Starting a small business can be both exciting and overwhelming. To set yourself up for success, start by creating a solid small business plan. A business plan not only helps you clarify your ideas but also serves as a roadmap for growth and a tool to attract investors and secure loans.
What is a Small Business Plan?
A business plan is a document that explains what your business does, how you intend to make money, and what your future strategies will be. According to the U.S. Small Business Association, “Your business plan is the tool you’ll use to convince people that working with you—or investing in your company—is a smart choice.” It often includes a mission statement, details about the products or services offered, and a timeline for achieving goals. They are also living documents, so you can—and should—change your business plan as your business evolves.
What to Include in Your Small Business Plan
As the U.S. Small Business Association notes, there is no right or wrong way to write a business plan. The key is to structure your plan to meet your business’s needs. Here’s a simple guide to help you write a small business plan (along with some essential business banking tips to keep in mind).
1. Executive Summary
What it is: A brief overview of your business, including your mission statement, the products or services you offer, and your business goals.
Why it matters: This section captures the essence of your business and is often the first thing potential investors or lenders will read. Keep it concise and compelling.
2. Business Description
What it is: A detailed description of your business, including its history, the market needs it will meet, and what sets it apart from competitors.
Why it matters: This section shows you have a clear understanding of your industry and your place within it.
3. Market Analysis
What it is: An analysis of your target market, including demographics, buying habits, and market trends.
Why it matters: Demonstrating knowledge of your market can help you craft strategies that resonate with your audience and help you stand out.
4. Organization and Management
What it is: A breakdown of your business’s organizational structure, including the roles of your team members.
Why it matters: This section shows that you have the right people in place to execute your business plan.
5. Product Line or Services
What it is: A detailed description of the products or services your business will offer.
Why it matters: Clearly defining what you’re selling helps investors and customers understand your value proposition.
6. Marketing and Sales Strategy
What it is: Your plan for attracting and retaining customers, including pricing, promotion, and distribution strategies.
Why it matters: A strong marketing plan shows that you’re serious about reaching your target audience and generating revenue.
7. Funding Request
What it is: If you’re seeking financing, this section outlines how much money you need, what you’ll use it for, and how you’ll repay it.
Why it matters: Being clear about your financial needs and plans shows lenders that you’re responsible and prepared.
8. Financial Projections
What it is: Forecasts of your business’s future financial performance, including income statements, cash flow statements, and balance sheets.
Why it matters: This section shows potential lenders and investors that your business is financially viable.
9. Appendix
What it is: Additional information that supports your business plan, such as resumes, permits, and other legal documents.
Why it matters: The appendix provides credibility and additional context for your business plan.
Writing a small business plan might seem daunting but breaking it down into these sections makes it manageable. Remember, your business plan is a living document—update it regularly as your business grows and changes.
With a well-thought-out business plan and the right banking strategies in place, you’ll be better positioned to navigate the challenges of starting and growing your small business.
Small Business Banking Tips
- When seeking funding, consider opening both business checking and savings accounts to draw a clear line between your personal and business finances. This makes managing your finances easier and more professional.
- Use online business banking tools to monitor your cash flow regularly. Many financial institutions (including Maps) offer budgeting tools that can help you track expenses and income in real time, making it easier to stay on top of your financial projections.
- As your business evolves, your banking needs might change too. Regularly review your business bank account, credit options, and financial services to ensure they align with your current goals.
Want more small business strategies?
- Check out our article on how to minimize small business taxes (coming soon).
- Learn about the business banking tools Maps has to offer.
- Find out whether your side hustle should become a small business.