An SBA business plan is imperative because it offers a framework for strategically conducting your company's operations. Taking the time to research and put together the different aspects of a business plan forces you to focus on aspects of your business activities that you might otherwise have overlooked.
Reviewing and evaluating each business plan section using an approved SBA business plan template can provide answers to questions you didn't know you had to ask. For example, entrepreneurs who take the time to create a business plan are 16% more likely to succeed than their counterparts who don't put in the effort.
Small businesses looking for funding may discover that SBA lenders require presenting a business plan with their SBA loan application, especially for SBA 7(a) loans. Lenders want to be certain that you have a workable plan for achievement. If properly recorded and prepared, your company strategy can offer that guarantee.
Components of the SBA Business Plan Template
Nine primary elements comprise an SBA Company Plan Template, which has the same structure as most conventional business plans. In addition, we've created a downloadable SBA Business Plan Checklist and Template to help you.
The main elements you need to include in your SBA business plan are the executive summary, business description, market analysis, organization and management, product or service offered, marketing and sales, funding request, financial projections, and additional information.
1. Executive Summary
An executive summary serves as your business plan's beginning. This executive summary should not exceed two pages. Aspects of your business that should be stated in the executive summary are:
- The introductory sentence introducing your company, purpose, and product
- A brief description of the business opportunity
- Your target market
- How your product or service meets market needs
- Your business model and who you are
- Market competition
- Your marketing and sales strategy
- Financial projections
- How you will implement your plan
Save the Executive Summary for Last: Although it serves as an introduction, it should be the last part of the business plan you write. Business and highlights key points for anyone reading the document.
Use only a few sentences to address each aspect of your business. You will explain them in more detail in the sections that follow the summary. This section of your SBA business plan is an opening overview that sets up the rest of your project.
2. Company Description
The business description is the part of your SBA business plan where you detail how your company's product or service solves a specific consumer problem, who your consumers are, and any competitive advantages your business has. Your business description should highlight the strengths of your business.
The main aspects of your business that should be covered in the business description are:
- What your business does
- The products or services offered by your company
- What consumer problem does your business solve?
- Who are your consumers
- What are your company's competitive advantages?
- The strategic partnerships you can have
Be specific when addressing these aspects of your business, and highlight the strengths of your business relative to its competitors. This portion of your SBA business plan provides the foundation of your company and lays the groundwork for the teams that will come after.
3. Market analysis
You will describe the market in which your business competes in the market study portion of your SBA business plan. This analysis tells your readers your overall understanding of the current market and where your business fits in that market.
The questions you need to address in the market analysis section are:
- What are rival businesses in your sector doing?
- What are your competitors' strengths?
- What are the competitors' weaknesses?
- Are there trends and themes in the market?
- Why do others succeed?
- Are you able to copy what your rivals are doing and outdo them?
- Do competing companies benefit from strategic factors like an accessible location?
In some industries, such as restaurants or retail, you should also indicate the number of direct competitors that offer similar products or services in your community. If there are no direct competitors, highlight this as a competitive advantage since your business will be unique in the community.
The market analysis aims to show the reader that you have researched the current market for your product or service. This section discusses the viability of your business in the current market, the importance of competition, and how you will position your business to succeed in the industry.
4. Organization and management
The organization and management section of your business plan is where you will describe your business structure. You will want to tell your business legal structure, organizational structure, and your business management team.
The two most important elements of this section are:
- Legal Structure: Describe the legal structure of your business. Will your business be set up as a general or limited partnership, limited liability company (SARL), or sole proprietorship, or will it be incorporated as a C (C-corp) or S (S-corp) corporation?
- Organizational chart: You must include a copy of your company's organizational chart. Your company's organizational chart shows your business's management and organizational structure, with job titles and the hierarchy of your management structure.
You'll also want to describe how your business's management team will contribute to its success. Showcase the achievements and experience of your management team. This information will help convince lenders that you're ready to run your business successfully.
5. Product or service offered
This section provides an overview of the product or service offered by your business. Aspects of your business that should be covered in this section of your business plan include:
- A description of the product or service you offer and its price.
- How the customer benefits
- Explanation of the life cycle of a product
- Procedures for handling intellectual property, copyrights, and patent filings
- Discussion of any research and development efforts
By providing additional information on how you plan to protect intellectual property, funders will have confidence that you have a plan to secure these intangibles for your business. Additionally, research and development efforts show that you continually evolve and improve your product or service.
6. Marketing and sales
Your business plan's marketing and sales portion will detail how you plan to attract customers and generate revenue. This section should include:
- Information on how you will market your products to your target customers.
- A description of the sales process
- Details of your marketing and sales budget
- Your sales and marketing goals
- A discussion of your pricing strategy as it relates to sales and marketing.
Along with outlining your sales and marketing goals, you should also discuss how hard you will go to achieve those goals. It's also worth considering how you will track the progress of plans for sales and marketing.
7. Funding request
One main reason business owners create an SBA business plan is to show lenders that they have a viable business. The funding application section of your SBA business plan should include details. following:
- The amount of financing you will need
- How the funding will be used
- The type of financing you are looking for
- Any future financial plans for your business
In addition to your current financial needs, you should also use this section to describe your future financial plans, including how you will repay your debts. It would help if you addressed both the repayment of existing debt and the refund of financing for which you make a request.
8. Financial projections
The financial projections section of your business plan is intended to convince potential financiers that your business is financially stable and should remain solvent. Information that should be addressed in this part of your business plan includes:
- Income statements for the last 3 to 5 years
- Balance sheets for the previous 3 to 5 years
- Cash flow statements for the past 3-5 years
- Any warranty available
- Financial projections for the next three years, including income statements, balance sheets, cash flow statements, and any budgeted capital expenditure.
Explain your projections: Along with your forecasts, explain how you obtained the information you are presenting and how these projections relate to your funding requests. Growth projections should be realistic, and if above normal market growth rates, they must be explained by additional context.
When projecting future financial performance, we recommend using monthly projections for the first two years and annual forecasts for the third year. You can use our SBA Loan Calculator if you intend to apply for a loan SBA 7(a). Consider SBA loan rates and guarantor fees when planning your payment amounts.
9. Additional information
The appendix to your SBA business plan is where you can include any additional documentation that may be relevant to your business or that meets specific lender requirements. This section may consist of documents such as your credit history: credit, owner's resumes, product photos, or letters of reference. The appendix is also the right place to include any legal documents, contracts, licenses, or permits related to your business.
There may be times when a lender asks you to provide additional information that is not usually part of a business plan or that you may not have included when writing your plan. If necessary, You can use the appendix. To contain any material that does not fit into one of the established parts.
Resources to Help Create an SBA Business Plan
There are several resources available to help you prepare your SBA business plan. These resources offer free or low-cost guidance to help with project preparation, plan review, and possibly connecting with local lenders.
- The SBA: The SBA website has a whole section devoted to business planning. The SBA offers a free online tool that will guide you through the process of creating a business plan.
- SCORE: SCORE offers mentorship, online resources, webinars, and local training events. You can choose to meet with a local mentor or take an online course on developing a business plan.
- Small Business Development Centers (SBDCs): The SBDC is another organization that offers counseling and educational events for small business owners. SBDCs are affiliated with colleges or economic development organizations across the country.
- Business plan software: One of the benefits of using business plan software, such as that offered by LivePlan, is that it guides you through the various steps of the process and provides a user-friendly interface. For formatting your business plan.
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