What Is a Small Business Plan? (And How Do You Make One?)
If you’re starting a business (or trying to grow one), few documents are more important than a small business plan.
A business plan is your company’s playbook: It lays out your goals, the strategies you’ll use to achieve them, and the resources you’ll need along the way. But it’s more than just a written document for your own reference — it helps you stay focused, shows potential investors and lenders that you’ve thought through your approach, and serves as a roadmap when challenges arise. Without one, your business might lack direction, making it more difficult to secure funding, attract partners or keep operations on track.
So, what exactly goes into a small business plan? We’ll explain that, and show you the basics of how to make one.
Why a Business Plan Matters
A well-constructed business plan does several things:
- Clarifies your vision: Writing down your goals forces you to think critically about your mission, values and long-term objectives.
- Provides a roadmap: It outlines the steps you’ll take to reach your goals, giving you a clear path forward.
- Builds credibility: Investors, lenders and potential partners often require a business plan before committing money or resources.
- Helps you anticipate challenges: By considering risks and potential obstacles in advance, you’ll be better prepared to address them.
- Measures success: A business plan provides benchmarks to compare your progress against over time.
Even if you never plan to seek outside funding, a business plan can keep your business grounded and focused.
Key Elements of a Small Business Plan
While every business plan will look a little different depending on your industry, market and stage of growth, most plans include the following core components:
1. Executive Summary
This section is the “elevator pitch” of your plan. In a page or less, explain who you are, what your business does, and why it matters. Investors often read this section first — and sometimes, they read only this section — so make it compelling.
2. Company Description
Here, dive deeper into the details. What problem does your business solve? Who are your customers? What makes your company unique? Be sure to highlight your competitive advantages.
3. Market Research and Analysis
No business exists in a vacuum. This section outlines your target market, customer demographics and industry trends. Include an analysis of your competitors, along with your strategy for standing out from them.
4. Organization and Management
Investors want to know who’s steering the ship. This part explains your business’s structure (sole proprietorship, partnership, LLC, corporation) and introduces your leadership team, their experience, and their roles.
5. Products or Services
Describe what you’re selling or offering. Explain how it benefits your customers, what makes it unique and how you plan to develop or improve it over time.
6. Marketing and Sales Strategy
Here, spell out how you’ll reach and retain customers. Will you focus on digital marketing, social media, trade shows, referrals or a combination of methods? Detail your sales process and customer engagement approach.
7. Financial Projections
Numbers matter. Provide detailed financial forecasts, including projected income statements, balance sheets and cash flow statements. If you’re seeking funding, this is where you explain how much you need and how you’ll use it.
8. Funding Request (If Applicable)
If you’re approaching investors or lenders, outline your funding requirements, preferred terms and how the money will help your business grow. If you think you might need additional funding in the future, consider adding a timeline and amounts.
9. Business Documentation
This section serves as the supporting library for your plan. Include essential documents such as licenses and permits, organizational charts, contracts, supplier agreements, partnership documents, product photos and resumes of key team members. Having these materials organized in one place gives investors, lenders or potential partners confidence that your business is legitimate, prepared and well-structured.
A Few Tips for Writing a Strong Business Plan
Looking past the components you’ll need, here are a few things you’ll want to keep in mind as you write your plan:
- Keep it clear and concise. A long, jargon-heavy plan might overwhelm readers. Aim for clarity over complexity.
- Tailor it to your audience. An investor might want to see detailed financials; a partner might be more interested in your market strategy.
- Be realistic. Overly optimistic financial projections can cause you to make too-aggressive decisions if you find you’re falling behind. They can also backfire if they help you secure funding but you can’t meet those expectations.
- Update regularly. A business plan isn’t static — it should evolve as your company grows, your market changes or your goals shift.
- Use visuals. Graphs, charts and tables can make your data more digestible and persuasive.
Ready to Build a Stronger Business?
A solid business plan is one of the smartest investments you can make in your company’s future. It serves as the foundation for your operations, it can clarify your goals and it can win over potential investors. But putting one together isn’t always easy — especially when you’re busy running the day-to-day.
That’s where expert support can make a difference. McManamon & Co. is an accounting, tax, fraud, forensic and consulting firm that serves small and midsize businesses. Our consulting team can help you with financial projections, market research insights and strategic planning guidance so you can create a business plan that works for you.
Call us at 440.892.8900 or contact us online today to start building the roadmap to your business’s success.
Tags: consulting, McManamon, McManamon & Co., small business, small business consulting | Posted in McManamon & Co., small business