How to Compose a Small Business Plan

by David Carnes

No business can succeed without a business plan. Creating a business plan will not only force you to perform necessary research and clarify your goals, it will help attract the lenders and investors necessary for you to obtain financing for your business. A good business plan should include an executive summary, a description of your company, an explanation of its products, a market analysis, revenue and expense projections.

1. Gather and analyze all the information you will need to write your business plan. Create an outline that resembles a table of contents, with a paragraph of explanation covering each item. This outline is for your use only--it should not be included in the final version of the business plan.

2. Write a general description of the company that covers its goals and business philosophy, its products and services, and professional biographies of key personnel.

3. Explain in detail your company's products and services, how the company will manufacture and distribute them and who the company's main suppliers are. Include realistic cost estimates in this section.

4. Describe the market your company will enter. Be specific: if your company manufactures cell phones, talk about the cell phone market, not the electronics market. Describe the current state of the market as well as current trends. Identify major competitors and realistically assess their strengths and weaknesses.

5. Draft a marketing plan that includes sections on advertising, promotion and public relations. Estimate the costs for these initiatives as well as projected returns. If any of your company's products occupy market niches not currently occupied by competitors, explain how your company intends to take advantage of this.

6. Add a financial section that describes in numerical detail the current financial status of the company and includes conservative revenue and expense projections for the next two or three years of operation.

7. Draft a two-page executive summary that succinctly covers all of the above areas and relates them to each other. Although the executive summary should be written last, it should be placed at the beginning of the document.

Things Needed

  • Sample business plan
  • Company business records
  • Data about markets and competitors


  • The executive summary is the most important part of your business plan when it comes to attracting lenders and investors. If it is not comprehensive, concise, and clear, prospective lenders and investors are less likely to read the rest of your business plan.


  • Limit the length of your business plan to a few dozen pages, because most lenders and investors are not willing to read a 100-page business plan.

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