How to Write a Small Business Plan in Six Steps

Do you have a great business idea but you’re unsure what to do next?

You’re unlikely to have all the specifics when you’re initially thinking of starting a business. But it's important to define your company’s mission and goals. However, small business planning doesn’t have to be complicated. Simply put, you’re answering the question of what you will sell and to whom.

Understanding the fundamental purpose of your company will guide you in developing a small business plan that helps accomplish your goals. Think of this plan as a roadmap that takes your business from an idea to a fully operational venture.

The small business plan effectively communicates your vision and helps to attract investors.

As an entrepreneur, one of the most important things you can do is write a business plan. The small business plan acts as a comprehensive guide to launch and grow your company. The document clearly outlines your business goals, strategies and operational details, providing step-by-step guidelines.

The business plan communicates your vision and objectives. A well-crafted version helps attract investors and stakeholders, increasing your chances of securing funding and support. As your company evolves, your small business plan continues to guide decision-making, ensuring you stay focused on growth and competitive advantage.

A business plan should include strategic details.

Your business plan doesn't have to be a 100-page document that takes months to complete. In fact, a simple one-page small business plan template could be useful. However, if you intend to raise capital, lenders and investors will want a more detailed, traditional document.

No matter which style you choose, including key elements of your purpose and objectives makes your small business plan even more effective for both internal direction and external communication.

Asking preliminary questions will reveal critical details about your industry, competitors and available opportunities. These insights are essential to defining what your business approach should be. This six-step small business plan template will help define and document an effective strategy.

1. Describe the target audience.

   The target audience is the group of people most likely to purchase your products or services. For example, if you're starting a landscaping business, potential customers might be residential homeowners with yards. Or you may be interested in working with residential developers. Clearly defining who your potential customers are will make your marketing plan more effective.

2. Conduct comprehensive market research.

   You’ll need to understand the marketplace to determine if your business will be successful. Research potential customers, as well as established businesses in the industry and their products and services.

3. Determine products and services, as well as pricing.

   Include brief descriptions of the products or services you plan to offer. Also include pricing, distribution strategy and sales projections. Compare your products or services to others in the market to demonstrate its unique advantages. You might also discover additional markets and potential customers who would be interested in what you have to offer.
   
   When determining pricing, include how many units or hours you’ll need to sell to break even or make a profit. These figures are important for budgeting and future planning. Lenders will also use this information when making credit decisions.

4. Analyze competitors to reveal opportunities and challenges.

   Make a list of companies — both large and small — that you'll compete with for business. Successful businesses in the same area are positive signs that there's a market ready and willing to pay for your products and services.
   
   You can learn from these companies. What services do they offer? How do they reach customers? Understanding their tactics can help you determine what is unique about your own business, as well as what services and offers are attractive.
   
   A strengths, weaknesses, opportunities and threats (SWOT) analysis helps with market evaluation. Businesses can conduct these analyses to identify gaps in the market and the industry threats they face from competitors.

5. Write a compelling executive summary.

   An executive summary introduces investors, lenders or potential partners to your business plan. It highlights the most important details to spark interest in your company. The executive summary should make up 10% of the total business plan length. Among the details to include are a description of the business concept, company and management information, financial highlights and startup capital needs.
   • Create a detailed company profile.
     In a small business plan, the company description typically appears after the executive summary and before market analysis findings. It’s important to conduct market research before writing the plan since analysis may reveal necessary adjustments to your business model.
     
     When writing your company’s description, include a strong value proposition. This statement clearly defines why consumers would want your products or services. It answers questions that may have been addressed during market analysis, including:
     • ­What problems are you trying to solve for your target audience?
     • ­How will your products and services solve those problems?
     • ­Why are your products/services different or better than competitors’?
       
       
   • Describe your business type and structure.
     Decide whether the business will operate as a sole proprietorship, partnership, limited liability company (LLC) or corporation. If you begin as a sole proprietorship, it’s not necessary to include a business structure. If, however, you have partners or employees, you’ll want to document roles and responsibilities. Depending on the number of employees, you may also want to create an organizational chart representing the business hierarchy and reporting structure. Key management team members should have profiles demonstrating education, experience and skills. These details demonstrate the contributions each team member will make.
     
     
   • Provide revenue details.
     Evaluate your business’s income potential. Conduct a financial analysis, carefully examining factors that will impact profitability. Identify diverse revenue streams to ensure long-term financial stability. If you’re a graphic designer, for example, your main source of income might be individual projects. However, consulting or contracting with creative agencies could offer additional revenue opportunities.
     
     
   • Conduct a financial assessment to determine capital needs.
     Opening a small business can be expensive. Expenses may include permits, equipment or inventory, as well as travel costs, and may vary based on business type. Make a list of all your anticipated expenses. The SBA offers a worksheet to assist in estimating costs.1 If total estimated costs exceed your own investment, consider a small business loan. Also set aside emergency funds and savings for future needs.

6. Develop a marketing and sales strategy.

   A marketing plan details how you will attract and retain customers, as well as promote your products and services. Describe the marketing channels you plan to use and timelines, and set key performance indicators.
   
   A small business website is a must, as it introduces your company to the market and generates business, even if you aren’t selling online. Depending on your business, other tactics might include:
   • Networking at business and community events
   • Hosting booths at fairs and festivals
   • Online advertising and direct mail

If you need help with small business planning, just ask.

Starting your own business is exciting. You have great ideas and dreams for the future. But you may also have questions about small business planning. As an SBA-preferred lender, Synovus can give you sound advice and help fund your dreams. For more information, call 1-888-SYNOVUS (1-888-796-6887) or stop by one of our local branches.