Write a Small Business Plan in Three Steps

As a startup, one of the most important things you can do is write a small business plan. Why?
Think of it as a roadmap that takes your business from an idea to a fully operational venture. So, it’s important to include key details.

Define your company’s mission.

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. Simply put, what will you 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.

What should a business plan look like?

Your small business plan doesn't have to be a 100-page document that takes months to complete. In fact, a simple one-page 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, there are key components of a business plan that owners should always include.

• Executive summary
• Company description
• Target audience
• Products and services
• Operational processes
• Marketing tactics
• Market analysis
• Financial projections

Time spent writing a small business plan is well invested. It helps others understand your vision and how you will bring it to life.

Small business planning doesn’t have to be hard.

Writing a small business plan may seem daunting. However, 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. Three steps will help you create an effective strategy.

1. Research the market.

   You have a good idea for a new business, but will it be successful? Research potential customers, established businesses in the industry and their products and services.
   • Who is your target audience?
     Your target audience is the people who are most likely to buy 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 you will sell to will make your marketing plan more effective.
   
   
   • Are there competitors in the market?
     Make a list of companies — both large and small — that you'll be competing 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.
   
   
   • What is your marketing plan?
     Identifying potential customers and methods other companies use to attract them is valuable in creating a marketing plan. 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.
   
   Marketing plans will evolve as your company grows. Evaluate what's working well and fine tune your efforts as needs change.

2. Write a company description.

   In a small business plan, the company description typically appears after the executive summary and before market analysis findings. However, it’s important to conduct research before writing the plan since analysis may reveal necessary adjustments to your business model.
   
   When writing your company’s description include the following elements.
   • 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 problem(s) 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’?
   
   
   • Company structure
     Will your business operate as a sole proprietorship, partnership, limited liability company or corporation? If you begin as a sole proprietorship, it’s not necessary to include company 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.

3. Perform a financial analysis.

   Calculating expenses and revenue potential, and setting a realistic budget is critical to your business’ success. According to the Small Business Administration (SBA), low sales and cash flow issues are the main reason businesses fail. You’ll want to conduct a financial analysis, carefully examining factors that will impact profitability.
   • Startup costs
     Opening a small business can be expensive. Expenses may include permits, equipment or inventory, as well as travel costs. 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.
   
   
   • Revenue streams
     Evaluate your business’ potential income. Consider multiple revenue streams so that you’re not dependent on one source of income. 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. Always set aside emergency funds and savings for future needs.
   
   
   • Sales goals
     Determine pricing for your products and services, as well as how many units or hours you’ll need to sell to break even or make a profit. These figures are important for monthly budgeting and future planning. Lenders will also use this information when making credit decisions.
   
   

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.