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Crafting an Effective Business Plan

With Cate Luzio

31 minutes

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While pitch decks have become more and more popular, the classic business plan still serves an important function for entrepreneurs—and intrapreneurs—who are building, growing, or scaling a business. In this recorded session from Yelp’s Black in Business Summit (August 25, 2021), Cate Luzio, founder and CEO of Luminary and host of the nationally recognized Business Plan Boot Camp, breaks down the top three essentials when crafting a powerful plan.

You’ll learn which information in your business plan will help you:

  • Achieve short and long term goals
  • Reduce risk
  • Build a path to success for your business

To read more, check out Cate’s guest blog post: 3 things to consider when crafting an effective business plan.

Cate Luzio
Cate Luzio Founder and CEO of Luminary

Founder and CEO of Luminary, Cate Luzio’s passion for empowering women has led her to develop a premier collaboration hub dedicated to women’s professional development and network expansion in New York City. Cate currently serves on the National Board for Girls Inc. and has over 20 years of leadership experience in financial services with prestigious companies, such as HSBC and J.P. Morgan. She has been recognized on the Most Powerful Women in Banking List by American Banker and Female Founders 100 by Inc. in 2019. She has also been featured in Financial Times, Forbes, Wall Street Journal, CNBC, Fast Company, Bloomberg, WWD, Robb Report, Women’s Health, and more.

Cate: I’m so excited to be here. I actually had the opportunity to be at the Yelp Women in Businesses Summit back in March, and they asked me back. And one of the things that I’m even more proud, less than about me participating in this, is actually having Luminary be a proud partner of the Black in Business Summit. Many of us that are small business owners, founders, entrepreneurs have seen such an unprecedented 18 months. And if you were a business owner before the pandemic, you had ups and downs. And if you’re a business owner during, you started a new business, you’re pivoting your business, wow. It has been a year. I am Cate Luzio. I’m the Founder and CEO of Luminary. We are a an inclusive membership growth and personal growth platform that is based here in New York City. But silver linings of the pandemic were that we actually had to go global. And when I say “had,” I really mean that. We needed to continue to be there for our community and our members when the pandemic struck last March. And in order to do that, we had to go digital.

And so, Luminary, which was and still is a physical space here in the New York City Area, providing programming and content and community to thousands of members, has dramatically gone global. We’re in more than 30 countries. And one of the things that I talk about over and over and have been since we launched this business in January of 2019, is the importance of having a business plan. I am a relatively new entrepreneur. As I mentioned, we launched our business in January of 2019. I spent more than 20 years in corporate America, the majority of that being in banking, writing business plans, building businesses, rebuilding businesses, closing businesses.

And when I decided that I wanted to do something different and launch my own thing, the first thing I did was write a business plan. Now, for all of the media and amazing opportunities out there for pitch decks, I still think that a business plan and having a business plan is so important. So we’re going to spend the next couple of 20 minutes or so talking about how to create an effective business plan and really the top three things that I think about every time I talk to a founder, entrepreneur, small business owner.

And remember, whether you have a business plan or not, and if I could see all of you, that’s the first question I would ask; by show of hands, how many of you have a business plan? How many of you are pivoting your business? How many of you are launching your business? Are you revising or updating your business plan in? It doesn’t matter. Because at the end of the day, we still need a plan.

So, when you think about a business plan, many people think of very long documents. Also, people say, “I don’t need to read this. I have this amazing idea, and I’m just going to do it.” When you think about what Precious just talked about and pitching yourself and pitching your business, if you don’t have a plan, it’s very hard to articulate whether you’re looking for capital, whether you’re looking for customers, whether you’re just trying to start. It’s very hard to articulate your business without a plan.

Crafting an effective business plan really helps you number one, and this is what we’re going to talk about today, take your vision and turn it into tangible action plan for success. Number two, really create an impactful for growth and sustainability. And when I think about sustainability, I think about profitability, and I think about being here for the long term as a business.


And number three, it’s all about your numbers. How do you determine your future financial needs without a plan? Starting with that idea, it all comes down to a couple of questions. So as you’re thinking about your business plan, even if you can just get a pitch deck together, what are some of the questions that you should be thinking or asking of yourself, even if you are pivoting your business, launching a new business, revising or updating your original idea or plan?

