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SBA Business Plan Template Essentials: The Complete Guide

The very first thought of any entrepreneur before setting up a business is capital. And taking a loan to set up your business is a common way to do that. If done right, it can ensure a high ROI. It also provides you with the scope for expansion of your business without compromising on your operational funds.

If you are a small business owner, you are in luck.

The Small Business Administration (SBA) is a U.S. government agency that provides assistance and guidance to small businesses by providing tools like business planners, training programs, and small business loans.

It also provides a professional business plan template exclusively to guide businesses while applying for a small business loan. To do so, we recommend having a strong sense of what your business is and does, along with a solid plan.

If your business plan is not effective and goal-appropriate, you might have trouble navigating an SBA template. Hence, while drafting a business plan it is crucial to have a clear vision of the goal you want to achieve through the plan.

In this article, we’ll see what an SBA business plan is and what it includes.

What is an SBA Business Plan?

An SBA business plan is essentially the mapping of the objectives of your business with precise details of how you will execute them. It is a well-structured and detailed way to represent your business, its strategies, and operations. When applying for an SBA loan, having an SBA business plan is a requirement.

Creating your business plan using an SBA business plan template helps you stay on track and not deviate from the requirements of the loan. It shows lenders that you have complete knowledge about your business venture and instills trust.

Importance of an SBA Business Plan

Research shows that businesses that create and follow a plan are 16 percent more likely to succeed than those that don't plan. Regardless of the type of business plan you choose, having a plan is always beneficial.

We recommend the SBA business plan for companies that are seeking a small business loan. The SBA business plan template is drafted exclusively to help entrepreneurs navigate their way through the whole process of the SBA loan.

It is designed to assist entrepreneurs to seek answers to tough questions before they start building their business. An SBA business plan helps you develop a strategic framework for running your business.

It propels you towards researching your market, identifying your competition, and analyzing all the possible methods of implementing your strategies. Now that you know what an SBA business plan is and its significance, it is time to dive into the understandings of its contents.

Let’s see what an SBA business plan template contains.

SBA Business Plan Template

As with many traditional business plans, an SBA business plan also follows a similar format. The SBA business plan template contains nine major sections. These sections include the executive summary, company description, market analysis, organization, product description, marketing, funding request, and financial projections. Let’s try to understand each.

1. Executive Summary

An executive summary is simply an introduction to your SBA business plan. It should contain a brief abstract of your business plan. This section will include the noteworthy points of your plan for anyone to get a quick gist of your business and your strategies.

This section of your plan should contain the following aspects:

  • Introductory sentence: Introduce your business, your idea, the purpose of setting up your business, and the product you are offering for your customers.
  • Description of business opportunity: In this segment of your business plan, you should describe the problem you are solving for your target customers. This is your business opportunity.
  • Target market: Mention your target customers to whom you are selling your product or service.
  • The solution you offer: Explain how your product or service is the ideal solution for the problem your target customer base is facing.
  • Business model: Your business model, at its core, is how you will generate sales and make profits.
  • Market competition: Identify your potential competition in the market and mention them.
  • Marketing and Sales Strategy: Describe how you will market your product and mention your sales channels.
  • Financial projections: This is essentially a forecast of future expenses and revenues.
  • Execution of your plan: Explain how you will implement your plan and strategize all your objectives.

2. Company Description

In this section of your SBA business plan, you will describe what your company does and every detail about your company. It includes your target customers, your business partners, your competitors, and more.

The below are the major key points this section should include:

  • Identity and objective: Mention your company’s identity and what your company does. You may also include your company’s ethics and values.
  • Your company’s offerings: Define in detail what your company offers. Explain the product or service that you are selling.
  • The problem you solve: Specify the problem you chose to solve to cater to the needs of your customers.
  • Target customers: State which section of the people you have targeted. You should also mention your customers’ priorities and values.
  • Your strengths: Include the advantages you have over your competition in the market. You can also list out these companies’ names and mention how you are different from them.
  • Partners: Mention your company’s business partners, partnership period, and how they contribute to the business.

