How to Write a Business Plan for a Small Company in 2021
No matter what type of business you plan to start, a business plan is essential to get yourself organised. Writing a business plan for a small company requires as many details as a larger enterprise, and will be just as useful for potential investors and lenders as it will be for you.
This may be all-new territory for you if going into business for the first time. How do you go about writing a business plan that gives all the info investors require? The key is outlining how your business is structured, not just including how it runs and grows.
Take a look at our detailed guide on the plan writing process.
Take as Much Time as Needed to Do Research
Your first step in writing a business plan is to create an executive summary at the top of the page. This gives a rundown of what type of business you have, plus the basics of what your mission statement is.
All of that needs a decent amount of research to provide a well-rounded view of what you’re starting.
You’re better off taking as much time as you need to research your plan, including the executive summary. The more granular information you provide in the opening summary, the more an investor or lender becomes willing to take a chance in offering you funding. It’s why many people creating business plans write the executive summary last.
Proof of Marketability
Below your executive summary, add a description of how marketable your business really is. Writing this may take some more time because it also involves considerable market research on the viability of you competing in the marketplace.
Be sure to list your target market here in addition to what the outlook is for the type of company you’re starting. A source like IBIS World is a great resource to extract from to see how your chosen industry performs on a global scale.
Most importantly, list what your competitors do to stay successful. Then indicate what you plan to do better to keep your business above your competitors.
Other things to list here include your operational strategy, your planned location, what type of inventory you’ll have, plus which supplier you intend to use.
Describe the Benefits of Your Products or Service
You can consider this an extension of the above marketability angle. The difference is you hone in here on the products or services you’re providing. What makes them stand out from everyone else doing the same?
List the benefits your service or products offer to your targeted customer base. Also consider writing an analysis of what your product lifecycle looks like. Can it last for years to keep your company sales sustained?
Some of your products may need copyrights or trademarks. You’ll need to share this information in the business plan if you need investors. Trade secrets are important to protect, so list how you plan to protect them.
In the chance you have numerous trade secrets listed in your plan, explicitly indicate you want the readers to keep certain things private.
Indicate How Much Funding You’ll Need
At least a quarter of your business plan is intended to persuade investors to invest in your business. Create a funding request section next that explains how much funding you need over a projected time period. What is the length of time you’ll need that money? Most typical is about five years.
Explain further how you intend to use the money. Once again, this is going to take vast amounts of research to funnel the money into the right places. Also decide whether you want equity in your funding.
Take special care in indicating where you plan to use the investor money. It’ll give a more encompassing picture to possible investors on how successful your investment becomes.
To finish out this section, create an outline of where the money specifically goes. Maybe you only need it to help pay employee salaries for a few years until you start turning a profit.
The Financial Picture in Coming Years
Do you have a realistic timeline set to indicate where your business should be financially in a few years? Thanks to analytic tools available today, you can input everything you know about your upcoming business and get a mostly accurate answer.
Despite no small company really knowing what the future holds, you should do your best to give a clear indication of where you plan to be financially within at least the fifth year of operation. Provide a general forecast outline for your projected cash flow and capital expenditures.
Providing information on your estimated first year is most important, including a monthly analysis in any type of chart or graph you can create.
An Appendix with Supporting Documents
Additional details about yourself and your business can go in the end appendix section. Things like information on your credit history, legal documents, or licenses/permits you need can go here. Don’t bog down important sections above with exorbitant details that give less clarity on the topic subject.
To discover how you can keep your business on the path to success, we invite you to contact us at Nationwide Super. We call ourselves the ‘Small Business Super Business’ because we’re here to look after the superannuation needs of millions of people, just like you, who work in, and run small businesses right around Australia.