small scale business plan

You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.

This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.

7. HubSpot’s Complete Guide to Starting a Business

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The Importance of Market Research

Creating a business plan, legal requirements, exploring funding options, crafting a marketing strategy, managing and growing your business, how do i start a small business for beginners, how do i create a business plan, what are six ways to grow and scale a business, the bottom line.

• Small Business
• How to Start a Business

Starting a Small Business: Your Complete How-to Guide

From market research to managing growth

• How to Start a Business: A Comprehensive Guide and Essential Steps
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills
• Business Plan: What It Is, What's Included, and How to Write One
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
• Best Startup Business Loans
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC
• Partnership: Definition, How It Works, Taxation, and Types
• What is an LLC? Limited Liability Company Structure and Benefits Defined
• Corporation: What It Is and How to Form One
• Starting a Small Business: Your Complete How-to Guide CURRENT ARTICLE
• Starting an Online Business: A Step-by-Step Guide
• How to Start Your Own Bookkeeping Business: Essential Tips
• How to Start a Successful Dropshipping Business: A Comprehensive Guide

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The U.S. is home to 33.2 million small businesses, which drive over 43% of GDP.   If you are looking to start a business, there are key factors to consider—from market research and creating a business plan to scaling your business. These factors are critical to your journey and can make a big difference no matter what stage of the process you are in.

Entrepreneurs who take concrete action can differentiate themselves from competitors, innovate, and grow. For successful entrepreneurs, the execution of the business is often what means the most. 

Key Takeaways

• Starting a small business involves extensive market research of your target audience, competitors, and gaining a deep understanding of the industry.
• It is important to build a comprehensive business plan that includes the product or service description, your target customers, financial projections, and all other key details.
• Understanding the legal requirements of starting your business involves knowledge of business registration, permits, licensing, and other regulatory requirements.
• There are various types of funding channels for starting a business, including financing it yourself, securing external funding from your network, and applying for government and corporate grants and loans. 

Being clear about your business goals involves doing your research. Successful entrepreneurs often do extensive research on their field. This includes understanding their prospective customers, the technical aspects of the industry, and the challenges other businesses are facing. 

Understanding how other players operate in an industry is important. Attending conferences, joining associations, and building a network of people involved in the field can help you learn how decisions are made. Often, comprehensive market research takes six months to a year. 

Understanding Your Target Audience

Knowing your target market is critical for many reasons. These are the customers who are most likely to purchase your product, recommend it to friends, and become repeat buyers. Apart from driving your bottom line, having a strong understanding of your target audience will allow you to tailor your offering more effectively, reach your customers more efficiently, and manage customer expectations.

Compiling demographic data on age, family, wealth, and other factors can give you a clearer understanding of market demand for your product and your potential market size.

It’s important to ask, “Why would someone buy this and part with their discretionary income?” or “Will someone love this enough to tell someone about it?” At the heart of these questions is understanding whether your business solves a key problem, as well as whether it delivers the “more” that connects to your audiences’ human emotions.

Assessing Market Trends and Opportunities

To find an advantage in a given market, look at key market trends in customer behavior and the business landscape. Explore the state of business conditions and consumer spending, along with the economic environment and how interest rates may affect financing and business growth.

Several resources are available to dive into market trends across industries, such as Statistics of U.S. Businesses and the U.S. Census Business Builder . To analyze the competitive landscape, and in turn, identify key opportunities, Porter's 5 Forces is a classic model to help businesses build their competitive strategy.

A business plan is a road map for achieving your business goals. It outlines the capital that you need, the personnel to make it happen, and the description of your product and prospective customers.

There are a number of models for creating a business plan. The Small Business Administration (SBA) , for instance, provides a format that includes the following nine sections:

• Executive summary: This should be a description of your company and its potential for success. The executive summary can cover your mission statement, employees, location, and growth plan.
• Company description: This is where you detail what your business offers, its competitive advantages, and your strengths as a business.
• Market analysis: Lay out how your company is positioned to perform well in your industry. Describe market trends and themes and your knowledge of successful competitors.
• Organization and management: Who is running your company, and how is your business structured? Include an organizational chart of your management team. Discuss if your business will be incorporated as a business C or S corporation, a limited partnership, a limited liability company, or a sole proprietorship. 
• Service or product line: Here is where you describe how your business will solve a problem and why this will benefit customers. Describe how your product lifecycle would unfold.
• Marketing and sales: Detail your marketing strategy and how this will reach your customers and drive return on investment. 
• Funding request: If you're looking for financing, lay out the capital you’re requesting under a five-year horizon and where, in detail, it will be allocated, such as salaries, materials, or equipment. 
• Financial projections: This section shows the five-year financial outlook for your company and ties these to your request for capital.

Having a coherent business plan is important for businesses looking to raise cash and crystallize their business goals.

Setting Goals and Strategies

Another key aspect of a business plan is setting realistic goals and having a strategy to make these a reality. Having a clear direction will help you stay on track within specified deadlines. In many ways, it allows companies to create a strategic plan that defines measurable actions and is coupled with an honest assessment of the business, taking into account its resources and competitive environment. Strategy is a top-down look at your business to achieve these targets.

Financial Projections and Budgeting

Often, entrepreneurs underestimate the amount of funding needed to start a business. Outlining financial projections shows how money will be generated, where it will come from, and whether it can sustain growth. 

This provides the basis for budgeting the costs to run a business and get it off the ground. Budgeting covers the expenses and income generated from the business, which include salaries and marketing expenses and projected revenue from sales.

Another important aspect of starting a business are the legal requirements that enable you to operate under the law. The legal structure of a business will impact your taxes, your liability, and how you operate.

Businesses may consider the following structures in which to operate:

• Corporation
• Limited Liability Company (LLC)
• Partnership
• Sole Proprietorship

Each has different legal consequences, from regulatory burdens to tax advantages to liability being shifted to the business instead of the business owner.

Registering Your Business

Now that you have your business structure outlined, the next step is registering your business . Your location is the second key factor in how you’ll register your business. In many cases, small businesses can register their business name with local and state government authorities. 

If your business is being conducted under your legal name, registration is not required. However, such a business structure may not benefit from liability protection, along with certain legal and tax advantages. Often, registering your businesses costs $300 or less.

Before filing, a business structured as a corporation, LLC, or partnership requires a registered agent in its state. These agents handle the legal documents and official papers on your behalf.

Businesses that are looking to trademark their product, brand, or business, can file with the United States Patent and Trademark Office.

Understanding Permits and Licenses

If your business conducts certain activities that are regulated by a federal agency, you’re required to get a permit or license. A list of regulated activities can be found on the SBA website, and includes activities such as agriculture, alcoholic beverages, and transportation.

There are many different ways to fund a business. One of the key mistakes entrepreneurs make is not having enough capital to get their business running . The good news is that there are several channels to help make this happen, given the vital role entrepreneurs play in creating jobs and boosting productivity in the wider economy.

Self-Funding vs. External Funding

Bootstrapping, the term commonly used to describe self-funding your business, is where companies tap into their own cash or network of family and friends for investment. While the advantage of self-funding is having greater control, the downside is that it often involves more personal risk.

External funding involves funding from bank loans, crowdfunding, or venture capital , among other sources. These may provide additional buffers and enable you to capture growth opportunities. The drawback is less freedom and more stringent requirements for paying back these funds.

Grant and Loan Opportunities

Today, there are thousands of grants designed especially for small businesses from the government, corporations, and other organizations. The U.S. Chamber of Commerce provides a weekly update of grants and loans available to small businesses. 

For instance, Business Warrior offers loans between $5,000 and $50,000 to small business owners.  As another example, The Accion Opportunity Fund offers $5,000- $250,000 in loans to entrepreneurs, along with mentorship and educational resources. In particular, it supports companies run by women and people of color in addition people with low-to-moderate income.

