In the US, making a formal business plan is very important for the long-term success of small businesses. According to the U.S. Bureau of Labor Statistics, about 79.6% of new businesses make it through their first year. However, only about 50.6% are still in business after five years, and only about 34.7% are still in business after ten years. This shows how survival rates drop quickly over time without a plan and supervision.
Small businesses make up 99.9% of all businesses in the U.S., which shows how important they are to the economy and how important it is to plan for the health of the national economy. Studies show that businesses that do a lot of planning, especially when they write down their predictions for market demand, cash flow, and competitive positioning, are more likely to be able to get financing, stay strong, and grow than those that don't have written plans. These numbers show how good planning can help lower the risks that come with market volatility, funding problems, and early closure.
You can get expert business plan writing services to write a small business plan. The cost of writing a small business plan ranges from $499. A business plan writer will follow the steps described above and can also create a simple business plan for a small business.
What is a small business plan?
A small business plan is a simplified business plan that has a simple structure and outline of the goals and objectives of the business and the strategy to achieve them. It is mainly used by small scale businesses to communicate their future strategy. A small business plan is custom made for your particular business according to its target market and structure.
The plan enables a small business to present their business ideas to investors who help with loans and startup capital. Small businesses are able to organize their resources, operations, and actions to help them evaluate their potential.
Components of a small business plan include an executive summary, company description, market analysis, competitive analysis, management and organization of the business, description of products and services, marketing plan, funding request, financials, and the appendix.
How to create a small business plan: Steps
Creating a small business plan is a step-by-step process to ensure that you develop a comprehensive small business plan. Business plan writing is not a one-time task but is an ongoing process. You need to be descriptive but concise at the same time.
According to the World Bank, 90% of the world’s businesses are small-sized enterprises. Only about half of these reach the five-year mark. Therefore, crafting and implementing a concise small business plan is a strategy promoting long-term business success.
Creating a business plan puts emphasis on the overall business purpose. Begin with having a firm understanding of the reasons for setting up your small business before embarking on the small business plan creation. The following are steps in creating a small business plan.
1. Select the type of business plan to use
Since there are different types of business plans, the first step of writing a small business plan is to identify the type of business plan that you need. There are different types of business plans, such as startup, bank loan, strategic, nonprofit, internal, and business plans for immigration.
Other types of business plans that you can consider as an entrepreneur include a business plan for partnership, a marketing business plan, an SBA business plan, a profit business plan, a business plan for investors, a pre-seed and seed business plan, and a grant business plan.
Each type of business plan serves a unique purpose and addresses different aspects of the management and planning of your business. Choose a suitable type of business plan depending on your needs, goals, and level of your business.
2. Understand the structure of the business plan
The components of a business plan define the structure of your business plan. The structure of a business plan guides how a business plan should be written from start to finish. However, it may vary depending on the type of business plan.
Key elements of a business plan include an executive summary, company description, market analysis, competitive analysis, product and service description, description of management and organization, marketing plan, sales strategy, and financial projections, as well as a funding request.
The structure of a business plan is key for an effective business plan. It is important to have a logical and optimal business plan structure starting with the most crucial components and moving on to auxiliary elements.
3. Write your business plan using the components of a business plan
The components of a business plan form its structure. A well-structured business plan makes a good impression on the reader to allow them to quickly flip through and find information about your business easily.
Proper business plan structure helps make your business ideas clear. A business plan outline guides the reader’s comprehension and strengthens the arguments contained therein. Components of a business plan help you determine the required steps to achieve goals.
Write a company description
The company description in a business plan includes key information about your business. This information for a business plan entails the registered business name, a brief business history, the physical address of the business, and contact information.
Other information to put in includes the website and social media pages that the business has. Indicate also the business model, whether it’s a business-to-business or a business-to-customer kind of model. Include the names of key people in your business as well as their backgrounds.
In the company description section, explain how your business stands out from competitors. Elaborate on what problems your business solves and how it offers solutions to consumers. Break down the strengths of your business.
Write the market analysis
Market analysis in a business plan shows that you have a good understanding of the ins and outs of your industry. This section identifies the specific market that you want to enter. Choosing the right market gives your business a head start to success.
Market analysis in a small business plan substantiates the strengths indicated in the company description with data and statistics that show industry trends. It helps you visualize your customers, their spending habits, and what products and services they need.
Market analysis shows what other businesses are doing and which areas they are succeeding in, as well as their areas of failure. You get information about how your business can take advantage of unexpected market changes.
Describe your organizational and management structure
Management and organizational structure in a business plan outline how your business is set up. For a small business plan, summarize the skills and primary responsibilities of managers. Highlight briefly the experiences of each key team member.
By highlighting the skills and experiences, you are making a case for why your team is most suitable to turn your business idea into a reality. Potential investors not only want to see great ideas but also great teams.
Indicate also your current business structure. Is your business operating as a sole proprietorship, partnership, or company? Provide an overview of the ownership structure, such as equal or divided ownership.
