coaching
Janet K. Fish
A reformed corporate executive turned serial entrepreneur, I have found my passion in coaching others. I’ve been coaching entrepreneurs since 2005, helping people start or grow their business, make lots of money and invest it for long-term growth and security.
I’ve worn many hats in my career, sales executive, real estate investor and developer, internet marketing specialist, author and coach.
My real passion and calling is coaching. Coaching is about believing in someone often before they believe in themselves. I’ve coached over 1000 of people in 16 countries, helping them to become the best, most successful entrepreneur they can be. With the help of every one of my clients I’ve developed a 10-step methodology for building a profitable business. If you do the work you will succeed, guaranteed!
Learn more about the 10-step process in my Amazon Best Selling book – Quit Your Day Job – 10 Steps to Financial Freedom. Get your copy HERE.
I’m fascinated with the entrepreneur mindset and how entrepreneurs think differently than those that have jobs. I created the Breakaway Entrepreneur podcast to explore what makes entrepreneurs unique. Each week we discuss how we think differently, what drives us towards success and how we’ve overcome challenges to breakaway from our competition.
or on any of you favorite podcast directories.
Life is seldom all about work; for me it’s all about the freedom to do what I want, when I want, with whomever I want. I split my time between South Lake Tahoe (I love to ski!) and Sacramento.
If you want to take your business to the next level or develop a clear and actionable plan to grow your business, let’s talk.
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hese four steps in mind to make the process a little easier.1 Know when to contact Due to rules like Broker Protocol2, you can't talk to your clients about your move before you leave your. current employer and oficially start working at your new RIA. The first order of business is to know what client information you can bring with you (names ...
The Goal by Eliyahu Goldratt. 2. The One Page Business Plan for the Creative Entrepreneur by Jim Horan. 3. Mind Your Business by Ilana Griffo. 4. Business Plan Template And Example by Alex Genadinik. 5. The Best-Laid Business Plans by Paul Barrow.
How to Write a Business Plan. $14.62. (238) Only 1 left in stock - order soon. Step-by-step advice on preparing a business plan. You need a sound business plan to start a business or raise money to expand an existing one. For over 30 years, How to Write a Business Plan has helped fledgling entrepreneurs―from small service businesses and ...
The Founder's Dilemma. The One-Page Business Plan for the Creative Entrepreneur. The Secrets to Writing a Successful Business Plan. Anatomy of a Business Plan. The Complete Book of Business Plans. 1. Art of the Start 2.0. Goodreads rating: 3.87/5. The author of this book is American millionaire Guy Kawasaki.
Janet is the founder & CEO of Breakaway Business Coaching. As a Master Business Coach, Janet has helped over 1000 entrepreneurs find success building their own business. She's the host of the Breakaway Entrepreneur Podcast and author of the Amazon best-selling book Quit Your Day Job, 10 Steps to Finding Financial Freedom - 2nd Edition
19 Best Business Plan Books of All Time. 19 Best. Business Plan. Books of All Time. Our goal: Find the best Business Plan books according to the internet (not just one random person's opinion). Here's what we did: Type "best business plan books" into our search engine and study the top 5+ pages. Add only the books mentioned 2+ times.
Step-by-step advice on preparing a business plan You need a sound business plan to start a business or raise money to expand an existing one. For over 30 years, How to Write a Business Plan has helped fledgling entrepreneurs—from small service businesses and retailers to large manufacturing firms—write winning plans and get needed financing. This bestselling book contains clear step-by ...
Colin Barrow is the author of more than 30 books in the fields of entrepreneurship, business management and international property development, and he has authored or co-authored ten books in the Dummies series. His books have been published by the BBC, The Economist, John Wiley, The Daily Telegraph, The Sunday Times and Kogan Page. Following a career in business where he held senior staff and ...
Starting a Business QuickStart Guide by Ken Colwell PhD MBA is a comprehensive and practical book that provides step-by-step guidance for aspiring entrepreneurs. It covers everything from developing a business idea to creating a business plan, securing funding, and launching the business. With real-life examples and actionable tips, this book ...