When it comes to marketing, there is a classic quote from Milan Kundera: “Business has only two functions—marketing and innovation." In order to reach customers, a business needs a marketing strategy that attracts and retains customers and expands its customer base.

To gain an edge, small businesses can utilize social media, email marketing, and other digital channels to connect and engage with customers.

Branding Your Business

Building a successful brand goes hand in hand with building a great experience for the customer. This involves meeting the expectations of your customer. What is your brand offering? Is it convenience, luxury, or rapid access to a product? Consider how your brand meets a customer's immediate need or the type of emotional response it elicits. Customer interaction, and in turn loyalty to your brand, is influenced, for example, by how your brand may align with their values, how it shifts their perception, or if it resolves customer frustration.

Digital Marketing and Social Media

We live in a digital-first world, and utilizing social media channels can help your business reach a wider audience and connect and engage in real time. Given that a strong brand is at the heart of successful companies, it often goes without saying that cultivating a digital presence is a necessity in order to reach your customers. 

According to HubSpot’s 2024 report, The State of Consumer Trends, 33% of the 700-plus consumers surveyed discovered new products on social media and 25% bought a product there in the past three months.

Managing a business has its challenges. Finding the right personnel to run operations, manage the day-to-day, and reach your business objectives takes time. Sometimes, businesses may look to hire experts in their field who can bring in specialized knowledge to help their business grow, such as data analysts, marketing specialists, or others with niche knowledge relevant to their field.

Hiring and Training Staff

Finding the right employees involves preparing job descriptions, posting on relevant job boards such as LinkedIn, and effectively screening applicants. Careful screening may involve a supplemental test, reviewing a candidate's portfolio, and asking situational and behavioral questions in the interview. These tools will help you evaluate applicants and improve the odds that you'll find the people you are looking for.

Once you have hired a new employee, training is the next essential step. On average, it takes about 57 hours to train new employees. Effectively training employees often leads to higher retention. While on-the-job training is useful, consider having an onboarding plan in place to make the transition clear while outlining expectations for the job.

Scaling Your Business

Growing your business also requires strategy. According to Gino Chirio, executive vice president at the consultancy group Maddock Douglas, there are six ways that companies can grow their business to drive real growth and expansion:

• New processes: Boost margins by cutting costs.
• New experiences: Connect with customers in powerful ways to help increase retention.
• New features: Provide advancements to your existing product or service.
• New customers: Expand into new markets, or find markets where your product addresses a different need.
• New offerings: Offer a new product.
• New models: Utilize new business models, such as subscription-based services, fee-for-service, or advertising-based models.

With these six ways to grow a business, it is important to consider the risk, investment, and time involved. Improving your margins through new processes is often the most straightforward way to grow. Offering new features is also effective since it is tailored to your existing market with products you have already delivered.

By contrast, offering new products may involve higher risk since these have not been tested in the market. However, they may offer higher reward, especially if you have a first-mover advantage and release your product in the market before the competition.

A good place to start building a business is to understand the following core steps that are involved in an entrepreneur's journey : market research, creating a business plan, knowing the legal requirements, researching funding options, developing a marketing strategy, and business management.

A business plan is made up of a number of primary components that help outline your business goals and company operations in a clear, coherent way. It includes an executive summary, company description, market analysis, organization and management description, service or product line description, marketing and sales plan, funding requests (optional), and financial projections.

Business growth can fall into the following six categories, with each having varying degrees of risk and investment: new processes, new experiences, new features, new customers, new offerings, and new models.

Knowing how to start a small business involves the key steps of market research, setting up a business plan, understanding the legal requirements, exploring funding options, crafting a marketing strategy, and managing your business. 

For aspiring small business owners, these steps can help you successfully deliver your product or service to the market, and ultimately grow. While it can take a considerable amount of work, the payoffs are manifold: independence of work, personal fulfillment, financial reward, and following your passion.

U.S. Chamber of Commerce. " The State of Small Business Now ."

U.S. Small Business Administration. " Market Research and Competitive Analysis ."

U.S. Small Business Administration." Write Your Business Plan ."

U.S. Small Business Administration. " Choose a Business Structure ."

U.S. Small Business Administration. " Register Your Business ."

U.S. Small Business Administration. " Apply for Licenses and Permits ."

U.S. Small Business Administration. " Fund Your Business ."

Accion Opportunity Fund. " About Accion Opportunity Fund- Support for Small Businesses ."

Ogilvy. " Behind Every Brand Is a Great Experience, and Vice Versa—Why Today's Customer Expects Synergy ."

HubSpot. " Consumer Trends Report 2024 ."

Training Magazine. " 2023 Training Industry Report ."

Harvard Business Review. " The Six Ways to Grow a Company ."

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How to Write a Business Plan for a Small Business

Noah Parsons

24 min. read

Updated September 2, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of writing a business plan

If you’re reading this guide, then you already know why you need a business plan . 

You understand that writing a business plan helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your business plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After writing your business plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

When writing a business plan, the produces and services section is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

When writing a business plan, the operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

The last section of your business plan is your financial plan and forecasts. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI to write a business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of writing a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Writing a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of writing a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan

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Simple Business Plan Templates

By Joe Weller | April 2, 2020

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In this article, we’ve compiled a variety of simple business plan templates, all of which are free to download in PDF, Word, and Excel formats.

On this page, you’ll find a one-page business plan template , a simple business plan for startups , a small-business plan template , a business plan outline , and more. We also include a business plan sample and the main components of a business plan to help get you started.

Simple Business Plan Template

Download Simple Business Plan Template

Word  |  PDF

This simple business plan template lays out each element of a traditional business plan to assist you as you build your own, and it provides space to add financing information for startups seeking funding. You can use and customize this simple business plan template to fit the needs for organizations of any size.

One-Page Business Plan Template

Download One-Page Business Plan Template

Excel  |  Word  |  PDF  | Smartsheet

Use this one-page business plan to document your key ideas in an organized manner. The template can help you create a high-level view of your business plan, and it provides easy scannability for stakeholders. You can use this one-page plan as a reference to build a more detailed blueprint for your business. 

For additional single page plans, take a look at " One-Page Business Plan Templates with a Quick How-To Guide ."

Simple Fill-in-the-Blank Business Plan Template

Download Simple Fill-in-the-Blank Business Plan Template

Use this fill-in-the-blank business plan template to guide you as you build your business plan. Each section comes pre-filled with sample content, with space to add customized verbiage relevant to your product or service.

For additional free, downloadable resources, visit " Free Fill-In-the-Blank Business Plan Templates ."

Simple Business Plan for Startup

‌  Download Startup Business Plan Template — Word

This business plan template is designed with a startup business in mind and contains the essential elements needed to convey key product or service details to investors and stakeholders. Keep all your information organized with this template, which provides space to include an executive summary, a company overview, competitive analysis, a marketing strategy, financial data, and more. For additional resources, visit " Free Startup Business Plan Templates and Examples ."

Simple Small-Business Plan Template

Download Simple Small-Business Plan Template

This template walks you through each component of a small-business plan, including the company background, the introduction of the management team, market analysis, product or service offerings, a financial plan, and more. This template also comes with a built-in table of contents to keep your plan in order, and it can be customized to fit your requirements.

Lean Business Plan Template

Download Lean Business Plan Template

This lean business plan template is a stripped-down version of a traditional business plan that provides only the most essential aspects. Briefly outline your company and industry overview, along with the problem you are solving, as well as your unique value proposition, target market, and key performance metrics. There is also room to list out a timeline of key activities.

Simple Business Plan Outline Template

Download Simple Business Plan Outline Template

Use this simple business plan outline as a basis to create your own business plan. This template contains 11 sections, including a title page and a table of contents, which details what each section should cover in a traditional business plan. Simplify or expand this outline to create the foundation for a business plan that fits your business needs.