Number one, what’s the opportunity? What problem are you solving for? What’s the gap in the market that you, your product, or your service is going to fill for a customer, whether that’s B2C, that’s B2B, or it’s both. The solution: how will your business uniquely solve the problem identified? And what’s your objective with the business? Do you have a full-fledged plan around the business? Not just, “I’ve got a bunch of customers, and I know it’s coming in.” How is your plan going to help you succeed?

Three, market focus. This is a huge question. Who’s your market? Precious talked a little bit about it. And who are the customers you’re targeting? And that may evolve over time as your business grows. That may shrink as well, depending on the industry and the market that you’re in. Your competitive advantage; who are your competitors? And how will you differentiate and succeed against those competitors? So many business owners think, I have an amazing idea. I’m just going to do it. And that’s incredible. That’s the reason you’re the business owner. That’s the reason you have the courage, and you’re the risk taker in order to start your business. But you need a plan. You need to understand who’s out there.

And then, the money. Precious talked about getting money, going and talking to investors. Even before you’re going to talk to investors, how are you going to make money? If you get an investor, if you’re able to get capital from a lender, a friend and family, an angel, how do you plan on paying them back? You need to understand your future financial needs. What does that plan? Key milestones around revenue, around profits, around growth and around customers.

So, what’s the real need for having a business plan? This is it. This is your north star. It helps you plot your course and truly focus all of your efforts. When I talk to founders and entrepreneurs and business owners, particularly here at Luminary, I asked this every single time: do you have a business plan? What’s your plan? Where are your thoughts around your business? “Well, I kind of have it. It’s here. It’s there.” Do you have a roadmap to not only launch your business, pivot your business, grow your business; on how you operate? And how you look for directions in times of crisis? Think about this past 18 months. This has been a crisis for small business. Has that delivered opportunities? Has that delivered challenges? How have you pivoted? How have you adapted?

Making tough decisions. A business plan will help you be able to make those tough decisions and do it better and faster. It helps you lay out new opportunities, new revenue streams, new innovation, new customer ideas. And again, it allows you to pivot, generate those new ideas, adapt and pull levers in what’s working, but also what’s not. So, that north star is really the foundation that you need.

Are you serious about this business? A formal business plan, whether that’s a page or a hundred pages, is really necessary to show all interested parties, not only yourself. And you may be a solopreneur; you still need a plan. It shows your employees, it can show investors, it can show potential lenders, partners that you are committed to building this business. Creating this plan forces you to think through, ask yourself tough questions about the business, and select the strategies that really can propel you for growth.

Finally, why do you need a business plan? It helps you establish key milestones. This “north star,” as I call it, really helps you create both short-term and long-term goals and milestones that are critical to the success of the business. What are those key milestones? Launching the company, pivoting the company, raising money, the number of customers you need, generating revenue, hiring staff, expansion in new geographies, new products.

When can you break even? Are you profitable? And if you want to sell your company, when can you exit? These are the three core reasons why you need a business plan. Readiness. Everyone thinks I’ve got this amazing idea, and I am ready. Well, have you done your homework? Are you really ready? What does the market look like? What does your competition look like? And ultimately, who are your customers? So in order to do all this, you really have to number one, better understand your market, your customer, and your competition. Creating a business plan forces you, literally forces you, to analyze the competition and the landscape around you, your peers, your potential partners as well, the viability of the market you are targeting to serve, and the ultimate customer you’re looking to find.

What’s the opportunity? Back to that question I mentioned in the beginning. What’s the opportunity?What’s the gap you’re filling? What are your advantages as a business and a business owner, whether you’re delivering a product or service or both? What is your differentiator? Can you clearly define that on paper, and even more, in an elevator pitch, whether you’re talking to a customer, a potential partner, someone you’re trying to hire, an investor, a lender? This also really keeps you focused on innovation.

Reviewing your business plan, understanding your market, understanding your competition and your customer will allow you to continue to innovate. People like to say, “Luminary really pivoted during the pandemic.” I’m not a big fan of the word “pivot,” in that, we didn’t actually change direction. I love sports. I love basketball. I didn’t change the direction. I actually adapted to the landscape. I adapted to what was happening in the market, to the competition, and new customer needs. And it allowed me to adapt my business.

If I didn’t have the business plan, I wouldn’t have had the leverage to pull in order to see where I needed to go next. Now, I went from having a physical space and still do, but to having members in 30 countries and having a completely digital as well as physical experience for our members.