3. Market Analysis

In this section, you write a detailed analysis of the market in which you’re going to set up your business. The following are the aspects you should include in your SBA business plan:

  • Mention in detail what other companies in your industries are doing.
  • Explain in detail the strengths and advantages of your competition
  • Specify the market trends and themes that have occurred
  • Examine the reasons that are responsible for the success of other companies in your industry.
  • Figure out if you are capable enough to outrun your competition by doing what they are doing but in a better and more efficient way.
  • Research if any of your competition have strategic advantages like the ideal location, cheap procurement of raw materials, etc.

4. Organization and management

In this section, you will define the structure of your business. This will include the legal and organizational structure of your business, and the management practices you follow.

Legal structure

Here, you describe the legal structure of your business. Is it going to be a general or limited partnership, an LLC, a sole proprietorship, or be incorporated as a C or S corporation? Explain in complete detail how you will structure your business legally and how it will impact your business operations.

Organizational chart

Attach an organizational chart of the internal structure and hierarchy of your business. This will include roles, responsibilities, and relationships between individuals in the company.

5. Service or Product

Once you’re done with the above, you now give a complete description of the product or service you’re selling to your customers. The following are the key aspects that this section of your SBA business plan should have:

  • Describe in detail the product or service you’re providing to your targeted customer base.
  • Explain the pricing of your product. You should also mention all the costs that have contributed to the final price of the product.
  • List down all the possible uses of your product and how your customers will benefit from it.
  • Discuss the product life-cycle of your product. Explain in detail the four stages of a product life-cycle: Introduction, growth, maturity, and decline.
  • Include a plan mentioning how you will handle the intellectual properties, copyright, and patent filings.
  • Mention all or any research and developments you have regarding your business.

6. Marketing and Sales

Next, include your marketing strategies, sales channels, and the budget of both. The below are the important point that should be in this section:

  • Write a detailed plan of how you will market your product to draw your customers
  • Provide the details of the sales process and mention the sales channels you are choosing.
  • Mention the details of your budget regarding marketing and sales of the product
  • Discuss the goals of your marketing and sales strategies
  • Review and address your pricing strategy as it affects your marketing and sales.

7. Funding request

The most prominent reason why entrepreneurs create an SBA business plan is to make lenders believe that they are a viable and reliable business venture. This section is simply for putting forward your funding requests. The following should be included in this section:

  • Specify the amount of funding you will require for running your business for the next five years
  • Explain in detail how you will use the funding that was provided
  • Mention what type of funding are you looking for
  • Add a detailed description of your future financial plans, which include repaying debts, managing the cash flow, budgeting of expenses, etc.

8. Financial Projection

The purpose of financial projection is to make it possible for the reader to assess your company’s financial stability. It includes the current financial reports of your business and future projections.

It is focused to convince potential funders that your company is financially stable and solvent. The below information should be included in your SBA business plan:

  • Attach income statements of the past three to five years
  • Attach balance sheets of the past three to five years
  • Attach cash flow statements of the past three to five years
  • Mention the collaterals that you possess
  • Mention financial projections for the next five years:
    • Projected income statements
    • Projected balance sheets
    • Projected cash flow statements
    • Budgeted capital expenditures

The ideal way to represent future projections is by using monthly or quarterly projections in the first year and henceforth with annual projections. Explain how the projections and the information represented are relevant to your funding request. Consider the SBA loan rates and the guarantee fee while projecting your new payment amounts.

9. Appendix

The Appendix is the last section of your SBA business plan. It contains all the additional documentation that is important to explain a specific aspect of your business. It could also include documents that are exclusive to a particular lender that may not fit into the predefined outline of a business plan.

Usually, the common information in an appendix include:

  • Credit history
  • Resumes
  • Product photos
  • Letters of reference
  • Licenses and permits
  • Patents
  • Legal documents

Get Your Small Business Started with an SBA Template

Choosing the perfect business plan for your business can be tricky, especially while seeking lenders to set up your business. However, it is not difficult once you know what your lenders are looking for in your business plan.

Fortunately, an SBA business plan is apt and compatible with all the requirements of lenders. Create your SBA business plan now and start your journey towards building your business.

Ayush Jalan
Ayush Jalan
Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.
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