Simple Business Planning Template with Timeline

Download Simple Business Planning Template with Timeline

Excel  | Smartsheet

This template doubles as a project plan and timeline to track progress as you develop your business plan. This business planning template enables you to break down your work into phases and provides room to add key tasks and dates for each activity. Easily fill in the cells according to the start and end dates to create a visual timeline, as well as to ensure your plan stays on track.

Simple Business Plan Rubric Template

Download Simple Business Plan Rubric

Once you complete your business plan, use this business plan rubric template to assess and score each component of your plan. This rubric helps you identify elements of your plan that meet or exceed requirements and pinpoint areas where you need to improve or further elaborate. This template is an invaluable tool to ensure your business plan clearly defines your goals, objectives, and plan of action in order to gain buy-in from potential investors, stakeholders, and partners.

Basic Business Plan Sample

Download Basic Business Plan Sample

This business plan sample serves as an example of a basic business plan that contains all the traditional components. The sample provides a model of what a business plan might look like for a fictional food truck business. Reference this sample as you develop your own business plan.

For additional resources to help support your business planning efforts, check out “ Free Strategic Planning Templates .”

Main Components of a Business Plan

The elements you include in your business plan will depend on your product or service offerings, as well as the size and needs of your business. 

Below are the components of a standard business plan and details you should include in each section:

• Company name and contact information
• Website address
• The name of the company or individual viewing the presentation
• Table of Contents
• Company background and purpose
• Mission and vision statement
• Management team introduction
• Core product and service offerings
• Target customers and segments
• Marketing plan
• Competitive analysis
• Unique value proposition
• Financial plan (and requirements, if applicable)
• Business and industry overview
• Historical timeline of your business
• Offerings and the problem they solve
• Current alternatives
• Competitive advantage
• Market size
• Target market segment(s)
• Projected volume and value of sales compared to competitors
• Differentiation from competitors
• Pricing strategy
• Marketing channels
• Promotional plan
• Distribution methods
• Legal structure of your business
• Names of founders, owners, advisors, etc.
• Management team’s roles, relevant experience, and compensation plan
• Staffing requirements and training plans
• Physical location(s) of your business
• Additional physical requirements (e.g., warehouse, specialized equipment, facilities, etc.)
• Production workflow
• Raw materials and sourcing methods
• Projected income statement
• Projected cash flow statement
• Projected balance sheet
• Break-even analysis
• Charts and graphs
• Market research and competitive analysis
• Information about your industry
• Information about your offerings
• Samples of marketing materials
• Other supporting materials

Tips for Creating a Business Plan

It’s easy to feel overwhelmed at the thought of putting together a business plan. Below, you’ll find top tips to help simplify the process as you develop your own plan. 

• Use a business plan template (you can choose from the variety above), or refer to the previous section to create a standard outline for your plan.
• Modify your outline to reflect the requirements of your specific business. If you use a standard business plan outline, remove sections that aren’t relevant to you or aren’t necessary to run your business.
• Gather all the information you currently have about your business first, and then use that information to fill out each section in your plan outline.
• Use your resources and conduct additional research to fill in the remaining gaps. (Note: It isn’t necessary to fill out your plan in order, but the executive summary needs to be completed last, as it summarizes the key points in your plan.)
• Ensure your plan clearly communicates the relationship between your marketing, sales, and financial objectives.
• Provide details in your plan that illustrate your strategic plan of action, looking forward three to five years.
• Revisit your plan regularly as strategies and objectives evolve.
• What product or service are we offering?
• Who is the product or service for?
• What problem does our product or service offering solve?
• How will we get the product or service to our target customers?
• Why is our product or service better than the alternatives?
• How can we outperform our competitors?
• What is our unique value proposition?
• When will things get done, and who is responsible for doing them?
• If you need to obtain funding, how will you use the funding?
• When are payments due, and when do payments come in?
• What is the ultimate purpose of your business?
• When do you expect to be profitable?

To identify which type of business plan you should write, and for more helpful tips, take a look at our guide to writing a simple business plan .

Benefits of Using a Business Plan Template

Creating a business plan can be very time-consuming, especially if you aren’t sure where to begin. Finding the right template for your business needs can be beneficial for a variety of reasons. 

Using a business plan template — instead of creating your plan from scratch — can benefit you in the following ways:

• Enables you to immediately write down your thoughts and ideas in an organized manner
• Provides structure to help outline your plan
• Saves time and valuable resources
• Helps ensure you don’t miss essential details

Limitations of a Business Plan Template

A business plan template can be convenient, but it has its drawbacks — especially if you use a template that doesn’t fit the specific needs of your business.

Below are some limitations of using a business plan template:

• Each business is unique and needs a business plan that reflects that. A template may not fit your needs.
• A template may restrict collaboration with other team members on different aspects of the plan’s development (sales, marketing, and accounting teams).
• Multiple files containing different versions of the plan may be stored in more than one place.
• You still have to manually create charts and graphs to add to the plan to support your strategy.
• Updates to the plan, spreadsheets, and supporting documents have to be made in multiple places (all documents may not update in real time as changes are made).

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The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

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How To Write A Business Plan For Your Small Business

If you’re starting a new business or looking to grow an existing one, writing a business plan is a crucial step in the process.

Amanda Beach is a writer, editor, and project manager with 10 years of experience in tech and HR. She currently resides in Denver, CO.

What is a Business Plan?

Why write a business plan, how to write a business plan, tips for writing a business plan, how justworks helps startups & new small businesses.

Starting a business can be an exciting step for any entrepreneur. But there’s more to getting started than choosing a name and designing a logo. Starting a small business requires strategic thinking and planning to ensure you’re setting yourself — and your business — up for success.

Enter: the business plan. If you’re starting a new business or looking to grow your existing one, writing a business plan is a crucial step in the process. But how does one begin writing a business plan and what makes a good one? We’re here to help.

A business plan is a document that outlines crucial elements of a successful business like your goals, strategies, and financial projections. It serves as a roadmap for your business, and it can help you make more informed decisions as you scale and grow. And anything that can help you better run your business is a no-brainer, right?

A business plan can be helpful for small business owners. But how, exactly? 

Helps To Set Goals and Stay Focused

Writing a plan can force you to think critically about your business, which may not be the first task on your list. But by sitting down and writing your business plan, you can identify target markets, industry competition, unique selling propositions, and set realistic goals. And when you set specific and measurable goals , it’s easier to stay focused and track progress.

Attracts Investors and Secures Funding

Did you know that developing a comprehensive business plan can tell you a lot about your business? This includes how much funding you may need and how you’ll use it. Whether you’re seeking funding from investors or applying for a small business loan , a well-written business plan can help you make a strong case. It can also show potential investors that you have a clear understanding of your business and a solid plan for success.

Identifies Potential Problems and Solutions

When thinking critically about your business, it’s important to not solely focus on ways you’ll succeed. It’s important to consider the risks, too. By identifying possible problems early on, you have the opportunity to develop strategies to mitigate them. Thinking this through and including those strategies in your business plan also shows investors that you’ve got a contingency plan (just in case).

Helps You Make Informed Decisions

A fully developed business plan should also focus on a market deep dive, your competition, and financial projections. By expanding beyond the basics, you’ll have a roadmap to better make strategic decisions that will benefit your business in the long run.

Now that we’ve established why it’s important for business owners to write a business plan, it’s time to outline just how a business plan is written. 

