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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.
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.
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 understanding of its contents.
Let’s see what an SBA business plan template contains.
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.
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:
In this company overview 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:
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:
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.
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.
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.
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:
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:
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:
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.
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:
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.
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