If you’re just starting a business, you need a business plan. In many ways, your business plan is your roadmap—it not only guides you and other key stakeholders as you grow your business, but it also shows investors, lenders, or potential partners where your business is headed. Therefore, a successful business requires a well-thought-out business plan.
Although the prospect of writing a business plan may seem intimidating, it doesn’t have to be. As long as you take some time, include essential information, and follow a handful of simple steps, you’ll be on your way to creating the perfect plan. To help you through the process, we’ve developed this guide on how to write a business plan, step by step. We’ll take you through each step and section so that you’ll be able to get yours completed in no time.
How to Write a Business Plan: 8 Steps to Follow
Regardless of the kind of business you’re starting, a business plan is used as an organization tool, a guide for you to follow, and a document that tells external parties exactly what your business is and what it does.
This being said, although this definition gives you an overall answer to the question—”What is a business plan?”—it doesn’t provide much information on how to create one. When it comes down to it, you might start your business plan in any number of ways, but generally, this document is broken down into eight core sections.
Therefore, as you’re learning how to write a business plan, the best way to approach these sections—especially if you’ve never created a business plan before—is to take each section as a step to walk through one at a time.
Max Babych, CEO at SpdLoad, agrees with this approach saying:
“A business plan can simply be considered as answers to a number of questions. Try to answer only a few questions at a time. Preparing a small part of a business plan at a time is easier than locking yourself in your office for several weeks to complete the job immediately and completely.”
Then, once you’ve completed each section, your end result will be a comprehensive analysis of your company, as it is now and as you hope it will be in the future.
Step 1: Create your executive summary.
With all of this in mind, the first step you’ll want to take when learning how to write a business plan is to create your executive summary. This executive summary will be the first chapter in your business plan—it will explain what your business does, where your business currently stands, where you want to take your business in three to five years, and why you’ll be successful.
Although this seems like a significant amount of information, the executive summary doesn’t need to be more than one or two pages in length. However, just because this is a short section of your plan doesn’t mean it’s unimportant. In fact, it might be the most important part of your business plan. Some investors might only ask for your executive summary when deciding whether to work with your business—so you’ll want to ensure that it can stand on its own.
Keep in mind that any information that doesn’t answer the “what, where, and why” statements we listed above shouldn’t be included in your executive summary. You can make this step of your business plan simpler by sticking to the following six pieces of information, as recommended by the SBA:
Mission statement: In no more than a paragraph, your mission statement should explain what your business is and the overarching goals you have.
General company information: State when your business was formed, the name of any founders and their roles, the number of employees, and any locations.
Highlights: Next, include examples (with graphs and charts) of any growth you’ve seen since starting the business. This could be financial market highlights or key milestones of the business. You should think of this part of your executive summary as evidence supporting why you’ll be successful. If you’re a startup, you might not have any numbers to show here. If that’s the case, give information on your experiences and highlights from your past endeavors.
Products and services: Briefly describe what you actually sell and who you sell it to. If you don’t have a product just yet, describe your plans for your product offering.
Financial information: If you’re looking for business financing, you’ll want to include your funding goals at the end of your executive summary. Be sure to include any information about banks or lenders you’ve worked with so far.
Future plans: Summarize where you’re planning on taking your business in the future.
Remember—although it may seem extensive, this is first and foremost a summary, so you’ll want to keep it short and sweet. At this point, you still have seven steps left to complete, so you’ll have plenty of time to get into the details later. With this first step, you’re showing readers what they’re getting into. However, it’s also important to remember that as the first step—and a brief one—every word of your executive summary counts. If you haven’t put enough thought into your business plan, it will show.
If you’re struggling with writing your executive summary right off the bat, try working on it after you’re done writing your business plan from start to finish—that way, you’ll have a solid grasp of the details and will be better equipped to summarize them.
The second step you’ll want to take when writing a business plan is to add your company overview. Although this step may sound similar to what you just wrote in the executive summary, the company overview is a top-level look into the structure of your business and what you do.
When writing your company overview, therefore, you can think about breaking it down like this:
What does your business do: Start your company overview section with a few sentences describing what your business does. You can think of this part as your elevator pitch in writing. The first piece of your company overview is intended to give readers and investors a general sense of your business.
Industry and marketplace of your business: Next, you’ll want to explain the nature of the industry and marketplace that your business services. Where do you fit in? What is the need that your business is specifically serving, and how do you meet that need? Again, your explanation of your marketplace offering should be brief and concise.
The legal structure of your business: Once you’ve given your elevator pitch and explained your value proposition, you’ll want to describe the legal structure of your business. Are you an S-Corp or C-Corp, or LLC? Be sure to explain what kind of business entity your company is and provide an overview of your ownership structure as well.
Remember, just like the executive summary, you’ll want to keep your company overview short—again, this isn’t the section to dive deep into the details.
Essentially, a business plan’s company overview gives a quick—but catchy—pitch about what you do, who you serve, and why you’ll be able to serve them. Plus, this section also includes a brief look into the existing legal and ownership structure of your business so potential investors know what they’re getting into.
Your next step is to perform an in-depth analysis of your industry, market, and competitors. Whereas the first two sections were high-level overviews, this section is where you’ll start to get into the details.
The purpose of the market analysis is to allow investors to come away feeling confident that you, the business owner, have a solid understanding of the dynamics of your industry, market, and competitors.
To display this understanding, your market analysis should include the following sections:
Industry description: Give the reader a look into your industry. Describe how big it is, how it has grown in the past, how industry leaders predict it will grow in the future, and other important trends and characteristics. Then, list out the important players in your industry.
Target market overview: You’ve looked at your industry as a whole, now you’ll want to discuss your target market, or target audience.
