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How to Write a Small Business Plan: Structure, Format and More

By Barb Weidner Reviewed By Mike Lucas
By Barb Weidner
By Barb Weidner Reviewed By Mike Lucas

Whether you’re getting your startup off the ground, or you’re a long-time small business owner in search of additional capital, knowing how to make a solid business plan can help you get funding approval and pique the interests of investors. Lenders and investors want to see you have a clear, concise mission for your business and a plan to help you achieve your financial and organizational goals.

Putting together a business plan can also help keep your internal operations on track and serve as a continual point of reference for you and your staff.

Let’s go through how to write a great business plan — what elements to include and how to put it together. 

Coworkers review business plans during a meeting

What Is a Business Plan?

A business plan lists your business’s objectives and the steps you’ll take to achieve your goals. It should include directives for your marketing and financial targets, as well as for your general operations. 

What to Include In a Business Plan

What does a business plan look like? Your business plan is a fairly standard document that, in general, contains 8 sections. Each section shares information about different facets of your company that investors and lenders will consider individually and as a whole.

1. Executive Summary

Your executive summary is the condensed version of your entire business plan and gives the reader the highlights of the rest of the document. The executive summary is the most important part of your business plan and is likely the first thing investors will read. 

Your executive summary need-only be a couple of paragraphs long, but it must be compelling.

2. Company Overview

The company overview is a broad look at your business and how it operates. It should contain your business’s history as well as its current mission, management, location and legal structure. 

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.

3. Market Analysis

In the market analysis section of a business plan, you address the viability of your business in the overall marketplace. The market analysis section will report on the following:

  • Your industry as a whole
  • Details about your target demographic and how you meet their needs
  • Your competition
  • Challenges to meeting your goals

Your reader will want to know what kind of market share your business has.

4. 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?

Include who runs the business. Who are the key personnel, what are their titles and what do their job roles entail? 

5. Products and/or Services

Now it’s time to delve into the details of your product or services.

Explain the product or service your business sells. Describe these in detail, including any patents that you hold. 

6. 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.

7. Financial Plan and Projections

Although this section is near the end of your business plan, the financial plan and projections are very important. 

This section speaks to your business acumen and contains profit and loss statements, your balance sheet and sales forecast, among other information.

8. Appendix

In this section, compile any additional or supporting documents to supplement the previous sections. The appendix can include content such as financial statements, photographs and permits.

How to Write a Business Plan Step by Step

Putting together a business plan might seem daunting, but if you take it section by section, it’s completely manageable. 

Let’s dive into the steps in writing a business plan.

Executive Summary

The executive summary is often the first thing that investors will read. When you consider what to include in a business plan’s executive summary, think about why you started your business. Your mission forms part of the executive summary’s basis.

Your executive summary doesn’t need to be longer than a couple of paragraphs long, but it must be compelling. After reading your executive summary, lenders and investors should be motivated to learn more about what makes your business a worthwhile investment.

Include the following information:

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

Some sources recommend writing the executive summary last, even though it appears first in your business plan. 

This might seem counterintuitive to how to write a business plan, but your executive summary is a digest of the rest of the plan, so it’s helpful if the rest of the document is plotted in full before attempting to write it.

Company Overview

The company overview section of the business plan should cover the business’s past, present and future goals. 

How to write a company overview in a business plan? The company overview section should start 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.”

Continue with the following details:

  • Company history: Discuss your company’s founding
  • Current management team: Who are in the key roles at your company and what are their responsibilities?
  • Legal structure: How is your business organized (e.g. LLC, S- or C-corporation) and who has a stake in the ownership?
  • Location: Where is your company headquartered? List any other places your business operates or wants to acquire (e.g. satellite offices, warehouses, additional retail stores, etc.). 
  • Mission statement: Your business’s goals and values, summarized

Market Analysis

In your market analysis, your goal is to convince 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 are your competitors?: 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

In this section, not only should you describe your business’s legal structure and who are your key personnel, include relevant background information about those major players. 

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

Here you’ll get into the specifics of your business’s services and/or products. 

What do you provide? 

Include details such as sourcing. Where do you get the materials to make your product? Do you import the product in whole or in part?

Also 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

Your marketing and sales plan section will detail those strategies and their execution. Questions you should answer in this section include the following:

  • 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

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.

If you’re wondering what to include in this section of the business plan, make sure you incorporate:

  • 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

Appendix

Keep in mind that how to write a good business plan means details. The more meaningful information you provide, the better it will look to potential investors and lenders. 

However, don’t include material for the sake of having additional elements. Everything should supplement your report on your business’s current status and future goals.

Your business plan’s appendix should include materials such as:

  • Charts
  • Photographs
  • Permits, licenses and patents
  • Marketing materials
  • Contracts 
  • Financial statements
  • Personnel resumes

Tips for How to a Make Business Plan

As you follow the steps in writing a business plan, keep the following advice in mind:

Be Realistic

Ensure any claims or projections in your business plan can be backed up by results or solid research.

Tailor Your Plan to Your Reader(s)

Various parties — lenders, investors and potential partners — will look at your plan to decide if it’s a safe or worthy endeavor, and they’ll need to see information customized to answer their specific questions and objectives.

You should also adjust your plan as your business changes and grows throughout the years. A business plan you craft during your startup days won’t reflect your business’s reality 2 or 3 years down the road.

Barb Weidner CEO at Fast Capital 360
Barb Weidner is the co-founder and CEO of Fast Capital 360, a leading online business loan marketplace. Prior to entering the Fintech space, Barb was the Chief Credit Officer for a mid-sized mortgage bank based in NY. Barb is passionate about simplifying the lives of small business owners and empowering them with the resources they need to thrive.
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