Writing a Business Plan: Tips from the SBA

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Good entrepreneurs know that the first step to turning a great idea into a thriving business is a solid, well-written business plan. It's a key tool for winning over investors and lenders in the early stages, and may even serve as a roadmap for navigating future obstacles.

The basic components of a business plan — summary, marketing plan, financial projections, etc. — may sound simple enough to create, but "simple" doesn't cut it for this critical document. Readers of your business plan will expect to see thorough, in-depth descriptions for each section, and you'll need to anticipate and be prepared for the slew of questions they may have about your company.

In an email interview with Business News Daily, Tameka Montgomery, associate administrator of the SBA's Office of Entrepreneurial Development, shared her thoughts on what entrepreneurs should know about writing a business plan.

Business News Daily: What are the most important qualities of a good business plan?

Tameka Montgomery: It's very important your business plan is thorough and well written, but you also want it to be clear on what you have to offer. Ask yourself: Beyond basic products or services, what are you really selling? Identify your niche. You don't want to become a jack-of-all trades and master of none, because this can have a negative impact on business growth. As a smaller business, it's often a better strategy to divide your products or services into manageable market niches. Small operations can then offer specialized goods and services that are attractive to a specific group of prospective buyers.

BND: What are some of the challenges new business owners face in creating their business plans?

T.M.: One of the big challenges for smaller businesses is actually building a business plan. What format should it take? What numbers should you pull together to demonstrate that you have a rock-solid financial foundation?

SBA has an online tool that can help: the Build a Business Plan online tool on the SBA.gov website. It provides a step-by-step guide to help new business owners through the process of creating a basic, downloadable business plan. The great thing about this tool is they can build a plan in smaller bites, save their progress and return at their leisure.

BND: Is there anything entrepreneurs often overlook when making a business plan?

T.M.: Entrepreneurs often overlook concrete, specific plans and sales forecasts. All businesses need to project sales because the plan versus actual impact of sales is the key to ongoing management in changing times. Your costs and expenses pivot on sales.

BND: Do you have any general tips for creating a good business plan?

T.M.: Business owners should reach out for help. SBA has an extensive network leveraged through our resource partners and available to small businesses nationwide. The resource partners include 950 small business development centers, more than 100 women's business centers, and 350 chapters of SCORE volunteers who provide training and counseling. Counseling is free, and training courses may have a small fee to cover costs through this strong network that provides management and technical assistance.

In addition, SBA's online training offers free courses and online tools to assist entrepreneurs with business management resources. We also work with other federal partners and local governments to bring resources to entrepreneurs.

We know that entrepreneurs who get good counseling and training stay in business longer, generate more revenue, and hire more employees to drive their growth.