Executive Summary

The executive summary provides an overview of your business, including your mission statement, products or services, target market, and financial projections. It may be easier to speak to these crucial points after you’ve finalized your plan, so skip writing the executive summary first. When you’re ready to write it, make sure to keep it concise and compelling so as to grab the reader’s attention and inspire confidence,

Company Description

The company description section is a great place to start writing. It provides a detailed overview of your business, so it should include things like your business name, location, company structure, and history. Highlight your unique point of view as a business as well as how you’ll stand out from the competition and be profitable. Speak up and add some personality, it’s important to convey what makes your business special.

Market Analysis

That market research you’ve done will come in handy for the market analysis section of your business plan. This section should include your analysis of your target market, your competition’s strengths and weaknesses, and relevant industry trends. When outlining your target market, make sure to include detailed descriptions of demographics, psychographics, and buying behavior. These details can help you determine ways to differentiate your business and attract customers.

Organization and Management

The organization and management section outlines your business’s organizational structure and  responsibilities of the management team. Don’t forget to plan ahead — you’ll also want to highlight any gaps in your team and how you plan to fill them.

Products and Services

In this section, you’ll provide a detailed description of your products and/or services. This part of your plan should explain exactly how your products and/or services meet the needs of your target market, as well as how they differ from those of your competitors. If you have any patents, trademarks, or copyrights (or if you plan to obtain them) you should also include those details in this section.

Marketing and Sales Strategies

Here, you will explain how you plan to reach your target market and the ways you’ll promote your products or services. Include details such as your pricing strategy, sales projections, and marketing plans. If you’ve developed any partnerships or collaborations to help you reach your target market, make sure those are highlighted here as well.

Financial Projections

While each part of your business plan has value, the financial projections section is one of the most important parts. It includes your income statement, balance sheet, and cash flow statement — all things potential investors will want to see. They also may want to see a break-even analysis . When compiling your financial projections, make sure it’s based on thorough research and realistic projections.

There may be information that doesn’t fit neatly into one of the above sections. Here, you can include information that may be relevant, such as the resumes of key team members, or related legal documents. Keep in mind that the appendix is supplemental and should never be too lengthy.

You’re almost ready to start writing your business plan! But we’ve got a few more tips to share to make the process even easier..

Keep It Brief 

Remember to keep your business plan concise and professional. Have your audience in mind and avoid using slang or technical terms that might be difficult for readers to understand. Avoid relying on long paragraphs, instead  use bullet points and headings to make it easier to read and navigate.

Be Realistic

While it’s important to be optimistic about your business, it’s just as important to be realistic. The financial projections you include in your business plan should be based on realistic assumptions. Investors will be more likely to trust a business plan that’s based on realistic projections.

Get Feedback

Before finalizing your business plan, it can be helpful to get feedback from others. Be it from friends, family, or business mentors, feedback can provide valuable insights and help identify gaps or areas for improvement. If you’re looking for tailored feedback, you may want to hire a professional business plan writer to review and provide feedback.

Writing a business plan is an essential step for any business owner. By taking this step, you can position yourself to set specific goals, attract investors, and make more informed decisions for your business. 

Are you in the first steps of writing your business plan or are you looking to kick your business into high gear ? No matter where you are in your business journey, Justworks is here to help.

With Justworks, you can have payroll, compliance, and HR all in one platform, as well as access to benefits through the group buying power of the PEO . It's all backed by a full-service support team that’s available 24/7 to help your business succeed, whenever and wherever. To learn more about Justworks, get started today .

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How to Write a Business Plan for a Small Business

Last Updated: August 1, 2024 Approved

This article was co-authored by Helena Ronis . Helena Ronis is Co-founder and CEO of AllFactors, a unified web analytics software to drive company's marketing and business growth. She has worked in product and marketing in the tech industry for over 8 years, and studied Digital Marketing & Analytics at the MIT Sloan School of Management Executive Program. There are 9 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 37 testimonials and 89% of readers who voted found it helpful, earning it our reader-approved status. This article has been viewed 1,028,876 times.

Preparing To Write Your Business Plan

• The mini plan. This is a shorter plan (likely 10 pages or less), and is useful for determining potential interest in your business, further exploring a concept, or starting point to a full plan. This is a great starting point. [2] X Research source
• The working plan. This can be considered the full version of the miniplan, and its main purpose is to outline, without emphasis on appearance, precisely how to build and operate the business. This is the plan that the business owner would refer to regularly as the business moves towards its objectives. [3] X Research source
• The presentation plan. The presentation plan is meant for individuals other than those owning and operating the business. This could include potential investors or bankers. It is essentially the working plan, but with an emphasis on sleek, marketable presentation, and proper business language and terminology. Whereas the working plan is made for reference by the owner, the presentation needs to be written with investors, bankers, and the public in mind. [4] X Research source

• The business concept is the first broad element of a business plan. The focus here is on the description of your business, its market, its products, and its organizational structure and management.
• The market analysis is the second major element of a business plan. Your business will operate within a particular marketplace, and it is important to understand customer demographics, preferences, needs, buying behavior, as well as the competition.
• The financial analysis is the third component of the business plan. If your business is new, this will include projected cash flows, capital expenditures, and the balance sheet. It will also include forecasts as to when the business will break-even.

• The above sections are the broad components of the business plan. These sections in turn break down into the following seven sections, which we will, in order, focus on writing next: Company description, market analysis, organization structure and management, products and services, marketing and sales, and request for funding. [6] X Research source

Writing Your Business Plan

• While the first section is technically known as the "Executive Summary" (which gives an official overview of your business), it is typically written last since all the information from the business plan is required to create it.

• For example, if your business is a small coffee shop, your description may read something like, "Joe's coffee shop is a small, downtown-based establishment focused on serving premium brewed coffee and fresh baking in a relaxed, contemporary environment. Joe's coffee is located one block from the local University, and aims to provide a comfortable environment for students, professors, and downtown employees to study, socialize, or simply relax between classes or meetings. By focusing on excellent ambiance, close location, premium products, and superb customer service, Joe's coffee will differentiate itself from its peers."

• Include information about your target market. You should be able to answer questions like, who is your target market? What are their needs and preferences? How old are they, and where are they located?
• Make sure to include a competitive analysis that provides research and information on immediate competitors. List your main competitors strengths and weaknesses and the potential impact on your business. This section is extremely important, as it outlines how your business will gain market share by capitalizing on competitor's weaknesses.

• Talk about your team's expertise and how decisions will be made. If the owners and managers and have extensive backgrounds in the industry or a track record of success, highlight it.
• If you have an organizational chart, include it.

• Address any questions about your product's life cycle. Do you currently have or anticipate developing a prototype, or filing for a patent or copyright? Note all planned activities.
• For example, if you are writing a plan for a coffee shop, you would include a detailed menu that would outline all your products. Before writing the menu, you would include a short summary indicating why your particular menu sets your business apart from others. You may state, for example, "Our coffee shop will provide five different types of beverages, including coffee, teas, smoothies, soda's, and hot chocolates. Our wide variety will be a key competitive advantage as we can provide a diversity of product offerings that our main competitors are currently not offering".

• Be clear in defining your sales strategy. Will you use sales representatives, billboard advertising, pamphlet distribution, social media marketing, or all of the above?

• Gather financial statements to support your funding request. To accurately complete this step, in some cases it might be necessary to hire an accountant, lawyer, or other professional.
• Financial statements should include all historical (if you are an existing business) or projected financial data, including forecast statements, balance sheets, cash-flow statements, profit and loss statements, and expenditure budgets. For one full year, provide monthly and quarterly statements. Each year after that, yearly statements. These documents will be placed in the Appendix Section of your business plan.
• Include projected cash flows for at least 6 years or until stable growth rates are achieved and if possible, a valuation calculation based on discounted cash flows.

• Existing businesses should include historical information about the company. When was the business first conceptualized? What are some notable growth benchmarks?
• Start-ups will focus more on industry analysis and their funding goal. Mention the company's corporate structure, its funding requirement, and if you will provide equity to investors.
• Existing businesses and start-ups should highlight any major achievements, contracts, current or potential clients and summarize future plans.

Finalizing Your Business Plan

• This should include financial statements, credit reports, business licenses or permits, legal documents and contracts (to demonstrate to investors that revenue forecasts are secured by concrete business relationships), and bios/resumes for key personnel.
• Elaborate risk factors. There should be a section clearly outlining the risk factors affecting your venture and your mitigation plans. This also indicates to the reader how well prepared you are for contingencies.

• Rework or completely rewrite content to ensure it works from the perspective of the reader. This is especially true if you are creating a "presentation plan".
• Read your document aloud. This allows you to detect if any sentences do not flow together well, and it also makes any grammatical mistakes more obvious.
• Make a copy and give it to a trusted friend or colleague to proofread and provide feedback. You can go online and print a Non-Disclosure Agreement (NDA) for them to sign to help protect your business idea.

• Your cover page should include: The words "Business Plan" centered in large bold font, along with your company name, company logo, and contact information. Simplicity is key.

Help Writing a Business Plan

Expert Q&A

• In addition to this guide, you can follow along with the SBA's Create A Business Plan [14] X Trustworthy Source U.S. Small Business Administration U.S. government agency focused on supporting small businesses Go to source for more in-depth step-by-step instructions. Thanks Helpful 0 Not Helpful 0
• Useful small business resources are available through city and state government agencies. Check with your local Chamber of Commerce, or visit the Small Business Administration (SBA) website at: www.sba.gov. Thanks Helpful 2 Not Helpful 0
• In the case of a startup, you should use a business model canvas according to the Lean Startup method. Thanks Helpful 0 Not Helpful 0

You Might Also Like

• ↑ Helena Ronis. Business Advisor. Expert Interview. 23 January 2019.
• ↑ http://www.entrepreneur.com/article/38290#sec2
• ↑ https://www.indeed.com/career-advice/career-development/parts-to-a-business-plan
• ↑ https://www.cdfifund.gov/sites/cdfi/files/documents/business-plan-outline.pdf
• ↑ https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan
• ↑ https://www.business.qld.gov.au/running-business/marketing-sales/marketing/strategy-planning/writing-strategy-plan
• ↑ https://www.entrepreneur.com/starting-a-business/first-steps-writing-the-executive-summary-of-your-business/241071
• ↑ https://writingcenter.unc.edu/tips-and-tools/editing-and-proofreading/
• ↑ Create A Business Plan

About This Article

To write a business plan for a small business, start by writing an executive summary that briefly outlines your business. Follow that with a company description that explains your business in more detail. You'll also want to include sections on your target customers, how your business will be structured, and what products or services you will offer. Finally, conclude your business plan with a section on your marketing strategy and also a funding request for potential investors. For help writing each section of your business plan, read the article! Did this summary help you? Yes No

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How To Start a Small Business in 8 Steps

A Step-by-Step Guide To Starting a Business

• Determine Your Market Niche

Write a Compelling Business Plan

Form a legal business entity, register your business.

• Explore Financing Options

Hire Employees

• Suppliers, Manufacturers, Vendors

Advertise Your New Business

Frequently asked questions (faqs).

MoMo Productions / Getty Images

Do you have a shiny new business idea you can’t wait to pursue? The prospect of starting a new business can be very exciting, but there are many hoops you’ll need to jump through first. From ensuring the idea is viable to covering the startup costs, here are eight key steps you need to take to start a small business.

Key Takeaways

• Your business idea needs to serve a niche market with demand.
• A compelling business plan serves as an essential guide for your company.
• Register your business and ensure you have the necessary tax IDs, licenses, and/or permits.
• You may be able to finance your startup with funds from government loan programs, grants, investors, or your own savings.
• Advertising will often require a mix of online and offline tactics.

8 Steps To Starting a Small Business

You can start a small business in just eight steps.

• Clarify how your business fits into a market niche
• Write a compelling business plan
• Form a legal business entity
• Register your business
• Explore financing options
• Hire employees
• Find suppliers, manufacturers, and vendors
• Advertise your business

Clarify How Your Business Idea Fits Into a Market Niche

All successful businesses have one thing in common: They’re in demand. To be successful, people must want or need what you’re offering. It’s important to figure out whom your company will serve, which companies you’ll be competing against, and how you’ll stand out among them. You can find those answers by performing market research. The research process should involve looking into your potential market to assess its demand, market size, pricing, economic indicators, market saturation, and where your customers are located.

The next step is to write a business plan that will become the foundation for your company. But what should it include? Here are the main sections the U.S. Small Business Administration (SBA) recommends:

• Executive summary : The executive summary gives an overview of your entire plan in a succinct introduction that is meant to pique the reader’s interest.
• Company description : The company description gives an in-depth explanation of your company, including information about who started it, when it was founded, what type of entity it is, and why it exists.
• Market analysis : The market analysis section gives a detailed look at the industry you plan to enter, your target market, the competition, and your positioning.
• Organization and management : The management and organization section explains who’s on your management team and how each person contributes to achieving the business’s goals.
• Service or product line : The products and services section explains what you’ll be offering to your target market and the value it provides them.
• Marketing and sales : The marketing and sales section outlines how you plan to reach and sell to your target market.
• Funding request : If you plan to seek funding for your business, the funding request section should include how much capital you need, how it will be used, and the details of your current financial situation.
• Financial projections : The financial section lays out your income, cash flow projections, balance sheet, and shareholder equity allotments to show whether the idea is viable and profitable.

Next, decide which legal business entity type is best for your situation. The entity you choose will impact your level of personal liability for the business, how you’re taxed, and more. Here’s a look at the main options for small business owners.

Sole Proprietorship

A sole proprietorship is the default entity type for a business. If you don’t set up any structure, you’ll be a sole proprietor. In short, it means that you and your business are legally one entity. You’ll file a Schedule C for your business along with your personal tax return (Form 1040), and your business income will be taxed along with any other income you earn. If your business is sued, your personal assets could be at risk because you and your business are one and the same.

Filing a Schedule C as a sole proprietor will typically trigger the self-employment tax, which is 15.3% and consists of 12.4% for Social Security and 2.9% for Medicare.

Partnership

A general partnership is a pass-through entity for two or more people who are running a business together. You may want to use this entity type if you and one or more other people are both contributing to the business and sharing in the profits/losses of it. While you must file a return for the partnership each year, the company will not be taxed. All of the tax liability is passed down to the partners’ personal returns. Additionally, the owners have unlimited liability for the business. You’ll also be responsible for self-employment taxes.

Limited Liability Company (LLC)

A limited liability company (LLC) is the chameleon of business entities. It’s created by state statute and can be treated as a sole proprietorship, general partnership, or corporation. If you’re an individual business owner, the default classification will be a sole proprietorship. If you’re in business with at least one other person, the default classification will be a partnership. However, you can fill out Form 8832 and elect to be treated as a corporation in either case. Corporations are treated as independent entities and will have tax liabilities while offering legal protections for the owner(s).

Corporations

Corporations (sometimes called C corps) are recognized as separate taxpaying entities that offer liability protection to the owners. They can be privately held with stock that is shared by the owners or publicly held with stock offered for sale to the public. The major downside of corporations is that they are double taxed—the corporation is taxed on the company’s profits and the owners are taxed on the dividends they receive from those profits. However, qualifying businesses can elect S corp status which removes the tax on the corporation.

Once you decide on your company structure, it’s time to register your business. There are a few things involved.

State Registration

First, choose the home state for your business. If you want to do business in other states, you can register in those as well by completing a foreign registration. While the registration process can vary, you’ll typically need to:

• Choose your business location
• Register your business name and entity type with the Secretary of State
• Register with the required state entities (i.e. tax-filing commissions, departments of labor)
• Apply for any required business licenses or permits

Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a number assigned by the federal government and used to identify your business. You can apply online and get one for free from the Internal Revenue Service (IRS). You may not need one if you are a sole proprietor and/or answer “no” to a series of questions on the IRS website .

Open Bank Accounts

Open a bank account for your business to keep business and personal transactions separate. Consider getting a business credit card to build business credit and earn rewards on your business expenses.

Get Business Insurance

At this stage, it’s also a good idea to look into business insurance to protect yourself and your business against potential liabilities. A business owner’s policy, also known as a BOP, typically includes general liability insurance, business property insurance, and business interruption insurance.

Explore Financing Options for Your Business

Now for the costs. If you don’t have funds to cover your startup costs out of pocket, you may be able to finance them. Many banks and online lenders offer business loans; however, they’ll often want to see some time in business and proof of revenue before they’ll approve you. As a new business, you’ll usually have a better chance with government loan programs, personal loans, or investors.

Government Business Loan Programs

The U.S. Small Business Administration’s (SBA) microloan program offers loans up to $50,000 through SBA funding intermediaries, which can be used for startup or expansion costs. Additionally, SBA 7(a) loans up to $5 million can also be used for startup costs.

Personal Loans

Personal loans or credit cards can also be worth considering. Instead of basing approval on your business track record, they’ll look at your personal credit history. As a result, if you have good credit, you could access competitive rates and terms. However, this shouldn’t be a long-term strategy as it’s best to keep your business and personal finances separate for tax and liability purposes. Further, using personal credit for business will limit the credit you have available for personal needs such as housing costs, car expenses, or family stuff.

You may be able to find investors who believe in you and your company’s potential and are willing to buy stakes in it. These may be private lenders, angel investors, venture capitalists, or even friends or family members.

Consider who you need to hire and whether employees or contractors are better fits.

Employees vs. Contractors

When your business requires hired help, you can opt to bring on employees or contractors . If you hire employees, you have to withhold and pay income taxes, Medicare taxes, and Social Security taxes. You also must pay unemployment tax on their wages. In return, you gain the right to control what workers do and the way they do it.

Contractors are self-employed. You hire them on a contract basis, so you don’t need to pay anything but their fees. However, they retain the right to control how they perform a job.

It’s important to classify the people you hire properly. If the IRS determines an independent contractor is an employee, you could be held liable for back employment taxes.

Setting Up Payroll

If you decide you want to bring on employees, you’ll need to set up a plan for payroll before you start recruiting. According to the SBA, that involves:

• Getting the required tax IDs in place (federal, state, local)
• Providing all new employees with a W-4 form
• Scheduling pay periods to coordinate with IRS tax withholding
• Choosing a payroll administration service
• Knowing the rules for recordkeeping
• Checking the payroll reporting requirements
• Creating a compensation plan for mandatory leave

In addition to setting up payroll, consider additional non-mandatory benefits you want to offer employees, such as retirement plans and health insurance. Be sure to review the federal and state labor laws that apply to you.

From there, you can begin the search for the right team members . You can hire a recruiter to help you, or perform the search yourself. Both online and offline avenues can be effective for finding talent. Online, you can look to platforms such as LinkedIn, Indeed, Monster, job boards, and other professional websites. Offline, you can take steps such as attending job fairs and posting ads in your local area.

Find Suppliers, Manufacturers, and Vendors

Most businesses need help from other businesses in one way or another, whether it’s sourcing materials and products or purchasing communication software and internet service. As a business owner, you’ll need to hunt for the best overall value when choosing your suppliers, manufacturers, and vendors.

A good first step is to identify everything you’ll need to outsource and make a list. Then, you can shop around and compare offerings to strike the right balance between price and quality. If you aren’t sure where to start, ask other small business owners for recommendations and read reviews online.

How do you get the word out about your new business? There are a variety of ways both online and offline.

Build a Website

A website gives your business a digital home base. While you’ll likely want to advertise across many online channels, they should all point back to your website—a web property you own. This will be your company’s main source of truth online and where you’ll want to drive traffic. Further, building a website that’s professional and user-friendly will help you build trust and credibility with your audience.

Social Media Marketing

Social media is a great place to build a presence and attract your target audience. According to the Pew Research Center, 72% of U.S. adults said they were using at least one social media site in 2021. Identify the platforms your target audience uses most, then create an optimized profile and begin crafting content that speaks to your audience and aligns with your brand. Consistency is key when using social media for your business. Over time, you can build a loyal following and continue to attract more customers.

Email Marketing

Email marketing can be used to connect the dots between new leads and loyal customers. Many businesses invite people to sign up for their email lists at the point of sale, on their website, or in exchange for a special offer. You can then use personalized sequences to communicate with your subscribers on a one-on-one basis over time. This allows you to nurture the relationship and provide relevant messaging in response to their brand interactions.

Search Engine Optimization (SEO)

According to a global retail study by Think With Google, 59% of shoppers said they use Google to research a purchase they plan to make online or in-store. If you want to show up at the top of the search engine results for your potential customers, you’ll need to invest in search engine optimization (SEO). SEO involves creating content such as articles and web pages that are designed to show up at the top of the search results for specific searches. You want to fill your website with content that answers a wide range of questions your audience is asking at each step of the buying cycle.

Local Listings

If you run a local business, get listed in various online directories such as Google My Business, Yelp, Bing Places, and Facebook. These are today’s versions of the Yellow Pages and will help people discover that your business exists. Plus, many have review features that can help you establish social proof.

Press Releases

Press releases can help you to notify the world about your business and any big announcements you’d like to make. Again, this can be especially helpful for local companies because you can notify your local news outlets and create some buzz.

While you can reach an audience without paying for ads, ads help you get the word out much faster to more people. You can opt for a variety of channels, from social media sites like LinkedIn, TikTok, and Instagram, to radio stations, billboards, and search engines. The payment structures vary depending on the ad network, but you’ll often pay for impressions, specific actions such as clicks, or the expected reach of the ad.

In-Person Events

While online advertising is highly effective and efficient, there’s power in meeting people face-to-face. You can do so by buying space at a tradeshow or a community event and setting up a branded booth. You can also join local business organizations and networking groups . This can help you meet people in your industry or community, build your network, and raise awareness of your brand.

The Bottom Line

Starting a new business is an exciting venture, yet one that is very involved. From clarifying a viable idea and ticking all the legal boxes to getting your target market to buy, it will require a large investment of time, effort, and capital. However, as a result, you can bring your dream to life and create your own revenue stream.

How much does it cost to start a business?

The amount it will cost you to start a business can vary depending on the type of business you’re starting and your go-to-market strategy. For example, a service-based online business as a transcriptionist is going to have a much lower startup cost than a bakery with a physical location. First put together a list of your startup expenses (both one-time and monthly), then research each of the costs. The SBA provides an editable worksheet to guide you.

How do you start a business with no money?

To start a business with no money, you need a good idea and a strong business plan. Then, you’ll need sales and marketing skills to get others to believe in what you offer. Whether it’s an investor, business partner, lender, friend, or family member, you’ll need to convince someone else to come on board and provide the startup funding . A small business grant program may also be a good match for your situation.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

IRS. “ Sole Proprietorship .”

IRS. “ Self-Employment Tax (Social Security and Medicare Taxes) .”

 IRS. “ Tax Information for Partnerships .”

IRS. “ Single Member Limited Liability Companies .”

IRS. “ Limited Liability Company: Possible Repercussions .”

 IRS. “ Forming a Corporation .”

U.S. Small Business Administration. “ Register Your Business .”

 IRS. “ Employer ID Numbers .”

U.S. Small Business Administration. “ Get Business Insurance .”

U.S. Small Business Administration. “ Microloans .”

 U.S. Small Business Administration. “ 7(a) Loans .”

