The sections a lender expects
Deviating from this order rarely helps. A loan officer reads dozens of these and knows where to look for each answer.
- Executive summary. Written last. One page: what the business does, who it serves, what you are asking for, what it is for, and why it works.
- Company description. Structure, ownership, location, licensing, history if it exists.
- Market analysis. Your service area, the customers in it, the competitors already there, and where you fit.
- Organization and management. Who runs it and what they have done before. For a small business this is largely about you.
- Products and services. What you sell, how it is priced and delivered.
- Marketing and sales. How customers will find you, with a budget that matches the revenue you are forecasting.
- Funding request. Amount, use of funds, terms you are seeking, and how it is repaid.
- Financial projections. Three years of profit and loss, cash flow, break-even, and the assumptions behind every line.
- Appendix. Quotes, leases, licenses, resumes, letters of intent.
What they are actually checking
- Do the assumptions hold up? Revenue built from a defensible number of jobs at a defensible price beats a growth percentage with no working behind it.
- Is there demand where you are? A market section citing national industry growth tells them nothing about your county.
- Will customers find you? This is where marketing costs belong. Leaving them out makes the whole model look optimistic.
- Can you repay it? Cash flow, not profit. A profitable business with a cash gap in month four is the thing they are looking for.
- Do you understand the risks? Naming them and saying what you would do is a strength. Pretending there are none is a weakness.
The mistakes that send plans back
- Revenue projections that rise smoothly with no seasonality, when the business is obviously seasonal
- A marketing budget of zero, or a placeholder line with no basis
- Market research copied from a national report with no local figures
- An owner salary left out, which makes the numbers work only because you are working for free
- An executive summary written first, which reads like a hope rather than a summary
Build the financials from the bottom up
Start with the unit: one job, one customer, one table, one enrolment. What does it sell for, what does it cost to deliver, how many can you do in a week, and how many will you actually get in month one, month six and month twelve? Build the year from that. A lender can follow it, and so can you when reality diverges from the plan.
Where to get help for free
Before paying anyone, talk to your local Small Business Development Center or SCORE chapter. Their advising is free, they see plans from your local lenders regularly, and they will tell you what your specific bank tends to ask for.
Common questions
How long should a business plan be?
Long enough to answer the questions and no longer. Fifteen to twenty-five pages plus appendices is typical for a small business loan.
Do I need a plan if I am not borrowing?
A shorter one is still worth writing, because the financial model is what tells you whether the business works. Most owners find something uncomfortable and useful in the exercise.
Can I use a template?
Templates are fine for structure. The content has to be yours; lenders recognise generic filler immediately.
What if the numbers do not work?
Better to find out on paper. Change the pricing, the cost base or the plan, or do not borrow. That answer is the most valuable outcome of the process.
Where to start
Build the unit economics before writing a word of narrative. If the unit works, the plan writes itself; if it does not, no amount of prose will fix it. We write plans with owners as a fixed-fee engagement, described on our business plan writing page.