Several times a year, The Wall Street Journal publishes Special Reports entitled Breakaway: A Focus on Small Business. This ongoing feature is one of the most popular in both the print and interactive versions of the Journal. With 25 million small businesses in the United States employing more than half of all non-public workers, generating most of the gross domestic product, and creating most ...
August 13, 2015. There are three common types of MLM plans: breakaway, unilevel, and binary. With a unilevel plan, distributors can put a lot of people on their first levels and they can build as many legs as they want. With a binary plan, distributors can only have two legs. In a breakaway, rather than legs, you build a team of distributors ...
A breakaway compensation plan is one of the three foundational MLM commission structures in the direct selling industry. And, until the '90s (when binary and unilevel plans became popular), it was the only type of strategy that proved it could sustainably pay distributors and fuel its company with a steady stream of revenue. Read on for a rundown of how they really work and some of the pros ...
Get your book written, hire a copywriter to edit the book and get it out there. Do I need a publisher? I've written 3 books, one with a publisher and a ghost writer (I spent $15,000), one with a small publisher (I spent $6,600) and one that I self published using Word and CreateSpace (I spent $0).
This book, Breakaway Business Plan, will teach you how to trade your 9-to-5 job for a new life where you choose the hours, locations, and business opportunities that work best for your lifestyle. You'll learn what it really takes to set up and run your very own micro-gig business.
15+ Business Plan Books for Free! [PDF] by InfoBooks. Planning in business is of vital importance for the founding of any type of company. This is why we bring you this collection of business plan books in PDF format so you can start your adventure as it should be, with foresight and order. Business plans were born in the mid-20th century, but ...
Download the Toolkit Check out the resources used by successful entrepreneurs to help them get to the next level of their business. It includes: What are you selling? Product Funnel TemplatesHow much are you selling? Revenue Forecast TemplateWhat business should you start? 1000+ Business IdeasStrategic Marketing StrategiesStrategic Marketing Plan TemplateHow to sell. Sales talk track […]
Dropbox Co-Founder Seeks $225 Million in Claim Targeting Ex-First Republic Broker
January 9, 2018. Breakaway compensation plans are the oldest of the three common compensation plan types. They've been around since the 1970s. To this day, they're the most popular compensation plan among party plan companies. A breakaway compensation plan uses two primary bonuses and two defined sales force classifications: salespeople and ...
Reliance Jio is offering a tempting deal for its prepaid users: a free 365-day mobile recharge plan worth Rs. 3,599. However, there's a catch—you need to book a new AirFiber connection to avail ...
The Republic of Bashkortostan is traditionally also known in Russian as Bashkiria. It is the most populated republic out of all the Russian republics. Indigenous Bashkirs make up just under a third of the population of the republic and the Bashkir language shares official status with Russian. The republic is located on the foothills of the south Urals and shares a border with the Republics of ...
With the help of every one of my clients I've developed a 10-step methodology for building a profitable business. If you do the work you will succeed, guaranteed! Learn more about the 10-step process in my Amazon Best Selling book - Quit Your Day Job - 10 Steps to Financial Freedom.
The Bashkirs or Bashkurts (Bashkir: Башҡорттар, romanized: Başqorttar, IPA: [bɑʂ.qʊɾt.ˈtaɾ]; Russian: Башкиры, pronounced [bɐʂˈkʲirɨ]) are a Turkic ethnic group indigenous to Russia.They are concentrated in Bashkortostan, a republic of the Russian Federation and in the broader historical region of Badzhgard, which spans both sides of the Ural Mountains, where ...
Ufa is the capital of the Republic of Bashkortostan and before Ivan the Terrible ordered a fortress be built-in Bashkir lands in 1574 (which is considered the year of the foundation of the modern-day city of Ufa), the Bashkirs had their own settlement at this location. As the Bashkir capital, Ufa has several museums with exhibitions showcasing ...
Country of origin: Russia Location: Ufa, Republic of Bashkortostan (early); Muravlenko, Yamalo-Nenets Autonomous Okrug (later) Status: Active Formed in: