And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Our partners cannot pay us to guarantee favorable reviews of their products or services. " At Nerd Wallet, we strive to help you make financial decisions with confidence. A business plan can make or break a small business. [Back to top] An objective statement should clearly define your company’s goals and contain a business strategy that details how you plan to achieve them.
We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. It contains important information including its registered name, address of any physical locations, names of key people in the business, history of the company, nature of the business and more details about products or services that it offers or will offer.
To do this, many or all of the products featured here are from our partners. A strong, detailed plan provides a clear road map for the future, forces you to think through the validity of a business idea, and can give you much greater understanding of your business’s financials and the competition. It spells out exactly what you’d like to accomplish, both in the near term and over the long term.
A business plan typically looks out over three to five years, detailing all of your goals and how you plan to achieve them. If you’re looking for outside funding, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets.
It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.This section can also highlight the strengths of your business and focus on what sets your business apart from your competition.[Back to top] If you’re a startup, you may not have much information on your business financials yet. [Back to top] This section provides a snapshot of your small business. It should include a mission statement, which explains the main focus of your business, as well as a brief description of the products or services offered, basic information such as ownership structure, and a summary of your plans.But you should also address the various risk factors of the business, Allen says.“The loan officer is definitely going to want to know that you’ve thought through all of the potential risks and that you’ve mitigated those risks in some way,” he says.This article was co-authored by our trained team of editors and researchers who validated it for accuracy and comprehensiveness.Together, they cited information from 16 references.[Back to top] Now that you’ve written your business plan, here are some tips to help your hard work stand out: Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well.Providing unreasonable sales estimates can hurt your chances of loan approval.