How To Make a Business Plan for Small Businesses

Developing an engaging, comprehensive small business plan should be one of your top priorities if you’re considering launching or scaling a small business. A small business plan serves as a roadmap for your company and outlines strategic business goals, as well as strategies and tactics to achieve objectives.

An effective small business plan can help your organization stay accountable to reaching key milestones, while also offering insight into your overall business operations for investors, board members, lenders, team members, and other stakeholders.  

The number of small businesses in the U.S. is on the rise, with a record 5.4 million new business applications filed in 2021, according to the U.S. Census Bureau. Additionally, data from the World Bank shows that 90% of businesses worldwide are small and medium-sized enterprises (SMEs). However, research from the Bureau of Labor Statistics found that only about half of small businesses reach the five year mark. By developing and implementing a succinct small business plan, you can have a proactive strategy in place to drive long-term business success.

This guide will walk you through key elements to take into consideration as you navigate how to write a small business plan.

Elements of a successful small business plan:

1. Executive summary

2. Company description

3. List of products and services

4. Target audience and market

5. Competitive analysis

6. Sales and marketing strategy

7. Operations

8. Financial plan

Related: How To Write a Business Plan for Your Company

1. Executive summary

The executive summary is one of the most important sections of any business plan. While it appears at the beginning of the plan and provides stakeholders with a high-level overview of your business, the executive summary is often the last part to be finalized. This is because the executive summary includes the most important highlights from the rest of the business plan.

An engaging executive summary includes:

• A compelling introduction that highlights the need for your products or services
• Industry research and trends to validate the business opportunity
• Company mission, vision, and values
• The legal business structure such as sole proprietorship, limited liability company (LLC), or partnership
• Projected business outcomes  
• An overview of requirements for growth including but not limited to funding, team members, and supplies
• A call to action such as a request for financial support or guidance  
• A high-level breakdown of what to expect in the rest of the plan

Related: How To Write an Executive Summary Successfully

2. Company description

While the executive summary touches on your company description, prospective investors and other interested parties will want to know more about the specifics of your business.

The company description goes into more depth about key details related to your small business, including:

• The registered business name
• A brief history of the business
• The physical address (if applicable) and contact information
• Website and social media page links
• Names and bios for top executives or leaders at the company
• The business model including whether you sell to a business-to-business (B2B) or consumer audience, as well as whether the mode

3. List of products and services

Once you’ve provided more insight into your general business background, the next step involves sharing details about the products and services your small business offers. This information helps emphasize how your business will generate revenue and meet customer needs.

As you list products and services, explain the following:

• How your products or services work and differ from competitors’
• Key challenges your offerings solve for customers
• Packaging or design details
• Product research, development, and distribution plans, including whether you manufacture your own products or buy from wholesalers
• Pricing strategy, including any pricing tiers and whether your business offers one-time purchases or a subscription-based plan

In addition to highlighting your current products and services, also outline opportunities to expand or evolve your product and service offerings in the future. A clear explanation of both current and future solutions can help stakeholders understand your long-term vision.

4. Target audience and market

Determining the right target audience and market is key to long-term success for any small business. Many companies cast a wide net to capture as many sales as possible, rather than identifying a focused target audience and market. Maintaining a specific focus area can better position your business to stand out as an expert on a specific solution, market, or industry.

When outlining your ideal target audience and market, consider the specific problems your products or services address, along with which consumers or business buyers would be the best fit.

As you build out the target audience and market section of your small business plan, consider highlighting:

• Market research based on publicly available data, customer interviews, surveys, and focus groups
• Top challenges and pain points your target audience and market faces
• Demographic indicators such as age, gender, race, education, location, and occupation
• Psychographic data points, including activities, interests, values, behaviors, and opinions  
• Detailed buyer personas incorporating data from the points above

Related: How To Identify Your Target Audience

5. Competitive analysis

Gaining in-depth knowledge on the competitive landscape is critical as you develop your small business plan. This can help show that your small business offerings stand out from the competition and illustrate that the market isn’t already overly saturated with similar products or services.

Some steps you can take to develop an in-depth competitive analysis include:

• Identifying top competitors
• Assessing competitors’ online presence
• Understanding competitors’ market share
• Reading online reviews
• Reaching out to competitors’ customers for qualitative feedback
• Completing a SWOT analysis for each competitor and your company to understand where your small business stands compared to the competition—and how your business can capture market share

Related: How To Do a Competitive Analysis for Your Business

6. Sales and marketing strategy

With an understanding of the competition and a focused target audience in mind, a next step is outlining how your small business intends to reach and engage prospects and customers.

Common criteria of a strong sales and marketing strategy include:

• Sales and marketing goals that align with overall business objectives
• Key value propositions and concise messaging to communicate competitive advantages
• An overview of planned sales and marketing campaigns and activities
• A process or strategy to engage and retain existing customers
• Sales channels including physical stores, company website, mobile apps, and sales representatives  
• Marketing channels such as company website, social media, email, video, and online advertising
• Sales and marketing technology to optimize the strategy including email marketing software, analytics tools, and customer relationship management systems
• Estimated investment in channels and technology, along with projected ROI for each

A small business owner often oversees all aspects of the business and not all business leaders necessarily have a background in marketing. Consider engaging an independent marketing professional to provide expert consultation for the sales and marketing strategy portion of your small business plan.

7. Operations

The operations section of a small business plan offers a detailed description of day-to-day business activities and how they will contribute to achieving the goals and objectives highlighted in other sections of the plan. This section includes business processes, a personnel overview, and responsibilities of various team members.

Information to feature in the operations section of your small business plan includes:

• Overview of required facilities, office space, equipment, and supplies, if applicable  
• Organizational chart highlighting staffing needs and worker responsibilities
• Inventory of benefits and other personnel-related investments
• Legal requirements, including but not limited to licenses or permits, trademarks, insurance, and employment regulations
• Key performance indicators (KPIs) to measure overall business health  
• Process or technology to measure KPIs

8. Financial plan

A successful small business plan provides transparent insight into financial goals, needs, and planning. The financial section of a small business plan typically includes financial projections and any necessary funding requests.

Clear financial projections show potential investors and other stakeholders that the business is likely to drive positive financial results and the plan should include both short- and long-term goals. For example, a financial plan often highlights five year revenue and budget goals as long-term objectives, along with yearly and quarterly goals to showcase how the business aims to stay on track.

In the financial section of your small business plan, charts, graphs, and other visuals can help make the content more engaging and bring your financial story to life.  

An effective financial plan includes, but is not limited to, projections on the following:

• Budgets
• Cash flow statements
• Income statements
• Balance sheets
• Funding requests or requirements
• An overview of how funding would be used
• Strategic financial goals, such as paying off debt, expanding product or service offerings, acquiring other businesses, or selling your small business

Keep in mind, financial plans evolve from over time and leaving room for flexibility as customer needs or economic conditions shift is important. Consider including a brief note in your small business plan to set this expectation—and have a process in place to reassess financial priorities if necessary.

Get a business plan the easy way

Whether you’re a first time small business owner or have experience launching several companies, creating and implementing a concrete small business plan can provide a step-by-step blueprint to accomplish strategic goals.

Rather than developing a small business plan on your own, consider partnering with an outside expert to make the plan as effective as possible. Independent professionals with business planning expertise can approach the plan with a fresh, outside perspective and apply lessons they’ve learned from prior experience.

Independent business planning professionals are available on Upwork through Project Catalog™ to help you create an impactful small business plan. Search and select from a wide range of one-on-one consultations or fixed-priced projects that align with your specific business needs and budget. Get started—browse available business planning experts today.