Writing A Business Plan:
Business Plans For Small Business

Business plans for small business come in a lot of forms and sizes.  Unlike business plans for large companies, the smaller company has lots of options.  

Sometimes the business plan is quite brief, with a discussion included.

Sometimes the business plan is a fully automated online presentation.

Basically, your lender needs two things in considering a business plan for small business:  

• a valid reason for granting the loan,
• and the reasonable expectation that it will be paid back.

All else is just commentary.

The Justification for the Small Business Loan

There are many reasons for needing a business loan, such as expansion capital, seasonal purchasing, need to pay off and consolidate more expensive loans, equipment purchase or lease.

The reason for asking for the loan is always a "good" reason. "Paying off overdue bills" is not a good reason. "Consolidating loans to save interest charges" is a good reason.

Few banks grant loans for "working capital". That "capital" has to be "working" to accomplish something. What is it truly going to accomplish? Increased advertising to generate new sales stream? Hire efficiency expert to cut down on manufacturing costs? Perhaps it will accomplish several things -- great! List them all.

Paying Back the Small Business Loan

How will this loan make the company better so that the loan can be paid back easily?

Will increased production bring more profits?

Will buying raw product in larger lots produce sufficient savings to pay off the loan?

Whatever it is, make it crystal clear in your presentation just how that will happen. Leave no room for doubt.

Information in the Business Plan for Small Business

With those two goals in mind, the actual presentation of business plans for small business can embrace any number of formats. Depending on how well you know the lender you may want to include:

• Biographical information on key people;
• Press releases or other promotional material;
• Financial summaries;
• Marketing plan outline;
• Brief narrative of background of the company; or
• Anything else that might impress the lender.

The Format of a Business Plan for Small Business

The format, too, is far more flexible than most business plan writers would have you believe. Having an "executive summary" with precisely 25 pages of backup information is highly overrated. Look at other options that might fit your business more, such as:

• Looseleaf binder with basic information;
• CD with links to your website, or a copy of it (in pdf format); or
• CD with a brief video of you and your key people in action;

How do you know what to present to your lender? Simple: ask.  

Sometimes banks are structured so that all lending decisions are made by a central committee, in which case you need to present more comprehensive information.  
Sometimes authority rests more with the local branch manager. If you have done business with this branch manager before, he may not need much to update your file.

Lenders always appreciate brevity. And honesty. Other than that, business plans for small business can take just about any form you want.

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