Business Formation – Business Plan Template

So you are at the point where you know you want to start a business, you have an idea, and you are wanting to move forward. What next? Today I will review one of the resources I have shared with you in the Tools and Resources section –‘s Business Plan for a Small Business Startup. This is a business plan template that I found immensely helpful in that it poses multiple questions in each section of the business plan to help you work through how to write and plan for your business.

The point of going through this process is not necessarily to write a formal business plan for funding from investors or a bank, although it could certainly be refined to that level. The point of this exercise is to help you think through all aspects of the venture you are undertaking and to help guide you down a rough and rocky path. The reality is that most businesses fail and that you need to set yourself up for success in this journey if you want to make it. Going through this business plan will help you avoid mistakes and set your business on a solid path in the beginning. Below I will throw in my thoughts on the document as you browse along with the download.

Executive Summary

This section sums up all of the others and is an introduction and overview to anyone who reads your business plan. This is a great place to work on speaking to what you are wanting your business to be. It certainly helps to be able to confidently speak to your business and plan for its success to skeptical family and friends, and builds confidence in your interactions with potential customers.

General Company Description

This section details your business and industry and includes the mission statement, company goals and objectives, business philosophy, and other details. I find that setting the mission statement and business philosophy is a great process to work through to define success for your business and to set the end-goal. You also need to evaluate why your business should work and why people should come to you for products and services. In most instances, there are plenty of people out there doing what you do, and it is humbling to realize that there isn’t a good reason why people should choose you over the next business. These are issues that you need to work through and be creative in overcoming. I would suggest one important reason for people to choose your business that you could consider growing and developing – you. If people know you, they know you care, and they feel a personal interest in what you are doing, they will be more likely to come to you for services over your competition. This personal connection and attitude of caring and building into your customers should be part of your core strengths here.

Products and Services

Ok, this is pretty simple, but what is it that you want to do or provide? You are the expert here, but I would say that some objective analysis is warranted here to ensure you know your pricing, margins, and have a plan for when sales don’t meet your forecasts.

Marketing Plan

I love this section, but feel it needs some updating to get into the 21st century. Maybe I will work on that in the future. Hopefully you have some first-hand knowledge and experience of the industry you are entering, but it is still a great exercise to answer these questions to determine your competition and their strengths and weaknesses, the size of the market, demand, barriers to entry, and changes in technology that are affecting the industry. The changes in technology is an important point because many of the established businesses in your industry may not be on the cutting edge of the social networking tools that are available today. Being small to start, you can do a lot to establish your business online in ways that may not be taken advantage of by your competition.

Unless you have had your own business before, many of these questions will be difficult to answer immediately. Don’t get discouraged by this, but instead take it as advice on where you might be lacking in your business knowledge. It isn’t bad to not know something, but once you realize what you need to know, search it out until you are proficient in that area. Being a small business owner requires competence in a wide array of skills, so take what you see here and build a list of skills to learn.

Operational Plan

This is where the rubber meets the road. You set up your systems and structure to manage the “business” side, but this section details the core competencies of your business. Here you should describe not only the immediate work that you will do in your business either through making products or providing services, but you should also plan for growth. Think through what it would be like if you suddenly had twice as much work as you could handle. Go through this section twice – once for now, and the other for when it takes off. The important thing here is to have or develop an idea of how your business scales with growth. This is really a make or brake issue for a lot of businesses as they see more sales and start incurring larger expenses without thinking through how to scale efficiently and safely. One example is taking on larger accounts receivable balances without first preparing a solid collections plan that you know will keep your business afloat. Running out of cash even though you have significant amounts of receivables is a rough way to go out.

Management and Organization

With a small business, this section will likely involve one person – you. But I would challenge you to reach out in your circles or community and seek some mentors and business people who would be willing to meet on a quarterly basis with you to review where you are at with your business. This can also be your accountant, who should be willing to provide free 1 hour business consultation once a quarter with a bookkeeping package (if not, is he/she in it to help you or just for the money?). I would encourage you to get at least 1 or 2 people who are experienced in business or finance to walk with you. Also, unless you are already in a working relationship where this isn’t appropriate (such as with an accountant), offer them something in return. If your products or services are worth something to them, offer to provide these services to them it gratitude for their help (if you are in landscaping/lawncare take care of their house for free, if you make jewelry or clothing, make something for her or his wife). If this doesn’t apply, pay them for their time. Treat them for lunch and write them a check for $100 for their time. This might hurt at first and you could probably think of where that money needs to go, but if you can get some solid support behind your business, I believe it will take you a lot further in the long run.

Some tips to keep in mind with any mentors:

  • Have them sign a non-disclosure and non-compete agreement and ensure the confidentiality of meetings. Anyone who is interested in your success will not take offense to this. (However, do not do this if you haven’t started your business… your ideas are useless unless you back them up and start a business)
  • Always come to a meeting with prepared with open-ended questions to draw out their expertise in the situation, appropriate and timely information and financials for your business, and ensure they know the specific assistance you are asking of them through. All of this can be prepared beforehand in a meeting agenda that you can email them before the meeting so that they can prepare and make it worthwhile.
  • Appreciate them, thank them, respect their time.

Personal Financial Statement

You may or may not need this section for a banker or investor, but again it is a good exercise for you to go through to understand where you are and what you need to bring in the door to remain above water. You can find a good template for a personal financial statement from here.

Startup Expenses and Capitalization

Ah yes, the money… This can be the most challenging and revealing exercise in determining whether your business will sink or swim. Be careful to plan well, because running out of cash 1 month before everything in your business would fall into place and become profitable is not fun. I would go into this more, but every situation is unique. I will once again link you to an excellent worksheet that will take you through this section for your specific business; this is from and can be found here.

Financial Plan

The financial plan builds on the above section and is essentially your plan to ensure you have enough cash to see your business through to profitability. This plan is typically viewed by investors and bankers in-depth, so if that is your plan, I would recommend going through the worksheets below yourself first, and then with your accountant and advisors to refine them. Much of this process requires accounting knowledge and the ability to apply accounting principles in an abstract way.

The tools for this section are here, and I have also included them in the tools and resources section (again, from

12 Month Profit and Loss Projection

 3 year Profit and Loss Projection

12 Month Cash Flow Projection

Break-Even Analysis

Some of this is pretty in-depth, but as I said previously, if you find a weakness in your abilities through this process, you know what you have to work on to learn. No business owner I know has ever regretted understanding accounting, their financial statements, and how to prepare these kinds of tools because they are the foundation for any successful business (which is also why I am here, to help you grow in that knowledge).

Refining the Plan

This final section will give you some questions that are tailored more to your business and industry. Take a look here and answer the appropriate questions in the right section.


Ok, so this is my longest post so far, but I couldn’t find a good place to stop and split it up, so I hope you will forgive me for that. I hope what I shared here was helpful and that you will find as much value in the resources linked to in this article as I have. I do not claim the links as my own, but all links in this post come from the resources over at; however, I did want to link to each tool to make it easier for you to find and use. Let me know what you think or if you have any questions!

Keep Reaching!



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