Is your business feasible? Really, how good is this opportunity? Creating a business plan really involves researching your target market. Again, what does that competitive landscape look like? Are competitors entering at a rate? Are they leaving? What’s changing in the industry? Is it becoming more saturated? Is it shrinking? Is it growing? When you think about 18 months ago, what did the industry or the market that you’re serving look like? What does it look like today? Creating the business plan really creates and serves as a feasibility study for your success.

Knowing trends, market size, industry views also helps define the role that your business really plays in what you’re trying to accomplish, your readiness and feasibility determined by your business plan. It’s instrumental in how you also position your brand in the market. Are you adapting? Are you pivoting? Are you launching new products? Have you scaled back? Have you scaled up? What are your differentiators? Figuring out your why: why does a customer buy from you? Why is your company the right company to actually provide or deliver this product or service? This will also allow you to create better pricing strategies, understand if you’re underpriced, and understand if you’re overpriced, benchmark where you are, your products and your services, and really help define your value proposition.

And finally, within this, “are you ready?” if you do one thing, do a SWOT. Now, I’m old school in that I came from the corporate world. And everything we do when you’re launching a new product or a new project, you do a SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.

This analysis really allows you to bring previously hidden assumptions to the front, around key strengths, your key opportunities, your weaknesses and your threats. Much bigger than probably you would’ve ever assumed. By writing these down and assessing them, you can test and analyze validity. You can also quickly see a list of pros and cons for the business. Are you ready? Is your business ready? What does the market look like? Where are you fitting in the industry? This is also a good exercise to go through on an annual basis, even more so when you’re in the middle of a pandemic. It enables you, really, to maximize opportunities and minimize threats, as you go for forward, back to that profitability and sustainability and the goal of your business.

Now, many of you may be building your business to sell, create true generational wealth for yourself, your family, and others. That’s okay too. Many of you may be looking for capital, may be looking to get money from a bank. A business plan will help set you up for success. So, you need to know your numbers. Knowing your numbers, whether you’re starting, you’re growing, you’re scaling your business, I cannot tell you how important forecasting and financial projections are along with expense management. These will help address the assumptions within the business, and your P and L, your profit and loss.

Now, along with the question I ask most of our founders is, “Do you have a business plan?” The second question I ask is, “Do you have financial projections?” How do you really know if you’re going to be financially successful with your business, if you don’t know your numbers? Couple of questions: how does your business make money? What money is coming in? What money is going out?

Lots of people will say, “Well, I generate X amount of revenue.” That’s fantastic. Great, you’re generating revenue. But what’s going out every month? What are the costs? What are your expenses? Do you have staff? Do you have a physical space? What are the costs that are going out? Because at the end of the day, it’s great to generate revenue, but you also need to manage your expenses and generate profit. When do you become break even? When do you become profitable? When are you able to hire, if that’s in your plan? What startup capital is required, if you’re just launching your business? What’s your run rate, i.e. When are you going to run out of money and how long do you have before you need new capital, new revenue? How many customers do you need each month, each year in order to be sustainable? How are you looking at retention and attrition of those customers?

How do you build a pipeline? Do you really need outside capital and how much? How do you deploy capital that you get, and where does that go? How are you using proceeds of a fundraise? How are you using working capital to your advantage to allow you to become profitable, to break even, to become more sustainable? And if you’re looking to raise, can you attract investors? It’s more than just a pitch deck. It’s more than just the pitch. It’s the plan.

And certainly, if you’re attracting investor and you’re attracting capital and your ultimate goal is to exit, when can that happen and how? You need to know your numbers. It’s also a great way to look at the risk versus the reward. You’re already a risk-taker. You’ve started a business, or you’re starting a business. That’s the ultimate risk. You’re betting on yourself. You’re betting on your business. But how do you answer critical questions for yourself and your investors and potential lenders, as well as your staff, if you have staff or you’re planning on hiring? How do you help reduce the and determine the greater reward?

If you don’t know your numbers, if you don’t have a plan, it is very hard. Your financials really help you to minimize opportunity costs, assess ongoing opportunities and the challenges ahead, and how you adapt or pivot to them. They outline a path to making money or paying back a lender or investor. And/or, again, eventually, if you are going to exit, this really demonstrates a solid plan and that you are the right person, not only to lead this business; this is a business destined for success. And finally, compare and contrast. A business plan really does provide concrete evidence on whether you have and can achieve strategic, financial and operational goals. And, oh, by the way, why you have, or have not.

