Does your small business have a business plan? It can be very helpful as you establish and run your enterprise.
A business plan is a formal statement of goals, reasons they are attainable, and plans for reaching them. Often, a business plan is required when applying for a small business loan. (Note: SmartBiz does not require a business plan when seeking an SBA loan)
The Executive Summary is just that – a summary of where you are and where you plan to go with your small business. Elements that are included are the mission statement, company information, growth highlights, and products and services offered. Financial information can be summarized here.
What do you sell and how are you selling it. Make sure this is tight so that anyone reading will immediately “get it.”
This is where you show the research you’ve done in your industry about the market and the competitors. Outline why your company is different and how you plan to capture market share.
Organization & Management
Set yourself up for success by building a strong organizational and management foundation. This is where you will outline the structure for your business.
Service or Product Line
Outline what you offer and how it benefits your target customer. List copyright or patent filings here and disclose if key aspects of a product may be classified as trade secrets. Nondisclosure, non-compete or other legal agreements should be listed as well as research and development activities.
Marketing & Sales
Give an overview of how you intend to increase product awareness, attract customers and increase sales.
If you’re seeking funding, this section is vital. List your current funding requirement, future funding requirements over the next five years and how you intend to use the funds you receive. Lenders want to know that you have the cash flow required to make loan payments.
According to the SBA, if you need funding, providing financial projections to back up your request is critical. This should include historical financial data for three to five years, as well as prospective financial data.
The Bottom Line
Every business plan is unique. Make sure that the one you create makes sense for your business moving forward. A living document, your business plan can help you project 3-5 years ahead and outline the path you need to take for growth.
You don’t have to go it alone. Check out the resources below for assistance.
FitSmallBusiness.com has a great article that can be very helpful. Bplans.com offers inspiration with a gallery of over 500 business plan examples. You’ll be able to select the category that is closest to your own business or industry, and view a plan you like. SCORE is a non-profit organization dedicated to helping small business owners and entrepreneurs. Their services include free mentoring from business professionals and workshops. Contact your local branch and ask if they have resources available to help you write your plan. The Small Business Administration has an online tool that takes you step-by-step through the business plan creation process. If you’re looking for a software solution, Fit Small Business compares the two leading cloud based business plan software options: LivePlan & Enloop. Both will help entrepreneurs create a professional business plan, including charts and spreadsheets with financial projections.