December is National Write a Business Plan Month. The SBA encourages you to mark the occasion by learning how to put together an efficient, high-quality plan that will increase your chances of small business success in the year ahead.
You wouldn’t try to find a new destination without mapping the route first. By the same logic, you don’t want to start a business without a plan to guide your path. A business plan can help you navigate all the roadblocks that come with getting your business up and running.
Which Type of Business Plan Should You Choose?
While some business plans may be more effective than others, there’s technically no wrong way to write one. Every business is different, and the type of plan you choose should ultimately boil down to your unique needs and goals. The two most common types of business plans are traditional and lean startup.
A traditional business plan might be right for you if:
- You’re detail-oriented.
- You want a comprehensive plan.
- You plan to request financing from traditional sources.
A traditional business plan is a great way to show you’ve done your homework, which is why it’s the preferred method of many lenders and investors. While a traditional plan may take more time to write, the extra effort is worth it in the long run. The more thorough you are, the better you’ll be able to answer questions about what your company is, how it will stack up to competitors, and why it will be a financial success. You don’t have to stick to a set structure, but the following nine sections should be included in a traditional business plan: executive summary and company description; market analysis; organization and management structure; service or product line description; marketing and sales strategy; and funding requests and financial projections.
A lean startup plan might be right for you if:
- You want to explain or start your business quickly.
- Your business is relatively simple.
- You plan to regularly change and refine your business plan.
The lean startup format is ideal for entrepreneurs who want to keep things high-level and adaptable. At their core, lean startup plans focus on only the most important details — making them a viable streamlined alternative. Lean startup business plans can take as little as an hour to write and are typically only one page. By sticking to the following basics, expressed through visual tradeoffs and fundamental facts, you leave a lot of room to fill in the blanks later: partnerships, activities, and resources; value propositions; customer experience, target market, and channels; and cost structure and potential revenue streams.
Regardless of which route you choose, the SBA is here to help. Our Business Planning Guide is easy to use and contains templates you can follow. Our “How to Write a Business Plan” course, offered through the SBA Learning Center, will show you how to plan, outline, and develop your own business plan. Of course, if you prefer a more hands-on option, an SBA resource partner is standing by. Learn more at sba.gov.