A business plan can help set your service-based small business up for success. It can help secure funding, plan your next move, and improve your projections. But knowing how to create a business plan, what sections to include, and which additional resources to turn to can make all the difference. In this blog, I’m diving into what a business plan is and why every small business should have one.
What is a Business Plan?
A business plan is a written statement with a detailed description of your small business and an overview of upcoming plans and projections. Additionally, it details the financial aspect of setting up and running operations. A business plan can set your small business up for success by guiding you to where you are now and where you plan to go in the future. It can give you a roadmap of how to handle situations that haven’t happened yet but are likely. And it gives your business clout if you plan to pursue third-party startup or operational funding through bank loans or startup investors.
But business plans aren’t bookkeeping and accounting. As a small business owner, you’ll need to create bookkeeping and accounting processes and procedures that correlate alongside (but are outside of) your business plan. Additionally, you’ll want to plan accordingly for state and federal taxes, small business management, time management skills, and issues specific to your industry. These are just as important as a detailed business plan, but in keeping with this discussion, we’ll be focusing solely on business plans.
Why a Business Plan is Essential for Service-Based Small Businesses
Your small business is unique. It’s part of 99.9 percent of all U.S. businesses, according to the U.S. Small Business Association (SBA). And of all the new jobs created, 62 percent are for small businesses like yours. Moreover, small businesses put money back into local communities, just like how my business, Hilary Popham Website Design, supports my local community in Bend, Oregon. Additionally, it helps you learn which specific steps you’ll need to make your small business succeed while achieving short-term and long-term objectives. Read on for four tangible ways a business plan can set your small business apart.
It Helps You Secure Funding
Creating a business plan for your service-based small business adds clout. It gives you instant credibility by providing detailed information about your business’s market value, projected sales, and projected profit. Additionally, it provides your small business a reputation that will show investors you are serious and have the documents to prove it. In fact, some small business investors may need to see a business plan before proceeding to fund talks.
Even if your small business is based on cash-flow practices, having a business plan can still help secure funding by having emergency plans. The American Red Cross has an excellent emergency preparedness checklist for getting started. Each element of this checklist could be included in your small business plan and help you better prepare for a disaster.
It Helps You Plan Your Next Move
According to the Bureau of Labor Statistics, as reported by Fundera, 30 percent of small businesses fail by their second year. What’s more staggering is that by year five, about half of small businesses fail, and by the end of a decade, 70 percent fail.
A business plan helps you plan your next move and keeps your small business on track. And if you need to step aside from your small business, having an exit strategy will help ensure that you’re easily hitting final milestones.
It Helps You Improve Your Projections
Are you looking to improve your small business financial projections? Business plans are great resources because they include detailed statistics for your industry. In addition, they have a competitor analysis, which sheds light on industry benchmarks and includes financial statements and projections. Finally, by listing quarterly and yearly projections, you’ll have a clearer idea of your small business growth plan and service offerings.
How to Create Your Service-Based Small Business Plan
For service-based small business owners creating their first business plan, just thinking about building a massive brick of a document can be daunting. Which business plan components are essential for service-based small businesses can be hard to pinpoint and cost you and your business hours. That’s why I’m detailing the most common sections you’ll want to include in your service-based small business plan. Each of these sections could be as short as a few paragraphs or could be expanded into pages of subsections for more complex operations.
10 Sections Every Service-Based Small Business Plan Should Include:
- Introduction
- Executive summary
- Small business concept and description
- Management and operations
- Competitor analysis
- Services
- Marketing strategy
- Services selling prices and costs
- Financial statements and forecasts
- Exit strategy
5 Great Resources to Turn to While Writing Your Business Plan:
- Book: How to Write a Business Plan
- Resource Page: Write Your Business Plan SBA resource page
- Templates: Professional Services Business Plan Microsoft Office Template
- Article: 18 Best Sample Business Plans & Examples to Help You Write Your Own
- Templates: Top 10 Business-Plan Templates You Can Download for Free Article
