Small Business Plans

What is a small business plan?
A business plan is a detailed written summary of how a business or entrepreneur plans on organizing and then effectively running a small business so that it will stay afloat and be profitable. These are often required so an investor knows the plan is well-planned for and well thought out before investing money into it. Business plans include such points as how to obtain funding, management and staff information, experience, marketing, and financial information, such as pricing.

Why do I need a business plan?
There are a number of reasons you need a small business plan. Some of these include:

• Financing. When starting a small or home business, most banks or investors will require that you have a business plan. They want to see that you have seriously thought about starting a business and know all of the steps required to make it succeed before they loan you money for its start up.


• Feasibility. Starting a business requires a great deal of effort, money, and time. Having a documented, well thought-out plan will help you to see if your plan is actually feasible or not.


• Step by step guide. A well-thought out business plan will help you map out the steps you need to take in order to set up a profitable business.

Writing a business plan will also allow you to cover points you may not have though of.For example, some entrepreneurs might overlook the need to develop employee contracts. Or perhaps they neglected to factor certain things into the budget, like office supplies or insurance. Following a business plan will ensure that you cover all necessary items that could affect the success for your business.

How do I write a small business plan?
A small business plan should include a number of things that will help you map out your business. There are many resources available to assist you in developing an effective business plan and include books, websites, and software. The following points should be included in your business plan:

• Executive Summary. Generally, this is designed for those reading your business plan. If it's just for you, an executive summary may not even be necessary. If you opt to include an executive summary, it should explain the basic business model and the reasoning behind why this strategy will result in an effective business.


• Keys to Success. This section will include the tools your company will use to set itself apart from the competition and succeed in the industry.


• Company Summary. For a brand-new company, the company summary should include expected number of employees, projected location, etc.


• Services Provided. This is a basic run-down of what services your company will be providing to its customers.


• Market Analysis Summary. This section should include the industry, product and pricing strategy, promotion and distribution strategy, and production information.


• Management Summary. The management summary will contain the background information of key personnel, their business achievements, and experience in the industry.


• Financial Plan. A detailed financial plan is crucial. Included in this section is source of funds, existing loans and liabilities, a monthly cash-flow analysis, and projected sales and costs. This will help you see the real costs associated with your business and how much you can really expect to earn.

A small business plan is an important tool for starting a business.

More Small Business Info Articles:

• What you need to know about starting a small business
• Using your competition to your advantage
• Using the past to help the future
• Using social media to your advantage
• Understanding best practice
• Tips for small business owners
• The basics of writing a great business plan
• The basic requirements of running your own business
• Surviving in difficult times
• Staying in business for another year