IRS. “ Independent Contractor (Self-Employed) or Employee? ”

U.S. Small Business Administration. “ Hire and Manage Employees .”

 Pew Research Center. “ Social Media Fact Sheet .”

Think With Google. “ Product Research Search Statistics .”

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How To Scale Your Small Business in 6 Steps

Scaling a business sustainably means being prepared for long-term growth. This guide will walk you through how to scale up your business so you always remain in control of your future.

As a small business owner, your eyes are always on the horizon, seeking out growth opportunities wherever they come. You've figure  how to start a business , now it's time to figure out how to grow it.

Growth is good, but growth isn’t always sustainable. That’s why we’re talking about scaling—growth that is deliberate, long term, and fully in your control.

To scale sustainably means going in with a plan and being prepared to handle any challenge that’s thrown your way. It’s the difference between getting a sudden spike in sales and every process falling apart, and getting a sudden spike in sales and handling every order smoothly with great customer service to boot.

It takes planning, expertise, and sometimes funding to get it done. We’ll walk you through how to craft an iron-clad plan for your future.

Meet your experts

Say hello to two brands that have successfully scaled their business from humble beginnings. We interviewed them for practical advice on scaling that you can apply to your own business.

Katie McCourt, Co-Founder of Pantee

Katie and her sister Amanda are the brains behind Pantee, a line of underwear and bras made exclusively from dead-stock t-shirts and t-shirt fabric. They launched in February 2021 after a successful Kickstarter campaign and have only grown since, adding new products and seeking further investment to keep up with demand.

Sustainability is at the heart of Pantee and plays a role in every part of its supply chain. The brand’s challenge is staying true to that ideal while scaling up.

Matt Mundt, Founder of Hug Sleep

Matt started Hug Sleep with an idea, a dream of entrepreneurship, and $2,500. The Hug Sleep is known as the blanket that hugs you back—a cozy, soothing experience based on the science of weighted blankets. The company has exploded since Matt founded it, thanks in part to an appearance on Shark Tank , where he and his wife, Angie, walked away with a $300,000 investment. 

Matt has had to grapple with a rapid increase in demand for what started as a solo venture he worked on after his corporate job ended for the day.

Signs you’re ready for the next stage of growth

Growth doesn’t just need the right plan, but the right timing. Growing too quickly can lead to expenses you can’t pay, employees you don’t actually need, or a supply chain that’s grown out of control. Conversely, not scaling at the right time could mean orders you can’t fulfill and tasks going unfinished.

Here are a few questions to ask yourself to help you decide if it’s time to make a plan for sustainable scaling.

Are you ready for the next step in entrepreneurship?

You should only take your business to the next step if you’re truly ready for a bigger enterprise. Scaling up means your company is going to take more time, resources, and expertise that you have to be prepared to give. Scaling up is an exciting time, but you’ll need a level head to get it done in a way that’s sustainable for your business. 

Ask yourself:

• Are you ready to take on more strategic challenges? That could mean expanding your product lines or selling globally.
• Will you be able to dedicate more time to your business without other parts of your life suffering?
• Do you have the financial resources available that you’ll need?
• Do you need outside help? You may be at a point where having someone else handle marketing or customer service would make your day easier.
• Do you need more employees to get the work done? Struggling to make your business work with your current team—which might be a mighty team of one!—is a great sign that it’s time to scale up. 
• Are you having trouble keeping up with orders? Having a higher volume than your business is prepared to handle means falling behind on packaging and deliveries, customer service gaps, and a whole lot of stress for you. 
• Are you falling behind on inventory? If you’re constantly finding yourself sold out, with customers clamoring for restocks, it’s definitely time to scale up.

Lastly, some businesses are meant to be small businesses. It’s OK if you want your side hustle to remain a side hustle. It all comes down to your personal priorities, lifestyle, and financial situation. 

6 steps to scale your business

There’s no one formula for scaling a business, because every business—and founder—has unique strengths and challenges. Scaling up a clothing business, for example, is going to look different from scaling up a skin care empire. But there are some common threads to consider:

1. Make a plan for your future

If your company started as a hobby , like in Matt’s case with Hug Sleep, you may have just been going with the flow up until this point. 

However, to scale sustainably, you need a business plan. It will not only help you understand your business, but it will be something you’ll need to show if you ever seek out outside investment. 

There are different ways to format a business plan, but a basic one should include:

• Executive summary
• Company description
• Market analysis
• Management and organization
• Products and services
• Customer segmentation
• Marketing plan
• Logistics and operations plan
• Financial plan

In particular, you’ll be creating a strategic marketing plan, with a forecast for the future outlining your plans for growth. What’s a realistic revenue goal for a year from now? What about five years from now? What’s your plan for increasing your marketing capacity?

“That was actually a really valuable part of the process for us—sitting down and saying, ‘Where do we want to be? Where do we want to be in five years? What do we see from this business? And where do we think it can go?’” says Katie.

“I think that, from day one, we’ve really felt that Pantee has huge potential to become a household name brand.”

Nail down where your business is right now, as well as where you want your business to go. Use the resources below to get started and consider the next steps in scaling as you create your plan.

📚 Resources

• How to Write the Perfect Business Plan in 9 Steps
• Business Plan Template: A Practical Framework for Creating Your Business Plan
• 7 Business Plan Examples to Help Write Your Own

2. Evaluate your supply chain

Scaling up means a higher volume of sales and your supply chain needs to be equipped to handle that. What works right now might not work as well at scale.

Pantee, for example, was originally inspired by creating underwear from thrifted t-shirts. They then turned to dead-stock t-shirts, but they can actually be slower to process. Already-made shirts take longer to cut and evaluate for quality, so the brand has since expanded its source materials.

“We don’t just use the dead-stock T-shirts, we also use dead-stock rolls of fabric,” says Katie. “It’s the exact same grade of material, it’s just taken at a different point in the supply chain.”The fabric rolls allow for faster production but with the same commitment to sustainability. It’s even become a feature—getting their hands on a particular color lets them create a limited time collection drop that customers snap up.

Pantee goods are manufactured in Bangladesh at a factory with working conditions that Katie and Amanda vetted, but going overseas might not be the right move for your supply chain.

Matt scaled Hug Sleep while remaining with the same manufacturer in his home state of Wisconsin. In fact, a more local approach can help ease the stress that the COVID-19 pandemic has placed on global supply chains.

In either case, evaluate whether your current sourcing and manufacturing processes still function well at scale. If not, you’ll need to figure out next steps .

3. Hire strategically

Scaling up means you may no longer be able to do everything yourself, or with whoever you’ve recruited so far to make your business work. 

Katie says Pantee has been running for the last year or so with just her and her sister as full-timers, supported by contractors. With a round of investment under their belts, Pantee is about to take on its first full-time employee.

Specifically though, they decided the most impactful choice was to hire someone to take care of brand and community management.

“Our strategy is very heavy on influencer marketing, ambassador marketing, and our partnerships, and it’s a very, very time consuming element of the business,” says Katie. Taking that workload off Katie and Amanda means more time back to focus on the core of the business.

If hiring is part of your scaling strategy, you should hire where an extra person would be most effective. For Pantee, it was marketing, but for your business it could be someone to work on product or customer service , or sales. Employees are a major financial commitment, so they should be focus on an area that will bring in the most return.

“We’re really excited to see what we can do sort of with an extra 40 hours a week put toward the business,” says Katie.

4. Outsource for efficiency

If it doesn’t make sense to hire your own employee, there are ways to outsource tasks to streamline your business as you scale. Matt, for example, doesn’t have any full-time employees. Instead, he uses an agency to handle all his marketing because he realized it was something a third-party would be better at.