Describe your product or service
Products and service components in a business plan describe exactly what you are selling. Describe the unique features, specifications, and value of your products and services. In a small business plan, fully describe how your products and services meet the existing demand.
In this section, you could also indicate how long your products last, how much it costs to make your product, the retail price, your suppliers, and information regarding patents and copyrights, as well as the marketing and sale distribution plan that your business has.
Your product and service description can also be called a problem and solution statement. This is important because it demonstrates how your products and services address a specific problem for your target market. You, therefore, have to first identify the problem that exists among your customers.
Define your marketing and sales plan
Marketing and sales in a business plan cover how you will position your product and service in the market. Indicate the marketing channels to be used. For a small business, these channels could be local advertisements, storefronts, or retail distributors.
A marketing and sales plan explains how your business fits in the market and how you will convey information about the advantages of your products and services. Information from the competitive analysis helps you position your business in the market.
A sales plan describes the process of sale from when a customer expresses interest in your product or service to when they actually make the purchase. In a small business plan, a sales plan shows how you close business deals.
Explain your funding request
A funding request in a business plan is an outline of your business’ funding needs. It is a proposal to obtain financial support from potential investors or lenders. Types of funding include loans, equity, and grants. Be specific on what type of funding your business needs.
Explain how you plan to use the capital that you are going to raise. Include also a timeline for additional funding that you will need to complete other business projects. When writing your request for funding, describe the future financial strategic plan of your business.
In a small business plan, a funding request should be accompanied by a summary of your business. Show its current financial situation, such as assets and liabilities. Include also the financial projections, such as the future cash flow outlook.
Write the executive summary
An executive summary in a business plan is a summary of its content. It is the first item of the business plan that a stakeholder or investor will read. In a small business plan, an executive summary should be ideally one page long.
An executive summary is normally written last because it is an overview of your entire business plan. In fact, it can act as a standalone document, and investors could ask for it only instead of your complete business plan when evaluating your business.
The executive summary in a small business plan is short but informative, clearly communicating the name of your business, your business idea, your mission statement, the products and services that you offer, and your plans for growth.
4. Read and Revise the Business Plan Draft
A business plan draft is subject to continuous development. You need to revise and update your business plan as a small business grows or gains new partners. This is so as to display new goals, strategies, and financial plans.
It is also not a good idea to write a business plan in a vacuum. Have someone else read it to ensure that it is easy to understand and read. A second look at your business plan helps you spot errors and enables you to address them promptly.
A business plan can change over time due to changes in operations and markets. Keeping it updated makes investors build trust and confidence in your business. This is because you send a message that you are attentive to details of upcoming events happening in your industry.
Can you hire a professional business plan writer to write a small business plan?
Yes. You can hire business planning experts who offer business plan writing services for all types of businesses. Small and large companies need business plan consultants to develop strategic goals and define how to achieve them.
The secret ingredient to business success is a well-written business plan. Hiring a professional business plan writer is the best decision that any entrepreneur can make. This is because they ensure that your business plan contains all necessary components to make it stand out.
A professional business plan writer helps you organize your thoughts, effectively clarifying your business goals. They bring a wealth of experience and expertise, therefore creating comprehensive small business plans.
How much does a small business plan cost?
A small business plan costs between $499 and $999. The price of writing a small business plan is cheap because small business plans are not complex in nature. Hence, it can be written by less experienced writers.
Less experienced writers charge a lower price than highly experienced business plan writers. A small business plan is a short document; hence, it will cost less than longer business plans. The cost of writing a small business plan is also influenced by the size of a business.
Small business plans for small businesses are cheap to write. This is because a small business may not have a lot of resources to spend on business plan writing services. In addition, they are a simplified version of a business plan.
What are the steps for writing a business plan?
There are specific steps that define how you write a comprehensive business plan. These steps include writing an executive summary, which is a highlight of a business plan’s content, and writing the company description, which is a snapshot of what your business is about.
Another step is defining your business goals, both short-term and long-term, and then explaining your products and services by defining how they solve a problem in the market as well as outlining the management and organizational structure, which highlights how your business is organized.
Other steps include conducting market research and analysis, conducting a competitive analysis, describing your sales and marketing strategy, conducting financial analysis and forecasting, defining your recommendations, and writing the appendix and funding request.
Is there a simple business plan for a small business?
Yes, there is a simple business plan for a small business. Small businesses use business plans to guide them as their business progresses. The stage of your business and the target audience dictate the level of detail that your business plan needs.
While large corporations need a thorough business plan, small businesses require a concise business plan focusing on their financials and strategy. Simple business plans are streamlined and lightweight; hence, they take less work to craft.
Does a startup need a small business plan?
Yes, as a common type of business plan, it needs a small business plan. Startups can use a small business plan to relay crucial information. This is because a small business plan summarizes critical points for each section of a business plan.
A successful small business plan for a startup summarizes its three- to five-year goals along with its yearly and quarterly goals. These goals showcase how the business aims to stay on track. A startup’s business goals are related to different objectives, such as revenue.