How to write a small business plan

Small businesses need to have a business plan which is a strategic document that defines business goals and describes how to attain them. A small business plan is a simplified type of a business plan. It is essential to follow specific steps when writing a small business plan.

The steps include writing the company’s description, defining your business goals, explaining your products and services, outlining the management and company structure, conducting market research and analysis as well as describing your marketing and sales strategy.

You can hire a professional business plan writer to write a small business plan. The cost of writing a small business plan ranges from $499 to $999. 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 start up 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 start up, bank loan, strategic, non profit, internal, and business plan for immigration.

Other types of business plan that you can consider as an entrepreneur include a business plan for partnership, marketing business plan, SBA business plan, profit, business plan for investors, pre seed and seed business plan as well as 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, goal 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 the 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, financial projections as well as 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 helps you determine the required steps to achieve  goals.

Write Company description

Company description in a business plan includes key information about your business. This information for a business plan entails the business registered name, brief business history, physical address of the business and contact information.

Other information to put include website, 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 background.

In the company description section, explain how your business stands out from competitors. Elaborate what problem your business solves and how your business offers solutions to consumers. Breakdown 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 which 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, which areas they are succeeding 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 outlines 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 as a 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, retail price, your suppliers, 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 because you explain how your products and services solve a problem to the 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 covers 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 with positioning of 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

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 future cash flows 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 stand alone 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,  mission statement, 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 experience 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, 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 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, 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, then explaining your products and services by defining how they solve a problem in the market as well as outlining the management and organization 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 forecast, defining your recommendations, 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 dictates 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 light weight hence 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 start up summarizes its three to five year goals along 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.