Writing a Business Plan for a Small Business

Before you start any small business, a business plan is essential. Knowing how you plan to start up and run your small company is the first step to any successful business. Having a well-written plan for your small business will encourage growth as well as serve as a path to keep you motivated during the difficult spots.

Every business plan should include some key elements. The first step is to describe the business, next talk about how you plan to market your company. Explaining the financial structure and how the business will be managed is the second part of the business plan. These four sections make up the overall formation of your business plan. There is no specific set of steps that must be followed, but there are common elements that every business plan should have.

Within the first step of describing the business, be sure you talk about what type of company you will be starting and who your target audience is. Describe how you plan to market to your potential customers and also discuss your competition. Even if you think your business will blow all competition out of the water, you should talk about those companies. Talk about how they operate in comparison to how you plan to operate. The operating procedures of your company should be listed here as well. Explain how you plan to hire necessary personnel and include information about the business and employment insurance you plan to purchase.

Within the financial data section, you should discuss any loans for which you have applied for which you plan to apply. Discuss the equipment and supplies you will need to purchase and include your balance sheet, profit & loss statements and your break even analysis. A three-year financial summary is a great addition to the financial section that should be broken down by month for the first year and by quarters for the subsequent years. Be prepared to explain how you developed these reports and projections.

There are supporting documents you should include in your business plan. Tax returns for yourself and any other key players in the business going back at least three years. If you are starting a franchise business, you should include a copy of the franchise agreement. Lease agreements and all licenses and legal documents need to be added to this section. Your resume and those of all other principles need to be included and then if you have determined who your suppliers are going to be, letters of intent from them.

One of the main purposes of a business plan is to prove useful as a communication tool to show to potential lenders so that you can secure business loans and attract partners to your small business. Another purpose of a business plan is to assist you in tracking and evaluating how you are doing in staying focused on your goals. The business plan will be a continually updated document over the lifetime of the business as you learn and grow. You can use the business plan to gauge your actual accomplishments and make necessary modifications where needed. More business plan tips can be found at evolveyourbiz.com.