Whenever you visit with investors to secure a loan for your small business, they’ll want to see a business plan so they can understand your intent. A business plan provides a neat snapshot of your business’s past, present and future.

As a small business owner, a business plan is not only necessary when dealing with lenders, it can also help keep your mission clear and concise and serve as a continual point of reference.

Writing a great business plan comes with a few important points of emphasis, and you’ll want to keep these points in mind as you craft or update yours. Let’s get started.

What to Include in a Business Plan

First, we need to address what you’ll include.

A business plan is a fairly standard document that is always made up of eight sections. Each section conveys a certain set of information about your company that investors will consider individually and as a whole.  

Executive Summary

The executive summary is often the first thing that investors will read. If they like what they see, they’re likely to continue reading the rest of your business plan.

Your executive summary need only be a couple of paragraphs long, but it must be compelling and pique the interest of the investor. You’ll want them motivated to learn more about what makes your business a worthwhile investment.

Some information that you’ll want to include:

  • The nature of your business
  • How long you’ve been in business
  • A summary of your current business successes
  • Highlights of your business model
  • Your business goals in 3, 5, 10 and 20 years
  • A brief explanation of how you plan to achieve those goals

Company Overview

The company overview is a broad look at how your business operates. Think of this section like a deeper look into the executive summary, but not yet getting into the nuts and bolts of the day-to-day running of the business. It’s a piece of the puzzle that someone may look at to discover, “What’s this company all about?”

The company overview section of the business plan should start off with a more in-depth explanation of how your company executes its business model. For example, if you were Netflix, your executive summary might state, “We are an entertainment provider.” In the company overview, you’d elaborate, stating, “We provide subscription-based live-streaming of movies and television shows.”

The next thing the company overview should cover is who your customers are. Are you B2B or B2C? What’s your target demographic? How many customers are you currently serving?

Answer the question of how your business fits into the industry. Do you contract directly with production or manufacturing companies to distribute their services and products, or are you an independent company?

Finally, discuss the key figures in your business and their roles in the operation of the company. You don’t need to get into the details of their expertise. That will come later in the Owner and Key Employees Information section.

Market Analysis

Now, you’re getting into the viability of your business in the overall marketplace. Assume that your reader is still interested and they want to find out what kind of market share your business has.

Your goal is convincing the reader that you have a firm grasp of your place in the market and that you understand your competitors’ strengths and weaknesses.

In this section discuss:

  • A look at the industry – How big of an industry is it? What’s the history of it and what’s the future look like? Is it growing exponentially, evolving? Are you at the cusp of an entirely new industry?
  • Details about your target demographic – Who’s in your target market? What kind of market share do you have? How much do you project you can claim in the future?
  • How do you serve the needs of your target market? – is there a demand for your products or services? What does your business offer that competitors don’t?
  • Who your competitors are – Be specific. Answer the questions of who they are, what their sales are, who their customers are and what their market share is. What are their strengths and weaknesses?
  • Challenges you need to overcome – What challenges does your business face? Do you lack logistics support? Need financing for inventory or lobbying for government regulation?

Business Organization

Your business plan structure should include a section on business organization. In this section of your business plan, you’ll get into the technical setup of your business. The first thing to mention is how your business is organized. Is it an LLC, S-Corp, C-Corp or sole proprietorship?

Next, talk about who runs the business. Who are the key personnel, what are their titles and what does their job role entail? Do you have a Board of Directors? Do you consult with any 3rd party business professionals? Do you have outside legal counsel?

Include sections on the relevant backgrounds of key personnel. What makes them suitable for their role? What components do they bring to the table that helps ensure your business’s long-term viability in the marketplace? What past successes have key personnel brought to previous employers?

Include any plans you may have to increase personnel. Explain your reasons for needing to hire additional key staff members and how they will add value to your company.

Products and/or Services

Now that you’ve explained the organizational structure of your business, your role in the marketplace and the expertise of your key personnel, it’s time to delve into the details of your product or services.

Begin by explaining what it is your business sells. Describe the product or services in detail, including any patents that you may hold. Include specifics such as sourcing. Where do you get the materials to make your product? Do you import the product in whole or in part?

Describe the relationship between you and your suppliers. Do you always use contracts? How long are the terms of any existing contracts with suppliers, manufacturers or distributors?

Marketing and Sales Plan

Investors want to know how you get your products or services to catch the eye of prospective clients. The marketing and sales plan section of your writeup should include information about your marketing budget, strategy and implementation.

Questions you should answer in this section include:

  • Do you have a sales team?
  • Do you use a sales funnel or CRM service?
  • What strategies do you use to place your products and/or services?
  • How do you anticipate your marketing and sales plan will evolve in the future?

Financial Plan and Projections

Finally, you’ve neared the conclusion of your business plan.

The financial plan and projections aren’t the least important, though. In fact, your investors may have already skipped to this section to find out how financially stable your business is.

This section speaks to your business acumen. Investors want to work with small business owners who understand the importance of a sound financial profile and who know how to make a business grow.

The financial plan and projections section will include:

  • Income statements for the last 12 months
  • Cash flow statements for the last 12 months
  • Current balance sheet
  • Current A/R report
  • Current A/P report
  • Statement of debts

Owner and Key Employees Information

The owner and key employee information is essentially an appendix that is comprised of resumes. No further information is necessary, except to attach all the resumes of the owner, key employees and executive personnel, including those of the Board of Directors if you have one.

How to Write a Business Plan for a Small Business

A business plan can seem like an overwhelming document to compile. But if you take it section by section, it’s completely manageable. Knowing how to write a small business plan begins with understanding the eight sections every good business plan should have, which you’ve just reviewed. So, you’ve already finished the first step.

You can draft your business plan on paper to get your thoughts in order. It helps to think about why you started your business in the first place. What was your motivation? What did you hope to achieve? This will form the basis for the executive summary.

From there, the business plan follows a logical order of facts and information about your future plans.

Your business plan is a valuable document that can assist you in procuring financing, help you navigate the future of your business and assist you in making financial and administrative decisions.

Done well, it can become the basis for the entire foundation of your company’s culture. The simple process of writing a small business plan can help you to clarify your own reasons for being in business in the first place.


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