Huddle Up! It’s Time to Tackle Your Business Plan: A Step-By-Step Guide
Jonathan Dolphin
President, 21st Century Bank
Building a business plan is the mechanism aspiring entrepreneurs use to capitalize on their vision.
A well-executed business plan serves as an operational roadmap, guiding business owners through each stage of starting and growing an organization. It provides its leader with a strategic direction and keeps them focused on goals. Importantly, it helps you secure a Small Business Administration (SBA) loan.
Why Build A Business Plan?
Pro Football Hall of Fame quarterback Peyton Manning once said, “Pressure is something you feel when you don’t know what you’re doing.”
Before the ball is snapped, a quarterback needs to study the defense, understand the game plan and anticipate possible blitzes or breakdowns. The moment the play starts, there’s no time to second-guess – just execute with confidence.
This is what the process of developing a business plan does for an entrepreneur. It equips you with the knowledge, insight and strategy required to handle anything that happens on the field. This foundation helps you secure a victory.
Twin Cities Business Insights
In the June/July issue of Twin Cities Business, I shared information on the impact of a business plan from a lender’s point of view – comparing the groundwork laid in the plan to the extensive preparation required to queue up a winning season for the Twins.
Coach Kevin O’Connell spends money to build a winning team. The Vikings players dedicate thousands of hours to practice. The team studies its competitors. While you can make in-game switches to address poor performance – the advance preparation makes the most impact on the game.
What Is A Business Plan?
Whether you’re in the early stages of strategizing your business offerings and planning for potential challenges – or in the final stages of seeking to obtain a Small Business Administration (SBA) loan, a business plan helps you:
- Define your vision and mission
- Establish clear goals and objectives
- Identify challenges and risks
- Develop strategies for growth
- Secure funding and form partnerships
- Measure progress and make adjustments
Entrepreneurs often start with a really great idea – but without structure and a strategy in place, your idea may struggle to gain traction. A business plan ensures you stay focused on key priorities and have a clear path forward.
Steps to Developing a Business Plan
I always recommend you start general and vague with your business plan and add more detail with each iteration – this makes the process more manageable. Here’s what you need to make sure you include:
Executive Summary
This written executive summary provides a snapshot of your business, including your mission, product or service offerings, and high-level goals. It’s often the first thing lenders read, so make it as compelling as you can! The executive summary should be concise, yet powerful — giving readers a strong, high-level understanding of your business.
Business Description
Explain what your business does, the industry it operates in and what sets it apart. Define your target market and describe how your product or service fulfills a need. This section should showcase your competitive advantage and highlight opportunities that you’re uniquely positioned to seize.
Market Analysis
Research is key. Analyze your industry, competitors, and target audience. Understanding market trends and customer behavior helps position your business for success. Consider factors such as industry growth rates, consumer demand and emerging trends that could impact your business.
Organization and Management
Outline your business structure and introduce key team members. Highlight their experience and how they contribute to the company’s success. We want to see that your team has the skills and expertise necessary to execute your business plan effectively.
Products or Services
Describe what you’re offering in detail and summarize why it’s valuable to potential customers or clients. Address pricing, production and any unique features which set your business apart. Document how you plan to maintain a competitive advantage.
Marketing and Sales Strategy
Detail how you’ll attract and maintain customers by drafting your marketing tactics, sales approach and engagement strategies. Summarize how you intend to position your brand, reach your target audience and convert leads into loyal customers. Include both digital and traditional marketing strategies, social media outreach and networking efforts.
Operational Plan
This section outlines the day-to-day operations of your business, including your location, facilities, organizational chart, technology and processes. Describe supply chain management, vendor relationships and inventory control strategies.
Financial Projections
21st Century Bank and other Small Business Administration (SBA) lenders want to see realistic financial projections. Include income statements, a personal financial statement, cash flow projections and break-even analysis. Make sure your financial plan demonstrates sustainability and growth potential.
Projected revenue and expenses provide realistic estimates for the first few years of operation. I recommend you start with expenses and prepare your revenue projections from there.
Break-even analysis shows when your business is expected to become profitable.
Funding requests clearly define how much funding is required and how it will be allocated.
Download Our Checklist
To help you navigate the business plan writing process, we’ve put together a downloadable checklist to make it simpler. For next steps, explore the SBA’s sample business plans then download our checklist to get started on crafting a plan that sets you up for long-term success.
Obtain Feedback From Our Expert SBA Lenders
As a locally-owned and operated bank, we’re here to support community members throughout the Twin Cities on your entrepreneurial journeys.
Whether you need guidance on financial planning, securing a loan, or refining your business plan – we’re always ready to deliver you personalized advice and tailored products/services offerings. Whenever you’re ready, let’s talk.
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