Target market characteristics: Who are the customers in your target market, and what are their needs? Who is currently trying to serve those needs? Where is your target market located? Is this a niche market? What’s the key demographic you’re serving? These are the questions you should be answering as you give in-depth information on your target market.
Target market size and growth: You should also give readers a look into how big your target market is. Try to give as much data as possible into how your target market makes purchases in the overall industry—how many, how often, and at what time of the year. Once you’ve looked into the current state of your target market, give a sense of the projected growth of your market. You can reference the SBA’s guide for more information on how to conduct market research to get these numbers.
Your market share potential: Now that you know what your target market looks like without you, what will it look like with you? How much market share do you expect to gain in your targeted geographic area?
Market pricing: By conducting this market research, you can give the best estimate of how you should be pricing your products, how you should distribute your product, and how you can get ahead with promotional strategies.
Barriers: Be sure to include any barriers to market entry you might come across. This might be regulation, changing technology, high investment outlays, or lack of personnel in the area.
Competitor research: Now that you’ve looked into your target market as a whole, you can narrow in on your top competitors. Look at their market share, strengths and weaknesses, any barriers they present, partnerships, and so on.
Due to the data, research, and amount of information involved in this section, when you’re learning how to write a business plan, this step may very well take the longest. However, as such a crucial piece to your overall business plan, you’ll want to be sure it contains all the necessary details, is well-researched, and will show readers that you’re knowledgable about your specific market, the market demand, and your business’s role in that market.
When we talked to business owner Athan Slotkin, about his top tips on how to write a business plan, he highlighted the importance of this section:
“You need to clearly spell out the logic for why you are attacking a market opportunity in a certain way—part of that is derived from customers’ needs—and the other part from the fact that your competitors aren’t meeting these needs. Help your audience see what you see.”
Use our comprehensive market analysis guide for more information on writing this part of your business plan.
Step 4: Define your business’s organization.
What’s the next step in writing a business plan? Defining your business’s organization and management structure.
This section explains who does what in your business, what everyone’s background is, and what their past experiences bring to the team.
Here’s what you need to break down:
Organizational structure: Before you dive into the details of each stakeholder, explain where they fit into the whole picture. The start of this section should include an organizational chart showing how your business is structured. This will illustrate that you know who is managing what aspect of your business.
Ownership structure: You’ve mentioned this before in your company overview, but here, you should go into a little more depth on how your company is legally structured. Explain who owns what, and how much they own.
Background of owners and board of directors: Next, explain the background of your team, managers, partners, and board of directors. These backgrounds will prove to potential investors that you’ve surrounded yourself with individuals who can and will make your business a success.
Hiring need: If your team isn’t that big right now, you’ll probably need to expand in the future. List out any key hires you’ll need to make in order to achieve your goals.
Step 5: Describe your products and services.
After you’ve described your business’s organizational structure, it’s time to dive into the product or service your business provides. With this step, your goal is to lay out your plans for positioning your product.
When writing a business plan, you can start off this part by describing your service or product and who it’s intended for. What need does it specifically fulfill?
To break this down further, here’s exactly what this section should contain:
A description of your product or service: Include the details of your product here, and highlight what makes your product or service stand out. Be sure to speak toward how your product serves the needs of your customers and how it’s different than your competitors. This is all about framing the problem as well as the solution your business is offering.
Current status of products: Explain where your offering currently stands. Is it just in the idea stage or do you have a final product ready to go to market? Give a realistic and honest picture of how developed your core product or service is.
Product development research and goals: If your product is still in the ideation or creation phase, describe how you’ll bring it to a finalized product. What research and development activities need to be done before you get to market? Also, if you have any plans for future products you’d like to research and develop, note them here.
Intellectual property: This mostly applies to technology or scientific companies, but if you have intellectual property that is proprietary to your business and crucial for your success, you should explain that in your product development section. Note if you have patents or are in the patent application process.
Sourcing and fulfillment: Do you rely on other vendors to provide your product or service? If so, be sure to make that clear when you’re writing a business plan. Include information about where you’re sourcing your products, where any inventory or materials are coming from, how you receive them, and how often you need fulfillment.
Ultimately, this is the section of your business plan reserved for letting the core of your business—your product or service—shine.
Step 6: Explain your marketing and sales plan.
Now that you’ve given all the crucial details of your core product offering, the next step in learning how to write a business plan is explaining how you’ll sell and market your product or service.
Let’s start with the marketing side. How will you create customers and get them interested in your business?
In general, here’s what the marketing part of this section might look like:
Positioning: The first part of your marketing plan covers how you’re positioning your business and products. The way you position your brand determines how customers find and interact with you. Are you a free service? Or the service that can guarantee quality? This is what makes you stand out against your competitors in a branding sense.
Promotion: After you’ve explained how you’ll uniquely position yourself, now explain where you’ll get the word out and how you’ll reach your customers. This involves any plans you have for packaging your product, advertising the product (online or in traditional media sources), dealing with public relations, or engaging in content marketing practices.
Once you have a marketing framework explained, now dive into your sales plan:
Sales force: Describe who will be selling your product. Do you need a sales force? If so, how big does your sales team need to be? Who will train them? Now’s the time for you to put on the hat of a chief sales officer.
Selling strategy: Give an overview of how you will sell your product or service. Will your team be cold-calling potential customers? Or attend sales meetings in person? This is how you’ll start and close the deal. Be sure to describe what the sales funnel looks like for your business.
Although you might not know exactly how your sales and marketing will play out just yet, or which channels will be most successful for you, you’ll nevertheless want to give a clear and concise overview of how you plan on selling your product.
