A business plan for a small business is a working document that helps you test your idea on paper before you spend real money on it.
Why write a business plan for a small business
A plan makes you answer hard questions early: who will buy, why, at what price, and how you will reach them. Lenders and partners may also ask for one. This article is general information, not financial advice. The SBA guide to planning your business offers free templates and examples.
- Tests your idea on paper
- Helps with lenders and partners
- Keeps you focused
What goes in a business plan for a small business
Most plans cover a short summary, a description of the business, the market and customers, competitors, how you will sell and promote, who runs it, and the numbers. Keep each part short and honest. A clear plan of a few pages beats a thick one nobody reads.
- Summary and business description
- Customers, market and competitors
- Sales approach and management
The numbers in a business plan for a small business
Estimate startup costs, monthly expenses and how long until you expect to break even. Use realistic assumptions and show your reasoning. Our guide on business funding options explains how funding fits, and our guide on bookkeeping basics helps you track the real numbers once you start. Do not include income promises you cannot support.
- Startup costs
- Monthly expenses
- Break-even estimate
Keep it simple and update it
A one-page plan can be enough to begin. Review it every few months and change it when facts change. Compare your plan with your results, and note what you learned. Free mentors at SCORE can read it with you.
- Start with a one-page version
- Review on a schedule
- Compare plan with results
Use the plan to check an opportunity
If you are considering a franchise or business opportunity, test the seller’s claims against your own plan. Our guide on how to evaluate a business opportunity lists the questions to ask, and our guide to which business opportunity is right for you helps with fit.
- Test claims against your numbers
- Ask for written details
- Compare more than one option
Where to get free help
Local SBDCs and SCORE offer free advice on plans, and the SBA has a guide to launching your business. A plan takes a few hours but can save months of wasted effort.
- SBA templates
- SBDC and SCORE advisors
- A mentor to review it
Related reading for new owners
- Business Funding Options: A Plain-English Guide for New Owners
- Bookkeeping Basics for Small Business Owners
- How to Evaluate Any Business Opportunity Before You Invest
- Which Business Opportunity Is Right for Me?
- Legal Basics for Starting a Business: A Checklist
- Start a Business Now or Wait? How to Decide
- SBA guide to planning your business
- SBA guide to launching your business
- America’s SBDC small business advising
- SCORE free business mentoring
