Start Small, Think Big: Creating A Small Business Plan

If you’re ​​starting a small business, you likely have a lot on your plate. Small businesses take a lot of work: designing a service or product, getting your website up and running, connecting with distributors and marketers, and seeking out funding. And that’s all before your business launches.

We understand that making a business plan might sound like just another task on your to-do list. But the truth is, a plan will help you streamline and organize your ideas in a way that saves you time later. A business plan can even help you earn more money (or at least source some startup funds). Investors who back your business will want to see this plan.

Starting a new business is a journey, and as with any voyage, you want to begin with a plan and all the tools you need. Making a business plan for your small business will set you up for success in the long haul – and we’re here to help.

Why is a business plan important?

Your mind is full of innovative, bold, and effective ideas for your business. Why bother putting them onto paper? Well, even the best ideas can be hard to articulate. Investors or marketers, for example, may not be able to share in your vision unless you paint a clear picture for them. And, in painting that picture for others, you’ll solidify your ideas for yourself. Making a plan for your small business will help you define details, crunch numbers, and create actionable goals.

What goes in a small business plan?

Making a business plan is about solidifying the details of your operation. But which details should you include? Let’s explore how to write a small business plan that’ll serve as a roadmap for your entrepreneurial journey. The following are must-have sections to wow investors and collaborators.

If this is your first business plan, we recommend starting with a business plan template, which will walk you through the process of formatting this document, step-by-step.

Executive summary

An executive summary gives a high-level view of your company’s operation. Try to boil down the essence of your business into just a few lines that explain what you do, how and why you do it (i.e., a mission statement), and who your products or services are for.

Company description

In this space, describe what your business achieves. Do you sell locally made ceramics? Are you launching a fashion boutique? Starting a tea shop? Show the reader what your small business is made of – literally. Also include details about how you’re registered and the company’s legal structure.

Market analysis

Market research helps you and potential investors understand the performance of the industry you intend to enter. Research the net worth of the market and growth projections to round out this section of your business plan. Be sure to establish your target market or demographic, so readers understand how your business fits into the industry.

Competitive analysis

Unless you’re the first business of your kind, you’re going to have some competition. Research and present who else in your area (the location of a brick-and-mortar store or on the web) is offering similar products or services. If you can, find out how their prices and products compare to yours. Detail what makes your business stand out – that is, what gives you a competitive advantage.

Sales and marketing

In this section, spell out how you intend to find and keep customers. You may own the coolest clothing boutique your city’s ever seen, but if fashionistas don’t know about it, sales will be slow. Make clear your social media marketing strategy and any print, radio, or digital ad campaigns you plan to launch. When developing your brand, make sure all of your platforms are accessible. You can use a Linktree URL in your social media bios to link to your other feeds and business website.

Operations and management

Clearly outline the day-to-day and big-picture tasks essential to running your business. If you’re the only one at the helm, performing this exercise can help you feel out whether it’s actually feasible to do it all on your own. You may discover you need to hire an employee or outsource time-consuming tasks, like accounting, which are done best by a professional anyways. It’s also a good idea to list the key players in your operation, including any partnerships that keep your business running (like your suppliers or distributors).

Financial plan

In this part of your business plan, set your financial goals and explain how you intend to reach them. Include the metrics you’ll consider and any milestones you hope to achieve with a timeline. Complete financial plans include cash flow statements, balance sheets, profit and loss statements, and an outline of your startup costs.

Funding and financing

You can include this section separately or as part of your finances, but all startup operations like yours should describe any funding or financing (i.e., loans) you’ve received or plan to apply for. Small business owners don’t always have the cash to fund their company from the start, so figuring in loan payments, interest, and returns will help you make better financial projections.

Appendix

You can wax as poetic as you please in the sections of your business plan, but readers will want you to show your work. In the appendix, include the supporting documentation that helped you arrive at your estimates, projections, and conclusions. An appendix allows you to keep your other sections short and tidy because the more in-depth information lives elsewhere. You can also use this space to include charts, tables, and visuals that don’t fit into the other pages, which is especially helpful if you’re making a one-page business plan.

Don’t be afraid of challenges

Starting a small business isn’t easy, but you’re the right person to do it. You have an idea you’re passionate about, and just by reading this, you’re making a proactive effort to learn about small business planning. So, whether you realize it or not, you’re already laying the groundwork for success.

Creating a business plan will help you face challenges as they arise, even if you didn’t see them coming. You can rely on all the research and thought that went into your business plan when you need a guide. And remember, this is a living document – it will grow and change with you as you learn more about your industry and how to run your business.