As Phil Strazzulla, founder of SelectSoftware, told us with regard to his top tip for how to write a business plan:
“The most important part of any business plan is listing the key hypotheses that need to be proven for the new venture to work, as well as the tests that will be run to prove or disprove these hypotheses.”
Therefore, as your business progresses and can test your sales and marketing hypothesis and as you learn more, you can come back to this section and change or adjust information as necessary.
Step 7: Detail your financial plan and projections.
Although this section comes at the end of your business plan, it can be the most important part of the entire document. With this step, therefore, you’ll detail your financial plan and projections—giving a look into the current state of your finances and mapping out where you’d like to be financially in the future.
If you’ve been in business for a little while now, you’ll use financial data from past performance in this section. If you have previous data to show, you should include the following financial statements:
Even if you don’t have any previous financial data from your company, you need to include financial projections in this section. Financial projections are either supported by your past data, or they’re determined by research and analysis on the industry and your top competitors.
This being said, when you’re forecasting your business’s financials, you’ll want to include these essential documents:
Typically, a thorough business plan has financial projections for the first 12 months of business, but also takes a longer outlook and illustrates a plan for the next three to five years. To get into all of the details involved with creating a financial projection, you might decide to consult a business accountant or other financial advisor.
The last part of your financial plan should include any funding needs your business has or will have in the future.
The purpose and impact of the funds (working capital, equipment purchases, franchising fees, acquiring a business, etc.)
With this piece of your financial plan, a potential investor reading your business plan will be able to determine exactly how any financial contributions they make will impact the business. And if you specifically need a business plan for funding purposes, this guide can help.
Finally, this is also the section where you’ll want to include graphs and charts to visually illustrate your business’s current financial situation and plans for the future.
Step 8: Add an appendix.
When you look at all of the steps involved in writing a business plan, this final step may seem inconsequential—however, that’s not the case. Although the appendix will be at the very end of your business plan, it will also hold all of the supporting information you didn’t include thus far in your document.
Specifically, if you have any additional data points, charts, footnotes, or further explanations that are essential to creating a complete plan, you’ll include those in the appendix. You might also add any contracts, legal documents, business licenses or permits, and product pictures in this section.
Moreover, the appendix is also a great place to insert your own resume and resumes of any key members of your management team—that way your readers can refer to the appendix if they need more—but aren’t distracted by long text explanations or confusing numbers while parsing through the plan.
As small business expert and consultant Sophia Sunwoo explained to us with regard to how to write a business plan:
“Remember that you are telling a story of your unique vision. There’s nothing more disruptive to a great story than a bunch of tables, graphs, historical context, and images that snap the reader out of the world your story is creating. Any additional information that is ‘nice to have’ but not completely aligned with the core purpose of the business plan should be pushed to the Appendix, where the reader can choose to digest this additional information at will.”
Logistically, therefore, the appendix should begin with a table of contents that breaks down the sections of your business plan, followed by the additional information that corresponds to each section.
Business Plan Template and Examples
As we mentioned early on, although this is one of the most common ways to write a business plan, it’s not the only way. Therefore, as you’re learning how to write a business plan for yourself, you might find it helpful to consult different templates and examples.
If you’re searching for business plan templates, you’ll find various options online, including fillable PDFs, Word documents, and software platforms. For a great place to start, you can download our business plan template here.
For more business plan examples, you might refer to any of these resources:
You might also perform some research to see if you can find a business plan example that corresponds to your unique industry. To this point, if you’re looking for the best way to streamline your business plan processes, you might opt to invest in business plan software.
With most business plan software solutions, you’ll have access to a variety of pre-designed templates that you can edit and customize for your business. Some business plan software systems will include industry-specific examples, as well as educational materials to walk you through the process of starting and creating your own plan.
There you have it—as we’ve broken down how to write a business plan, step-by-step, you now have the tools you need to create a comprehensive business plan.
The best place to start is to thoroughly research your industry, competitors, and financials so that you’ll have the bulk of information you’ll need to reference and include in your business plan available as you sit down to write it.
Once you get to writing, remember to be concise and efficient, keep your audience in mind, and if you’re struggling, refer to a business plan template or example that we mentioned above.
Our final tip? Dive right in. This crucial business document won’t write itself, so it’s time to get going—and once you’re done, this will be one more thing you can check of your starting a business checklist.
When you’re starting a business, you generally have two options for startup financing. First, you can explore your various debt-based options, such as small business loans, lines of credit, etc. Second, you can look into equity financing—which is completely different.
What is equity in finance? How does it work? Is it right the solution for your businessfunding needs?
In our comprehensive guide to equity financing, we’ll walk you through everything you need to know to answer those questions—and more.
What Is Equity Financing?
Equity financing is a method of raising funds in which business owners sell shares (i.e. equity) of their company to investors in exchange for capital. In this way, equity financing is completely distinct from debt financing, in which you borrow money from a lender that’s paid back over time, with interest, while maintaining complete ownership of your business.
Equity financing is a particularly common funding method among startups, as well as businesses looking to fund growth or expansion.
How Does Equity Financing Work?
With this equity financing definition in mind, let’s explain a little more about how this type of business financing works.
Once again, equity financing involves securing capitalby selling a certain number of shares in your business.
Each share sold (usually in the form of common stock) represents a single unit of ownership of the company. For instance, if the company issues 2,000 shares of common stock and you, the business owner, have 1,000 shares, you own 50% of the business.
Any investors offering capital for your startup will do so in exchange for units of ownership in your business—meaning the rest of the 50% is distributed among your investors. The amount of ownership, or “equity,” the investors give your business usually correlates with how much capital they invested in your business.
When an investor invests in your business (and gets issued a portion of the business’s shares), they become a shareholder of the business.
