Creating a business plan — a document that describes your business and your plan to grow — is one of the best ways to set your business up for success. By serving as a strategic document for your business, your business plan helps you stay focused as your business thrives. Writing a business plan can help your business grow faster, and even the leanest startups can benefit from a business plan.
A business plan is also critical to secure financing. Lenders and investors use your business plan to gauge the viability and stability of your business. A well-crafted plan can make you look like an attractive borrower, helping to bridge the funding gap still facing many minority entrepreneurs.
If you’ve never written a business plan, though, we’re here to help. Read on to learn what to include in a business plan, and for insight into approaching planning as a minority business owner.
What is a business plan?
A business plan is a strategic document that lays out the market research behind your business, a description of your products or services, as well as financial information and forecasts. It helps outsiders understand your vision for the business and presents research and information to show why your business is viable.
How long should a business plan be?
The length and complexity of your plan depends on the nature of your business, and the U.S. Small Business Administration recommends 38 to 50 pages for a basic plan and 80 to 100 pages for a more complex one. The plan should be long enough to help readers fully understand your business, as well as gain key insights to help guide funding decisions.
What goes into a business plan?
Whether you’re preparing a long business plan or a brief one, you’ll want to touch on these key concepts in your business plan.
- Executive summary: A 1- to 2-page summary of the plan that helps readers get to know you and understand your business at a glance.
- Market research: A forward-looking analysis of the trends affecting your industry and target market. You’ll also want to include a competitive analysis that lays out what your competitors are doing and any unmet needs in the marketplace.
- Business description: Insight into what you do, who you serve, and how you meet the needs of your target market. Touch on what makes you different, showcasing any expertise or innovation that will help you succeed.
- Business and management structure: Your plan for the legal structure of your business, as well as a list of the leading members of your team and their responsibilities.
- Marketing plan and sales overview: Describe your marketing strategy, touching on key messages as well as which marketing channels you’ll use. Briefly describe your sales cycle, so readers have a sense of what a sale looks like.
- Financial overview: Make your business attractive to lenders with documentation to show your financial health. Show balance sheets and cash flow statements, as well as financial projections for the next 2 to 5 years. List any assets owned by yourself or the business that you could use as collateral for a loan.
- Funding requirements: A brief explanation of the funding you need, supported by your financial forecast. Describe what you’ll use the funding for, how it will help you realize your plan, and how you plan to pay it back.
- Appendices: Any supporting documents required for your plan. That could include your business or personal credit report, proof of intellectual property, certifications, and supporting documents showing your expertise.
How to write a business plan as a minority business owner
Think strategically from the start to write an effective business plan. These 5 tips can help.
Write the executive summary last
A great executive summary makes a strong first impression, and it should be the last thing you write.
As you research and write your in-depth business plan, you’ll get a sense of what details (and stories) are most important. Writing the executive summary last means you can touch on all those key points, and also ensures the summary accurately sums up what’s in the report.
Use storytelling to sell your business
There’s a story behind every business, and telling yours can make you more attractive to lenders. Storytelling can help influence attitudes and behaviors, and can help readers feel more connected with your journey — and more likely to want to help you succeed.
When you’re writing your business description, touch on why and how you started the business, as well as your journey to becoming an entrepreneur. Include storytelling in your executive summary to hook readers, too.
Note any certifications in your business plan
Getting certified as a Minority Business Enterprise (MBE) or Woman-Owned Small Business (WOSB) can help you access funding and training opportunities, as well as more easily connect with corporate buyers. List your certifications, or your intention to get certified, in your business plan, to look more attractive to lenders.
Use diversity in your marketing
Diversity is a strength — one that you can use to stand out in crowded markets. Research shows that consumers are intentionally purchasing more from minority-owned businesses in the wake of the pandemic, as well as supporting small businesses in general.
Use the marketing and sales section of your business plan to explain how your background fits into your marketing plan. You might decide to connect with prospects directly over social media or serve as the public face of your brand, for example, or run targeted ads to attract a diverse customer base.
Focus on the finances
Business owners love to dream big, but keep your financial forecasts as objective as possible.
Make sure you take all your expenses into account, and think about contingency plans if something goes wrong. Your forecasts should be backed by facts and figures to showcase the strength and stability of your business.
Show prospective lenders how your funding request figures into your financial plan. Let lenders know what the money will be used for, and use your financial forecast to show how (and when) you’ll pay it back.
A strong financial section serves two purposes: it helps you stand out to lenders, and also gives you a chance to consider what types of funding best suit your needs.
When you're ready to look for loans or financing, we're here to help. At PNC, we offer a range of small business solutions, from business credit cards to small business loans and more. Connect with a Minority Business Development Officer to learn more about how we can meet your borrowing needs and help your business grow today.