Are you hitting milestones? Are you meeting those financial goals that you set? Are you thriving versus just surviving? This past year, we’ve seen a lot of businesses go out of business, unfortunately. But we’ve also seen a lot of new businesses as a result of the pandemic. Innovation, particularly for women and many people of color, after losing their job, exiting the workforce. And we know that women and women of color were predominantly impacted this past year. Those in the services industry, retail, hospitality, education; many will start new businesses. Are you ready? Are you prepared? What more do you need? How do you know when you can reinvest, and how do you know if you’ve got what it takes?

I know that was a lot of information in just a few minutes. Before I went on and on, I wanted to see if there were any questions. Ah, okay. We do have a question. “Is there a source for the most viable business plan template today?” [Tuana 00:19:09], thanks for asking. You can Google a million different things and just Google “business plan.” I will tell you what I think is the most important to have in a business plan, as far as the core elements.

Number one, you need an executive summary. You need to tell people who you are, why you exist, how you, your business is going to be successful. What’s your elevator pitch? What’s your story? Start with an executive summary. The next is really the company overview. Who is the company? What market are you going to serve? Why does your business exist? What’s the gap you’re filling? Really talk about your mission. Your mission could be, “I just want to make money.” Your mission could be, “I want to change the world.” Your mission could be both. So, really have all of that outlaid in a company overview.

A business description. Who are your customers? What’s the market? How are you going to price? What are your services? What are your offerings? Market research and analysis. I talked about that in the second slide. It is so important, around readiness for your business, to do that market research and analysis. That includes competition, customer, and overall the industry.

Operating plan. How do you plan to operate the business? How are you going to your business, whether you’re a solopreneur, whether you’re a side hustler, whether you’ve got a team, a small team, a large team, a distributed team, how are you going to operate that business? How are you going to stay through times of difficulty, but also opportunity? How are you going to grow? How are you going to reinvest? Your operating plan is critical and not only for showing an investor or potential lender, but for you and your business.

Marketing and sales. We all need that in order to create awareness around our products and services, around our business, around ourselves, as founders and business owners. What is your marketing and sales plan? And finally, it goes back to my last slide: a financial plan.

If you do nothing out of this conference or out of this session, please do your financials, do a SWOT analysis and understand the viability and feasibility of your business. A great place, actually, as a follow-up to this session, you will all be receiving an opportunity to come to a business plan bootcamp at Luminary. But we will also, and I’m calling an audible here, Ally and the team at Yelp; in that follow-up, we will also include our own business plan template that you will be able to use. It will also include a SWOT analysis that you can leverage as well as financial projections document. But honestly, if you Google business plan template,” there are tons. And what I would just, Tuana, and I think, [Tudisia 00:22:07], you also said it too, in your question around “where’s the best place to get it?” Some of the things that are going to be in my business plan are not necessarily going to be relevant to yours.

So, you really have to understand each of those sections to understand what’s relevant, what’s not. Operating plan, great example. Maybe you’re not ever going to have staff. Maybe you’re always going to be a solopreneur. That’s okay, but you need a plan. You need to understand how you are going to continue to operate on your own forever. This also may say, “I can’t do it all myself. I’ve got to start hiring. When am I making enough money in order to do that?” Maybe that’s not a full-time. Maybe that’s part-time, maybe that’s a contractor. But hopefully that’s helpful. We’ll get you some information in the follow-up email. But again, the seven components that I mentioned are the core foundational elements for me when I write a business plan. And it’s allowed us to adapt and get through what is the hardest time, I think, in history, for small businesses, outside of the Depression.

[Larice 00:23:12]: “I own a printing business. I do not have a brick and mortar. Since everything’s online, would it be more wise to build an amazing website and make that my dream brick and mortar? How much is too much to spend on a website?” Larice, amazing question. I can’t answer those questions because it’s not my business. But what I can tell you is if you had a business plan, you would be able to know how much you actually can spend on a website. Not how much is too much to spend on a website. How much money do you actually have? What’s your budget to spend on an incredible website?

I think what we’ve learned over the past year is not everything needs to be brick and mortar. So, if you want to go all in on building an incredible website with all the bells and whistles, fantastic. But you need to know your numbers in order to actually create a budget, to be able to go, whether that’s a marketing agency, another small business and saying, “I want to create X. This is what my website needs to look like. This is my budget. Hopefully that helps.