Benefits for Investors
As a business owner, working with an investor gives you the capital you need to start or grow your company. You might be wondering, however, what are the advantages of equity financing for investors? In short, investors who participate in global equity finance deals gain:
Dividends: By investing in your business, the investor gets a percentage of ownership—or equity—in the company via their ownership of the business’s shares. As a shareholder of the business, the investor will benefit from dividends from those shares. They may also reap a profit from the sale of those shares down the road. Since investing in any small business is risky, equity financiers want a high rate of return on their investment.
Voting rights: They also get voting rights in your business. When you hold board meetings to make important decisions for your business, those shareholders (or their representatives) will be there and have a voice in the decisions. Not every shareholder gets the same voting rights in the business—the level of voting rights varies based on the kind of equity shares the investor is issued. Here are the different types of stock you might issue to investors:
Common stock: If an investor has common stock, they have a claim on the business’s earnings (or dividends) and have voting rights. A company can also issue different classes of common stock to shareholders. For instance, shareholders with A-class shares might have voting rights and dividends, but those with B-class shares have no voting rights and no dividend.
Preferred stock: Preferred shares, on the other hand, have dividends but no voting rights. Preferred shareholders have a higher claim on the business’s assets than regular shareholders with common stock. This means that, in the event of liquidation, preferred shareholders are paid off before other shareholders
When it comes down to it, you’re able to customize the kind of stock you issue based on your investors.
Sources of Equity Financing
If you’re considering equity financing as a source of funding for your business, it’s important to understand the different types of equity financing. Generally, the different types of equity financing are distinguished based on the source—in other words, where the financing comes from.
Overall, the external sources of equity financing can be broken down into three categories:
Angel investors are wealthy individuals who swoop in to fund early-stage, promising businesses. These individuals invest their personal funds in businesses in exchange for equity in those companies. You might turn to family, friends, entrepreneurs, or retired venture capitalists to find angel investors.
In addition, angel investors (sometimes called private investors, seed investors, or business angels) usually focus on helping a company takes its first steps. They can disburse capital all at once, or they can distribute funds little by little as your business grows.
Essentially, an angel investor is a wealthy individual (or a group of them) who believe in you and your idea. They’re willing to put time, effort, and money behind you. They’re also betting that they’ll make outsized returns on their investment in your startup.
This being said, although financial incentives can be a motivating factor for angel investors, some also fund businesses to take part in another form of entrepreneurship (after having success with their own businesses) or for the opportunity to mentor a new business owner.
Venture Capital Firms
Next, venture capital firms are another common source of equity financing.
Venture capital firms are similar to angel investors, just multiplied. Instead of one angel investor working with your business, you’ll have an entire company dedicated to swapping equity for capital.
Overall, venture capital firms typically invest the firm’s funds into high-potential, early-stage businesses—and typically, venture capital is a more competitive form of small business funding.
As a startup owner trying to raise capital from a venture capital firm, you’ll usually decide how much money you’re looking for and how much equity you’re okay with giving away, and then you’ll shop around. Venture capital is then usually distributed in “rounds”—Series A, Series B, or Series C. The series correlate with the growth of your company. You move from a seed round, through Series A, B, and C, to finally an IPO in some cases.
Each round you raise of venture capital is a new exchange of equity in exchange for the VC firm’s funding.
On the whole, when you work with an angel investor, it’s very likely you found the investor in a pre-existing entrepreneurial network, through a close colleague or friend, or through a general angel investing network. To this point, whereas there’s almost an unlimited number of angel investors you might work with, your venture capital firm options are limited to about 200 venture capital firms that are actually fundraising at any given time.
Finally, crowdfunding is a more creative form of equity financing.
With crowdfunding, you pitch your business idea on crowdfunding platforms like Kickstarter or IndieGoGo. Visitors on the site then invest small amounts of money into your business idea to help you reach your funding goal. In exchange, you might give those “investors” early access to your product, discounts, or simply a personalized thank you note.
In a way, the people who invest amounts in your business are like angel investors—just at a much, much smaller scale. Whereas an angel investor could invest up to $500,000 or more in your business, a user on a crowdfunding site might pitch in $25.
Therefore, crowdfunding is often used to reach smaller funding goals, or in conjunction with other types of financing.
Equity Financing: Pros and Cons
Now that you have an understanding of how equity financing works, you might be wondering: How do I know if this type of financing is right for my business?
What are the advantages of equity financing? The disadvantages?
Here are the pros and cons you’ll want to keep in mind as you evaluate whether equity financing can meet your funding needs.
Pros of Equity Financing
No “repayment” necessary: Compared to debt financing, in which you repay the lender you work with (plus interest) on a daily, weekly, or monthly schedule, equipment financing doesn’t come with any repayment stipulation. Because you’ve offered equity in your business, the equity investor is repaid by the prospect of gaining future profits the business brings in. Repaying financing isn’t necessarily a bad thing. The lack of repayment requirement, however, may benefit startup owners who are trying to hold onto capital in the beginning.
You’ll receive valuable business advice: It’s very likely that your angel investor or venture capital firm has either started their own businesses or have invested in a few successful ventures before. Therefore, by opting for equity financing, you’ll be able to receive advice, mentorship, connections, and more from your investors to help you as you start and grow your business. In addition, as an equity shareholder in your business, your investors might have voting power in your business. This means that they can impart their wisdom during the tough decisions to help guide you in the right direction.
Access to large amounts of funding: One advantage of going the equity-financing route is that investors typically invest large amounts of money in businesses they work with. Again, angel investors typically invest less than venture capital firms—but it’s still quite a large amount of money for startup funding. This can be a major benefit for businesses that need to hire different teams and invest in their product to be successful.
