Consider including resumes and CVs of key members of your team. Show how each person's unique experience will contribute to the success of your venture. Use an organizational chart to lay out who's in charge of what in your company. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you're a sole proprietor or limited liability company (LLC). Tell your reader how your company will be structured and who will run it.ĭescribe the legal structure of your business. What do successful competitors do? Why does it work? Can you do it better? Now's the time to answer these questions. In your market research, look for trends and themes. Competitive research will show you what other businesses are doing and what their strengths are. You'll need a good understanding of your industry outlook and target market. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths. Be specific, and list out the consumers, organization, or businesses your company plans to serve.Įxplain the competitive advantages that will make your business a success. Go into detail about the problems your business solves. Use your company description to provide detailed information about your company. You should also include financial information and high-level growth plans if you plan to ask for financing. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. Executive summaryīriefly tell your reader what your company is and why it will be successful. Traditional business plans use some combination of these nine sections. Instead, use the sections that make the most sense for your business and your needs. When you write your business plan, you don’t have to stick to the exact business plan outline. You might prefer a traditional business plan format if you’re very detail-oriented, want a comprehensive plan, or plan to request financing from traditional sources.
It’s useful to have on hand as you create your business budget because it serves as your baseline. Now that we’ve discussed how to track your income, expenses, and actual costs, you can better understand your finances-and make better financial decisions for your small business-by creating an income statement.Īs we mentioned earlier, your income or profit and loss (P&L) statement shows how much profit your business has made, or how much you’ve lost. Step 4: Make better financial decisions for your small business Which brings us to our fourth and final step: Use this information to make better decisions for your small business. Your intentions might be good when it comes to what you should be spending, but if you aren’t going to adjust this in practice, you won’t find much use in a budget. Why is this step so important? Because it’s like holding a mirror up to your finances. You’ll do this to see if what you estimated reflects the actual expenses leaving your bank account. Here’s where you’ll revisit our business budget template on a monthly basis to track what you’ve actually spent on each line item you entered in step 2. To get an accurate budget, make sure to include all streams of revenue in your inventory.įields to input actual income and costs highlighted in our business budget template Depending on your business model, you might have several sources of revenue, such as a subscription service or online classes. We’ll cover that later on.įor this first step, we’re most interested in your revenue. Profit: Cash your company makes from business operations, including gross profit, operating profit, and net profit.ĭon’t have an income statement handy? No problem. Revenue: Income generated through the sale of goods and services from business operations, after deducting returns and allowances such as discounts.Įxpenses: Cost to produce goods and services sold as well as operating expenses. An income statement shows how much profit your company has made, or how much you’ve lost. To find out how much you’re bringing in, you can refer to your profit and loss (P&L) statement, also known as your income statement. Why not? Because your income determines how much you’re able to spend. You can’t create a budget without taking inventory of your income.
Step 1: Take inventory of income to determine what you can spend Rather than create a budget spreadsheet yourself, use our budget template spreadsheet to jumpstart your budget plan. How to use our free small-business budget template