[Tamiko 00:31:16]: “What if your industry is not well- researched. Boat rental business, water sport rental…” Listen, I would say every business has an industry; there is a market for it. You must ask. Go into your network, go deep, Google as much as you can around that industry. The other thing is, you may have a white space. You may be creating something completely new. Boat rental, I would say Boatsetter is one that I know of. So just from the top of my head, I would look at that. It’s boat rental. It’s on-demand boats around the US. But honestly, it’s a lot about due diligence and digging information and finding out what’s out there. So hopefully that helped. And good luck.

“Are pitch deck and a one-page business plan the same thing?” No. A pitch deck is really a high-level view of your business. It’s like an executive summary of who you are. You may have a little bit of financials. You may have a little bit about the business. You may have a little bit about a go-forward. But that is really to share externally whether you’re talking to investors, potential investors, lenders, et cetera, potential partners. That’s really, in my view, more of an external-facing deck. A business plan, which can also be external, because I would recommend if you are ever going to talk to a lender, a bank, anywhere to get capital, you show them and demonstrate you have a full business plan and numbers. A business plan is really that internal north star. How do you build your business? How do you go forward? How do you make money? What are those levers that you can pull in order to be successful? I would also say it also means you may decide not to move forward with the business. You may change the course of your business.

It’s so important as a leader that you prepared to take swift and decisive actions. You are the owner, the buck really stops here. And Iris, you put a note in there that I’m going to read. Atwana Harris, I do not know what state you live in. Score. You’re absolutely right; score is a great source for resources. Also, I would recommend, depending on what state you live in, go to your Small Business Services of any of the cities that you’re in. I’m in New York City. The Small Business Services has tons of free resources and information for women in particular, as well as black entrepreneurs. They have, which is women entrepreneurs and, which is for black entrepreneurs. Tons of free resources and information. And the last thing, because I know that I have to wrap up in a few minutes, is that we are all in this together.

And so, we, Luminary, want to make sure all of our founders, small business owners, entrepreneurs are successful. And so, we ask you to text us at 66866 because we want to take this outside of just the Yelp Summit. We want to give you an opportunity not only to take or attend a free program of your choice. And we do, by the way, about 10 different courses and workshops every single week. Precious, who you heard earlier, leads some of those. Or if you’re in the New York area, a free day pass. We also have space partners around the country that we can introduce you to, if you’re looking for a space to work in.

I just want to say that this is one of the most important… Oh, sorry. I’ve got another question. Sorry. I’m kind of going back and forth. “If you’re not a numbers person, what’s the best way to educate yourself and improve your understanding of your financials?” Monica, great question. Number one, if you Google “business plan template,” you will likely see financial projections. Google “financial projections,” “projected P and L,” profit and loss. A lot of free resources again, whether that’s SCORE within small businesses, they will have a plug-and-play template.


If I can give you one bit of advice, just start with expenses. List them out in an Excel sheet or a Google sheet. Every single expense you have on a monthly basis on a quarterly basis on an annual basis. And if you’re starting up, what are those expenses you need, those one-time costs, in order to start up? It’s a great foundation to understand what you’re spending to then identify actually how much revenue you need to be bringing in, in order to cover those expenses, nevermind actually make money. And big thing: pay yourself as the founder.

So, that is a fantastic question. And if you want more education on that, again, we’re going to be sending a follow-up with Excel sheets that you could plug and play, drop in your numbers. Again, some of that’s going to be applicable, some of that won’t, to your business. But take it with a grain of salt. My business is going to be different than many of your businesses, and your businesses are likely not going to be the same as your friend next door. But the most important part of this is to actually have a plan.

The process of thinking about and crafting your business plan really provides clarity. And again, I use this “north star” for your business. But it also demonstrates a solid understanding and vision for your operating model, not just for you and potentially investors or lenders, if you’re looking for capital, but it really helps prioritize what’s most important. The critical tasks you need to focus on, on a day, on month, on an annual basis. And a bigger timeline for you. Timelines are so critical. How you pivot. The second thing that I would say: be prepared to change plans, sometimes within days, sometimes within months. If we learned anything this past year, is how to adapt quickly. Be open to pivoting, be open to adapting and changing. Not necessarily your entire business model, but even small steps.

The right pivot or the right adaptation, like Luminary, can turn out to be a silver lining. And remember the root of why you started your business in the first place. And never give up. Never give up. You are the one that took the risk to start your business. You found a gap or saw a gap or an opportunity in the market, and you are building the business to feel that. So always, always bet on yourself.

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