Cons of Equity Financing
You’ll lose a portion of your ownership: One of the biggest disadvantages of equity financing is the prospect of losing total ownership of your business. Every time you bring on a new angel investor or distribute shares to a venture capital firm, the ownership of your business gets more and more diluted. This means that any future profits of your business aren’t totally yours anymore.
Investors will have some control of your business: Similarly, you might find that you and your equity financing partner don’t see eye-to-eye when it comes to the direction of your business. By giving investors decision-making power, you run the risk of losing control of your business. For this reason, it’s important to evaluate a potential investor—in terms of their past business experience, management style, etc.—before agreeing to enter into an equity finance relationship with them.
Difficult to obtain for most small businesses: Unfortunately, because angel investors and venture capitalists are investing so much capital, they’ll only want to work with the highest-potential startups. And with the high failure rate of small businesses (50% of all small businesses fail in their first five years of business), investing in a small business might not be the safest bet for investors. In general, angel investors and venture capital firms are more likely to invest in high-growth businesses (like technology-based businesses) than they are in “Main Street” small businesses.
The Bottom Line
At the end of the day, although equity financing can be a smart move for startup or growth financing, it won’t be right for every business.
Therefore, before you decide to pursue this funding route, you’ll want to thoroughly compare debt vs. equity financing in order to determine what will be a better fit for your business.
If you do determine that equity financing is best for you, you’ll want to ensure that you understand exactly the agreement you’re making before working with any investor. You’ll want to consider the length of the relationship, the amount of equity you’re giving away, the types of shares you’re giving, and what voting rights the investor would have.
Ultimately, because equity financing can involve complex negotiations, you’ll likely want to work with a business attorney to help you through the process.
But as a small business owner, how can your business get on the results page of your customers’ Yelp searches? In this guide, we’ll break down everything you need to know to learn how to use Yelp for business owners, including steps to get started, costs, tips for success, and more.
In short, Yelp for business gives you the opportunity to create or claim a Yelp profile for your business. Then, when potential customers are searching for a store or service like yours in your area, your business’s page will appear among the search results.
Yelp for business owners gives you, a business owner, access to both free and paid tools to connect your business to consumers using the Yelp app. Yelp has several tools to allow you to customize your business page, either online or using the Yelp for business app on your mobile device.
Some of these are free while others will cost you, but you can use a combination of these tools to make sure your business is getting the attention it needs while staying within your business budget.
How to Use Yelp for Business Owners: 8 Steps to Get Started
For local small businesses and brick-and-mortar stores, utilizing Yelp for business owners should be a necessity. Customers in your area are looking for small businesses like yours, so your business should be showing up in their Yelp search results.
But it’s not like you can just sign up for Yelp for business owners and expect immediate results. You have to put some effort into getting the most out of your Yelp business page before you’ll notice an influx of customers or brand awareness. On top of that, you’ll need to decide how active you’ll be on Yelp, and how much you’ll want to pay to use their features to access new customers.
These steps will help you learn how to use Yelp for business owners.
Step 1: Add your business.
This is the most basic (but crucial) step toward winning the Yelp game—add your business to Yelp.
If you want to get found on Yelp for business owners, then you need to actually exist on Yelp for business owners.
To add your business on Yelp, follow these steps:
Visit the “Add your Business” page on the Yelp for business owners section of the website.
Enter the following details about your business: business name, address, phone number, web address, hours, categories, and email address.
Click “Add business,” and you’re all set.
Here, you can see how easy it is to fill in the necessary information to add your business to Yelp. Image source: Yelp
Adding your business on Yelp is extremely easy—so there’s really no reason to not be using Yelp for business owners.
Note that Yelp will take some time to process each new business submission. You’ll be notified when your business has been approved, but it could take a day or two.
Step 2: Claim your business.
Alternatively, your small business could already be on Yelp, even if you haven’t specifically registered for Yelp for business owners. This means that a customer of yours has probably left your business a review, even if you don’t already have a Yelp for business owners account.
If your business already has a profile with a few reviews on it, you can claim it as your own and set up your Yelp for business owners account. Simply click “Manage my free listing” on Yelp for business owners and enter the information you’re prompted to include (shown below).
Here, you can search for your business to claim an existing listing. Image source: Yelp
This is an obvious step to getting found on Yelp, but an important one. If you don’t claim your business’s profile on Yelp, just about anyone can set up your business’s profile. Once you’ve claimed your business and have a Yelp for business owners account, you have full control over how your business appears on Yelp’s search.
Plus, as an official Yelp for business owners member, you have access to a range of tools that help you manage your profile, interact with customers, post ads, and so on—we’ll dive into just how to do this later.
Step 3: Make your business profile.
Just as you want your customers to have a top-notch experience when they stumble across your business, you also want them to have a great experience when they stumble across your business’s Yelp profile.
So once you’ve added or claimed your business on Yelp for business owners, it’s time to optimize your Yelp business page.
First things first, make sure you’ve entered all your business information, and triple checked that it’s all correct. This is also where you can correct any wrong information if you previously weren’t in control of your Yelp profile.
To give your customers everything they need to know about getting in contact with your business, make sure you’ve fully filled out your location, hours of operation, price range, and other need-to-know details. Keep a keen eye out for incorrect location information—after all, many Yelp searches are used just to find the location of a specific business. And on that note, make sure that the location information your customers can find on Yelp is the same as what they see on Google or your business Facebook page.
Here you can see the different sections where you can edit your profile and information about your business. Image source: Yelp
Making sure all of your business’s information is there and correct is just part of assembling the perfect Yelp profile. You might also want to consider adding photos related to your business. Show off your newly renovated spa, your most beloved dish, or your best-looking haircut by adding your own photos of your products and services.
