How To Write A Business Plan For Your Small Business

Starting a business can be an exciting step for any entrepreneur. But there’s more to getting started than choosing a name and designing a logo. Starting a small business requires strategic thinking and planning to ensure you’re setting yourself — and your business — up for success.

Enter: the business plan. If you’re starting a new business or looking to grow your existing one, writing a business plan is a crucial step in the process. But how does one begin writing a business plan and what makes a good one? We’re here to help.

What is a Business Plan?

A business plan is a document that outlines crucial elements of a successful business like your goals, strategies, and financial projections. It serves as a roadmap for your business, and it can help you make more informed decisions as you scale and grow. And anything that can help you better run your business is a no-brainer, right?

Why Write a Business Plan?

A business plan can be helpful for small business owners. But how, exactly? 

Helps To Set Goals and Stay Focused

Writing a plan can force you to think critically about your business, which may not be the first task on your list. But by sitting down and writing your business plan, you can identify target markets, industry competition, unique selling propositions, and set realistic goals. And when you set specific and measurable goals, it’s easier to stay focused and track progress.

Attracts Investors and Secures Funding

Did you know that developing a comprehensive business plan can tell you a lot about your business? This includes how much funding you may need and how you’ll use it. Whether you’re seeking funding from investors or applying for a small business loan, a well-written business plan can help you make a strong case. It can also show potential investors that you have a clear understanding of your business and a solid plan for success.

Identifies Potential Problems and Solutions

When thinking critically about your business, it’s important to not solely focus on ways you’ll succeed. It’s important to consider the risks, too. By identifying possible problems early on, you have the opportunity to develop strategies to mitigate them. Thinking this through and including those strategies in your business plan also shows investors that you’ve got a contingency plan (just in case).

Helps You Make Informed Decisions

A fully developed business plan should also focus on a market deep dive, your competition, and financial projections. By expanding beyond the basics, you’ll have a roadmap to better make strategic decisions that will benefit your business in the long run.

How to Write a Business Plan

Now that we’ve established why it’s important for business owners to write a business plan, it’s time to outline just how a business plan is written. 

Executive Summary

The executive summary provides an overview of your business, including your mission statement, products or services, target market, and financial projections. It may be easier to speak to these crucial points after you’ve finalized your plan, so skip writing the executive summary first. When you’re ready to write it, make sure to keep it concise and compelling so as to grab the reader’s attention and inspire confidence,

Company Description

The company description section is a great place to start writing. It provides a detailed overview of your business, so it should include things like your business name, location, company structure, and history. Highlight your unique point of view as a business as well as how you’ll stand out from the competition and be profitable. Speak up and add some personality, it’s important to convey what makes your business special.

Market Analysis

That market research you’ve done will come in handy for the market analysis section of your business plan. This section should include your analysis of your target market, your competition’s strengths and weaknesses, and relevant industry trends. When outlining your target market, make sure to include detailed descriptions of demographics, psychographics, and buying behavior. These details can help you determine ways to differentiate your business and attract customers.

Organization and Management

The organization and management section outlines your business’s organizational structure and  responsibilities of the management team. Don’t forget to plan ahead — you’ll also want to highlight any gaps in your team and how you plan to fill them.

Products and Services

In this section, you’ll provide a detailed description of your products and/or services. This part of your plan should explain exactly how your products and/or services meet the needs of your target market, as well as how they differ from those of your competitors. If you have any patents, trademarks, or copyrights (or if you plan to obtain them) you should also include those details in this section.

Marketing and Sales Strategies

Here, you will explain how you plan to reach your target market and the ways you’ll promote your products or services. Include details such as your pricing strategy, sales projections, and marketing plans. If you’ve developed any partnerships or collaborations to help you reach your target market, make sure those are highlighted here as well.

Financial Projections

While each part of your business plan has value, the financial projections section is one of the most important parts. It includes your income statement, balance sheet, and cash flow statement — all things potential investors will want to see. They also may want to see a break-even analysis. When compiling your financial projections, make sure it’s based on thorough research and realistic projections.

Appendix

There may be information that doesn’t fit neatly into one of the above sections. Here, you can include information that may be relevant, such as the resumes of key team members, or related legal documents. Keep in mind that the appendix is supplemental and should never be too lengthy.

Tips for Writing a Business Plan

You’re almost ready to start writing your business plan! But we’ve got a few more tips to share to make the process even easier..

Keep It Brief 

Remember to keep your business plan concise and professional. Have your audience in mind and avoid using slang or technical terms that might be difficult for readers to understand. Avoid relying on long paragraphs, instead  use bullet points and headings to make it easier to read and navigate.

Be Realistic

While it’s important to be optimistic about your business, it’s just as important to be realistic. The financial projections you include in your business plan should be based on realistic assumptions. Investors will be more likely to trust a business plan that’s based on realistic projections.

Get Feedback

Before finalizing your business plan, it can be helpful to get feedback from others. Be it from friends, family, or business mentors, feedback can provide valuable insights and help identify gaps or areas for improvement. If you’re looking for tailored feedback, you may want to hire a professional business plan writer to review and provide feedback.

Writing a business plan is an essential step for any business owner. By taking this step, you can position yourself to set specific goals, attract investors, and make more informed decisions for your business. 

How Justworks Helps Startups & New Small Businesses

Are you in the first steps of writing your business plan or are you looking to kick your business into high gear? No matter where you are in your business journey, Justworks is here to help.

With Justworks, you can have payroll, compliance, and HR all in one platform, as well as access to benefits through the group buying power of the PEO. It's all backed by a full-service support team that’s available 24/7 to help your business succeed, whenever and wherever. To learn more about Justworks, get started today.