Traditional or lean?
The SBA’s write your business plan (opens in a new tab) page describes two styles. A traditional plan is longer and detailed, and is what many lenders and investors expect. A lean startup plan is short and high-level, focused on the key elements, and can be quicker to write and revise.
| Measure | Traditional plan | Lean plan |
|---|---|---|
| Length | Longer, with full sections | Short, often a page or a chart |
| Detail | Detailed market, operations and financial sections | Key points only |
| Often used for | Loan applications and investor requests | Testing an idea and planning internally |
| Updating | Revised periodically | Easy to revise often |
Many owners start lean, then expand to a traditional plan when they approach a lender.
What goes in a traditional plan
- Executive summary. What the business is and why it will succeed, in brief. Many people write it last.
- Company description. The problem you solve, who you serve and what sets you apart.
- Market analysis. Your industry, target customers and competitors, based on research you can point to.
- Organization and management. The legal structure and who runs what. The business formation guide covers structure.
- Products or services. What you sell and how it is made or delivered.
- Marketing and sales. How you will reach customers and turn them into sales.
- Funding request. How much you need, what for, and over what period, if you are seeking financing.
- Financial projections. Expected revenue, expenses and cash flow, with the assumptions behind them.
- Appendix. Supporting documents such as licenses, resumes or letters of reference.
Making projections believable
Projections are where many plans lose a reader. A lender is less interested in an optimistic number than in why you expect it. It can help to state each assumption plainly: how many customers, at what price, with what costs, and based on what evidence.
- Tie revenue to specific drivers, such as customers, orders or contracts.
- Include every regular cost, including taxes, insurance and loan payments.
- Show a cash flow projection, not just profit, since timing matters. See the cash flow guide.
- Build a cautious version alongside the expected one.
How lenders read a plan
A lender reading a plan is looking for a clear use of funds, a believable path to repayment, and an owner who understands the business and its risks. The SBA’s fund your business (opens in a new tab) page explains how a plan fits into the funding process, and our loan-readiness guide lists the other documents lenders commonly request. If an SBA-backed loan is on your list, a traditional plan is often part of the package.
Free help writing a plan
You do not have to write a plan alone. SBA resource partners, including SCORE mentors, Small Business Development Centers, Women’s Business Centers and Veterans Business Outreach Centers, offer free or low-cost counseling and plan reviews. Find them on the SBA’s resource partners (opens in a new tab) page.
Red flags
Be wary of paying high fees for template plans or plans sold with a promise that they will win funding. A plan built on numbers you cannot explain can hurt more than help. Many free templates and free reviews are available through SBA resource partners.
Frequently asked questions
Do I need a business plan for a loan?
Many lenders ask for one, especially banks and SBA lenders, and most want at least a clear explanation of how the money will be used and repaid.
What is a lean business plan?
A short, high-level plan that covers only the key elements of the business, such as the value offered, customers, activities and finances. It is quicker to write and revise than a traditional plan.
Where can I get free help with a business plan?
SCORE mentors, Small Business Development Centers, Women’s Business Centers and Veterans Business Outreach Centers offer free or low-cost help through the SBA’s resource partner network.
How long should a business plan be?
It depends on the format and audience. A lean plan can fit on a page, while a traditional plan for a lender is longer and more detailed.