And to make sure your Yelp for business owners page looks sharp, use only high-quality images. The quality of your Yelp photos is a huge opportunity to stand out among your competition, so aim for at least five high-quality photos that show off your small business.
Step 4: Encourage reviews
Now that your Yelp for business owners page is optimized and looking great, it’s time to actually bring customers to your business. And one of the most obvious and important ways to drive Yelp users to your business is to have a wealth of great customer reviews.
Great customer reviews bring up your average star rating. And according to a Harvard Business School study, a one-star increase in reviews on Yelp brings about 5% to 9% more revenue to a business.
Now, the jury’s out on whether to actively ask your customers to review your business on your Yelp for business owners page. Technically, Yelp lets you ask customers for positive reviews on your profile. (You just can’t pay them for positive Yelp reviews or partake in some Yelp-review trading scheme.)
Asking for Yelp reviews might be the way to go when you know a customer who would give you a top-notch review but just needs a little nudge to get on the Yelp app. As long as you’re not too pushy about it—and you’re sure they’ll give a positive review—asking for good feedback can’t hurt.
But as you probably know as an experienced small business owner, customer reviews are best when they come naturally from customers who just hands-down love your business and want to share with others how amazing their experience was.
The best way to get more Yelp reviews is to keep providing a stellar product with excellent customer service. It’s as simple as that.
But here are a few other ways small business owners can naturally encourage reviews on their Yelp for business owners page:
Let people know you’re on Yelp. Broadcast that you created a Yelp page by sending out an email, updating your social media profile, or reaching out to people on your Facebook page. Make sure to put a Yelp banner on your website so your customers know you have a Yelp for business owners profile.
Put a physical Yelp sign on your business front. A way to encourage people to review your business on Yelp is to put a “We’re on Yelp!” sign on your front door or right next to your cash register. For an added nudge, print out other great Yelp reviews and put it next to the sign—it’ll help get your customers in the spirit of leaving similarly positive reviews.
Reach out to customers who have reviewed you in the past. If your customers have reviewed you on Facebook, Google Plus, or other review sites, odds are they’d be happy to review you on Yelp. A quick ask to anyone who’s had something nice to say about your business in the past is an easy way to get great customer reviews on Yelp.
Add your Yelp profile to your signature. If you’re always in contact with your customers via email, let them know that they can check out your Yelp page by adding a link to your signature. Be sure to plug your Yelp profile in any communication material that you send to your customers.
When it comes to getting found on Yelp for business owners, positive customer reviews are key. You’ve got a lot of options for encouraging reviews from happy customers—it just takes some creativity to come up with the best strategy for your business.
Step 5: Uncover good reviews and remove the unrelated.
Yelp has what’s called a “review filter.” The review filter can be one of the most frustrating aspects of learning how to use Yelp for business owners.
Well, the review filter is a function that flags reviews that seem fake or spammy as “not currently recommended” by Yelp. But it isn’t a foolproof system—Yelp doesn’t always get it right. Some positive reviews from your customers can be pushed down into the “not currently recommended” section. That means those awesome four- and five-star ratings won’t be calculated into your overall Yelp rating.
The valid Yelp reviews that get flagged in the review filter are usually those by one-time Yelp users, users without full profiles, or those who always submit five-star reviews. If you think that you might have a great review hiding in the not currently recommended section, you can try reaching out to the reviewer to engage them as an active user and let them know their comments aren’t being seen.
Once you’ve combed through the good reviews you might be missing, read through the reviews that are being factored into your Yelp rating.
Some of the not-so-stellar reviews are valid and must be dealt with. (Next up, we’ll cover how to deal with negative online reviews.) But some of those one-, two-, or three-star reviews are from customers who fundamentally misunderstood the purpose or service of your business, and didn’t have the experience they were expecting because of the misunderstanding.
In those cases, you can ask Yelp to review the customer feedback and remove irrelevant comments. This is an opportunity to report incorrect comments or those that don’t follow Yelp’s Content Guidelines. (Yelp’s Content Guidelines are short and well-worth the read—you’ll know how to spot reviews that you can easily get removed from your listing.)
Step 6: Be responsive to customer reviews.
Being responsive to reviews on your Yelp profile is a crucial way to have an active profile on Yelp for business owners—no matter if those reviews are positive or negative.
Yelp’s search algorithm favors business owners who actively manage their company’s profile, so responding to reviews can help boost your ranking in the site’s internal search engine.
When you get a positive review from a customer, let them know you appreciate it—leave a genuine and personal comment thanking them for their business.
And while you always hope that every customer experience with your small business is a positive one, negative reviews will pop up on your small business’s Yelp page. When this happens, it’s crucial that you respond to any customer complaints in a sincere, constructive, and collected manner.
Here is an example of a business owner responding promptly to a review on Yelp. Image source: Yelp
Nothing good can come from getting angry with disappointed customers. While the experience might have been a misunderstanding—and you are in the right—it’s always best to apologize and ask how your product or services could have been better. Or, publicly state how you’re trying to be better yourself—this shows potential customers that you care about their experience at your small business. Once you’ve publicly addressed the situation, consider privately messaging the customer to reiterate your apologies and further explain the situation.
In fact, negative reviews have a good chance of becoming positive once you’ve addressed the situation and responded to the upset customer. And if your response takes away some fuel from their angry-review fire, then you might be able to encourage the customer to revise or redact their comment.
Step 7: Make announcements and increase your offers.
If you have a noteworthy update or change to your business, announce it on your Yelp for business owners page. Maybe you’ve put together a great new dessert menu, or you’re having a blowout winter sale.
Let your customers know that now is the best time to visit your business by using the Yelp announcement tool. This Yelp for business owners tool is an easy way to stay connected with customers and attract potential clients. All you have to do is create an announcement and publish it to your Yelp page.
And while you’re at it, you can increase your offers and deals for customers who find you through Yelp. Offer discounts on services or meals, buy-one-get-one-free specials, or gift certificates for new customers. Whatever incentivizes your customers to walk through your business’s door is worth promoting on Yelp.
Or you can try running one of Yelp’s official “Yelp Deals.” Yelp Deals lets you offer a discount that Yelp users claim through the site. Yelp then promotes your profile to a wider audience of Yelp users to generate revenue through deal purchases. All this means more eyes on your Yelp page—and your business. One thing to note: Yelp doesn’t charge you for using a Yelp Deal, but they will take a percentage of any of the money made from deals.
Step 8: Use your Yelp dashboard.
How is your business doing on Yelp? Are you getting found? Is it moving the needle for your small business?
Luckily, you don’t have to measure your performance on Yelp blindly. Yelp keeps business owners out of the dark with a Yelp dashboard. When you have a Yelp for business owners profile, you can track your behind-the-scenes metrics on your business’s performance on Yelp.
Here you can see the Yelp business owners dashboard where you can monitor your profile and analytics. Image source: Yelp
You can track the amount of traffic your Yelp profile is getting, see how many times your business shows up on a Yelp search result, or track your “User Actions” to see how users engage with your business’s Yelp profile.
If you really dig into it, Yelp’s internal web analytics tools can really tell you some interesting things about whether Yelp is a valuable customer funnel to your business. And if you see that Yelp does add a lot of value to your business, then maybe it’s time to upgrade from a free Yelp for business owners profile and start paying for advertising on Yelp.
Yelp for Business Owners: Costs
Although most of the best practices for Yelp for business owners above are available for free with your standard Yelp for business owners profile, there are additional features you can pay for if you want your Yelp business listing to stand out even more.
Free version: $0 per month
The free version allows you to claim your business and establish your profile among the Yelp community. You’ll have some control over the content that’s on your profile, and the ability to upload your own photos and respond to reviews. Yelp describes this level as allowing you to do the following:
Update your business information
Add your categories and service offerings
Respond to reviews
Respond to appointment or quote requests
Create a Yelp Deal or Check-in Offer
Yelp Enhanced Profile: $90 per month
Beyond these free capabilities, you can also choose to upgrade your business listing with a Yelp Enhanced Profile. As Yelp says, “businesses with an Enhanced Profile see a 38% increase in leads on average.” Basically, this version allows for more customization than the free Yelp for business owners version, as you can add call-to-actions and remove your competitors’ ads. Here’s what Yelp says this version can do:
Add a call-to-action button ($1 per day, a la carte)
Remove competitor ads from your page ($1 per day a la carte)
Customize the order in which your photos or videos appear
Although the Yelp Enhanced profile costs $90 per month, you can also purchase one or more of the components a la carte.
Yelp Business Page Upgrades: $1 to $2 per day
You also have the option to purchase Yelp business pages upgrades, including Business Highlights, Portfolio, and Yelp Verified Licence.
Business Highlights ($2 per day or $1 per day for businesses who also purchase search ads): These allow you to showcase what you want your business to be known for, like being vegan or the number of years you’ve been in business. There are badges you can pick and choose from to highlight on your business profile.
Portfolio ($2 per day): The new Portfolio option allows you to add more photos and custom descriptions to help customers get a better idea of your business.
Yelp Verified License($1 per day): With the Yelp Verified License, you can get a checkmark next to your business to show that you have a valid business license—so that customers can make informed purchasing decisions.
Yelp Ads: Cost varies
And finally, you can further promote your business listing with Yelp Ads. This product is pretty straightforward: it allows you to create and customize ads for your business on the Yelp app.
What do these ads look like? Well, they’re at the top of the page when a user searches for a business. You’ve probably seen them before, whether you realized it or not.
They’ll look like any other listing on Yelp, but there is a little green icon that calls out the fact that the listing is actually an advertisement. You’ll also notice that these Yelp ads only feature businesses with three stars or more. That’s because you can’t actually advertise on Yelp for business owners if you have a lower rating.
Like other advertising platforms, Yelp advertising for business owners is based on a cost-per-click basis. You’ll only pay when a user clicks your ad. The pricing depends on two factors: saturation and relevancy. If your area is saturated with businesses similar to yours, then you’ll pay more to compete on searches relevant to your business.
And if you’re competing on terms that are extremely relevant to your business, you’ll likely pay less on a cost-per-click basis. Of course, you can also advertise your business online outside of Yelp, as well, including free advertising channels or other low-cost options.
Tips for Businesses Owners to Use Yelp Successfully
Now that you have a solid understanding of how to use Yelp for business owners, let’s dive deeper into some of the tips that might help you find greater success on this platform. If you’re looking to streamline your performance on Yelp for business, you’ll want to keep these best practices in mind:
Set up your own personal Yelp account.
While Yelp can be a blessing for business owners, some entrepreneurs have mixed feelings toward the platform. Frustrating aspects of not getting found or receiving negative reviews can taint Yelp for business owners as a whole.
One way to get more familiar with Yelp and the benefits of using it is to make your own personal Yelp account and use it frequently. Search for businesses, leave reviews, and use the search filters.
Doing so will give you greater familiarity with how Yelp works and will put you in your customers’ shoes. You’ll understand how they find your business by finding other businesses yourself.
When you start leaving reviews on other business’s profiles, you might gain some tips and tricks to dealing with your own Yelp for business profile.
Use Yelp’s customer service team to your advantage.
Yelp’s customer service team tries very hard to get small businesses advertising on Yelp. And once you start working on Yelp for business owners, you’ll be sure to get lots of inquiries on your interest in advertising.
This can be a nuisance for busy small business owners who have no intention of spending money on Yelp for ads. However, the Yelp customer service team is eager to work with you.
When something goes wrong on Yelp for business—you’re having trouble switching business locations on the platform, or you can’t report reviews, and so on—try reaching out to the customer support team.
When you have a problem that you can solve yourself on Yelp for business, the customer success team is usually happy to help you resolve it.
There aren’t a lot of tips we can give to help you rank number 1 on every Yelp search all the time. Like most search engines, the algorithm behind Yelp’s search engine is a mystery.
But when it comes to getting found and staying found on Yelp, it’s important to stay active on your Yelp for business owners profile. Respond to customer reviews regularly, make announcements, or post special deals—whatever it takes to stay in front of Yelp and their users’ eyes.
“Keep your page up to date because Yelp’s search algorithm favors active company profiles. It’s crucial to regularly respond to customer reviews and share fresh content. You should keep your business page relevant, posting updates and announcements, sharing special deals, and uploading new pictures regularly. Keeping an active profile comes with no additional costs and a minimal time commitment. You can set only about half an hour a week to interact with customers. In this way, you’ll ensure that your visitors will have relevant information and encourage them to interact with you.”
When it comes down to it, if you let your Yelp for business owners profile go untouched for a long while, your customers—and Yelp itself—might think something’s up with your business.
And as, Johar mentions, being active on Yelp comes at no financial cost to you and adds visibility to your business on all accounts.
Make it known you’re on Yelp.
As we mentioned above, it’s one thing to set up your Yelp for business profile, but it’s another thing to actually get customers to see your profile and leave you reviews. Therefore, it can be extremely useful to let your customers know you’re on Yelp.
Of course, you can add a “we’re on Yelp” sticker to your door at your physical location, but there are other marketing tactics you can employ as well.
“Do not confine yelp stickers only to doors. This platform runs on reviews, so go crazy for them. Many companies place stickers like “people love us on Yelp” or “find us on Yelp” on their main entrance. However, you should put such stickers inside business premises as well. Such notes would be a gentle and continuous reminder to visit your business on Yelp. Additionally, train your staff to ask clients about their experience and then ask happy clients to give a review on Yelp.”
In addition, you might let customers know you’re on Yelp and encourage them to leave reviews by:
Including a Yelp icon wherever you show your social media icons (like on your business website, on business cards, etc.)
Add a reminder for customers to leave you review on physical or digital receipts
Link to your Yelp page from your business website, as well as your social media profiles
Send out email or mobile marketing communications regarding your Yelp profile and leaving reviews
Use the Yelp for business app.
Although you can start and use the entirety of your Yelp for business owners profile online, you can also download the Yelp for business app to manage it from your mobile device.
Here you can see some of the things you can do with the Yelp for business owners app. Image source: Yelp
With the app, you can:
Track engagement and leads.
Respond to reviews, as well as inquiries and messages.
Upload and manage photos.
View reports on ad clicks from Yelp users (if you use Yelp advertising)
Report reviews and messages.
The Yelp for business app is a great tool for busy business owners, allowing you to maintain your Yelp presence regardless of location. Along these lines, this small business app helps you implement our previous tip, “stay active.” It’s quick and easy to stay active on your Yelp for business app when you can simply pull out your phone and respond to reviews.
Yelp for Business Owners: Frequently Asked Questions
We’ve given you a deep dive into the Yelp for business owners platform, but you might have a few outstanding questions. Here are some frequently asked questions:
Should I upgrade to a paid version of Yelp for business?
After reviewing the different options from Yelp, you might be wondering what option is right for your business.
Here’s the deal: If you have the time to put in effort maintaining the free version of your Yelp account (uploading photos, responding to reviews, encouraging reviews, and so on), your profile should organically attract customers—doing the work for you.
If you put in the effort to maintain your page, you probably don’t need to pay for extra services on your Yelp for business owners account.
However, there are a few scenarios where you might want to pay for the extra options. For example, restaurants generally benefit most from paying for Yelp advertising—especially if you operate in a competitive area. If you run a Mexican restaurant that operates in an area with a ton of direct competitors, maybe you want to pay to make sure your listing is seen.
Or, you might have a ton of great reviews, but find that your profile isn’t being found. Those businesses might want to opt in to have their listing seen.
On the flip side of that, if you don’t have a ton of reviews, it’s probably not worth paying to get your Yelp page seen as customers tend not to go to businesses with relatively few reviews.
Yelp has many different types of small businesses on their platform. So if you’re not a restaurant and are wondering whether to invest in managing your Yelp account, take a look at the chart below. As you can see, many different businesses are on Yelp. If you’re not on there, your competitors probably are, so it’s probably worth learning how to use Yelp for business owners.
Different kinds of businesses that use Yelp. Image source: Yelp
How easy is it to use Yelp for business owners?
For many businesses, Yelp is one of the easier ways to gain visibility among potential customers. The free version is the easiest to use, allowing you to upload photos of your business and respond to customers.
Although the Yelp advertising product is easy to use and you’ll have support available to you, there have been complaints with the lack of functionality of their advertising platform.
The Bottom Line
So, if you want to get found on Yelp, always update your profile, keep up the positivity, and stay active.
If you run a fantastic small business with a loyal customer base, there’s no reason why you won’t succeed on Yelp for business owners. Plus, the more time you spend learning how to use Yelp for business—whether online, through the app, or both—the better understanding you’ll have of the platform, and the better results you’ll see for your small business.