“My background is in mechanical engineering,” he says. “I’m a numbers guy and a data guy. I thought there’s no challenge that I can’t get over.” So Matt tried to teach himself how to launch ads on Facebook, Instagram, and Google.

“I tried, and it didn’t work all that well.”

By talking to agencies, Matt finally realized that they could create a more sophisticated campaign than he could, so he outsourced.

He also hit a wall on order fulfillment . He used to pack all the orders himself and drop them off at the post office on his lunch breaks. But that doesn’t work at scale. He now uses the Shopify Fulfillment Network to do the heavy lifting.

Whether hiring an agency or an employee, you should consider where you most need help. If you’re struggling with marketing a small business, it’s only going to get more challenging as you scale up. Decide what aspects of your business would benefit from expertise you don’t have and look into third-party services that can help you out.

5. Automate where you can

Getting things done faster or more efficiently at scale can be made easier with tools designed to automate your workflow.

These can be simple fixes, like how Matt created scripted responses to deal with a heavy influx of customer service inquiries after he appeared on Shark Tank . 

Another example for streamlining customer service is using Shopify Inbox for communicating with customers. This tool allows you to utilize live chat—which we know is a fantastic way to increase conversions —in a way that keeps all your conversations in one place, allows for saved responses, and gives you metrics so you can track impact.

Check out these handy bots to learn more about how to automate your business.

6. Seek new capital

Scaling costs money, and you might need to identify the right time to seek outside investment to see your plans through and keep your cash flow flowing.

That timing is crucial. Capital is something you want to secure before you act on plans to grow, rather than when your business takes off and you’re left scrambling for the funds to support it.

Katie knew early on that Pantee would need investment beyond that initial Kickstarter campaign.

“With what our goals were, and the sort of early traction that we had seen, we knew very early on that it was not something that we could do ourselves and continue to bootstrap,” she says. “As much as it really works for some businesses, I think, for ours, it was just too out of scope for us.”

Last September, Katie and Amanda started trying to raise the £200,000 ($261,000) they projected they’d need.

“It's a difficult process. I think that we both found it to be one of the most challenging things that we’ve done,” she says.

The pitching process means having a solid plan (which is why a business plan was the first step) and fielding question after question from potential investors. Expect some ups and downs—Katie said some pitches went better than others, but they did reach their goal in the end. Once they started hearing “yes,” it gave them confidence to go out and pitch more.

Matt, on the other hand, made a big splash by appearing on Shark Tank . The show actually approached him, and he walked away with a $300,000 deal from two of the sharks.

Capital is something Shopify can help with. The Shopify Capital program is a way to secure funds that skips lengthy applications and allows you to repay using a percentage of your sales. Since 2016, Shopify Capital has made over $3 billion available to thousands of Shopify merchants, and our data shows that shops with this funding average 36% higher sales .

We also know that women and people of color have more trouble securing capital , and Shopify Capital is working to close that gap. 

Don’t lose the big picture

There’s a reason you’ve gained the traction you already have, and you can’t lose sight of it, even as you scale.

Long-time customers of Pantee are drawn to its commitment to sustainability, so they remained committed to that philosophy. To do away with any of that while scaling would defeat the purpose of trying to grow your business and impact.

Katie says Pantee doesn’t see their relationship with customers as purely transactional—they’re a community. The brand’s early customers, the ones who’ve come along for the whole journey, are a pillar of support that have helped it get where it is today.

“Don't undervalue your community,” Katie says. “Ask them for guidance to really bring them on that journey. It does really pay off.”

Do right by your biggest fans and they’ll stick around as you shoot for the stars.

Illustration by Alice Mollon

Scaling a Small Business FAQ

How do you scale a small business.

• Increase Your Marketing Budget: One of the most effective ways to scale a small business is to invest more money in marketing. This can include everything from increasing your social media presence to launching more targeted advertising campaigns.
• Automate Your Processes: Automation can help you save time, reduce costs, and free up resources to focus on new growth opportunities. Consider automating tasks such as customer service, accounting, and inventory management.
• Focus on Customer Service: Providing excellent customer service is a surefire way to scale a business. Make sure your customer service team is well-trained and equipped to handle customer inquiries and complaints quickly and efficiently.
• Invest in New Technology: Investing in new technology can help you streamline processes and increase efficiency. Consider implementing new software solutions that can help you increase productivity and better manage your business operations.
• Hire More Staff: If your business is growing, it may be time to hire more staff. This can include hiring additional customer service agents, salespeople, marketing professionals, and other administrative staff.

What is a scaling strategy?

What does it mean to scale a business.

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Tips for Scaling Your Business

• 07 Mar 2019

As your company grows in scope and size, it also grows in complexity—which can be hard for any founder to navigate. Yet it’s likely that the scaling challenges your company is facing aren’t unique to you and your business.

By understanding what the common scaling challenges are, you can start to recognize patterns and avoid the issues most founders face as they grow their startups.

Access your free e-book today.

What Is a Scaling Plan?

At the beginning of a business, it can seem premature to start thinking of its growth potential. Yet, not laying a foundation early for future growth will likely lead to several avoidable challenges. That's why it's important to create a comprehensive business plan that accounts for your company's current status and potential expansion.

Creating a scaling plan allows you to prepare for potential customers and future business opportunities, ensuring sustainable growth in your company.

How Businesses Fail to Scale

The key to avoiding failure as a company grows is ensuring that business leaders agree from the very start on what its products, ideal customers, and internal processes are. Solidifying these is critical before scaling up, as they clearly define a company’s business model. Failing to do this step is one of the primary reasons some startups fail in the scaling process, as they didn’t have a clear vision of where their company should’ve gone before the unprecedented growth took place.

“If you develop an understanding of the archetypal challenges associated with rapid scaling, you can build in design for scalability,” says Harvard Business Professor School Professor Jeffrey Rayport. “There are decisions you can make early to mitigate risk.”

When asked what those challenges are, Rayport breaks them down into what he calls the “Six S Framework.” Or rather, the six areas founders should focus on when building their venture . They're:

• Shared values

Here’s a closer look at what each area means and its potential impact on your growing business.

Applying the Six S Framework

You can’t scale your venture alone. You need a team of talented, highly motivated staff who believe in the company’s mission. For resource-constrained startups, the right talent can change everything: High performers are 400 percent more productive than the average employee, according to McKinsey . As roles grow in complexity, that productivity number jumps to 800 percent.

When a company is in a rapid growth phase, it often feels easier to hire anyone who can get the work done. But as Apple Founder Steve Jobs once said : “Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B and C players.” If you compromise on talent early, it’s harder to backtrack.

“You need to set a high bar for the first few recruits in the venture,” Rayport says. “You can’t compromise on that first wave, because they’ll be the ones who propagate the values of your organization. Pretty soon, they’ll also be hiring the next wave and hire performers who are a lot like them.”

Related: 4 Challenges to Avoid When Scaling Your Venture

2. Shared Values

Shared values represent a company’s culture, and are what defines how employees interact, solve problems, and work with one another, according to Rayport. As individuals encounter challenges and learn how to collectively address them, particular patterns are reinforced and ultimately coalesce into shared values and beliefs about how work gets done.

“Most startups have a culture that is a direct reflection or translation of the founders’ personalities and values,” Rayport says. “And most founders are largely unaware of the outsized impact they have in instilling the culture of their organization.”

One of the biggest scaling challenges around culture is de-personalizing the company’s core values, so they feel less like mantras shaped by a few individuals, and more like a shared organizational fabric.

“You need to make those implicit values explicit and take the time to write them down,” Rayport says. “It’s important to separate cultural inputs from outputs. Most ventures describe the culture they want, which are the outputs, as opposed to determining the actions founders can take, or the inputs, to deliver on that culture.”

3. Structure

How you structure your organization is crucial to success. As the company grows, so, too, should the number of decision-makers. The founders can’t be involved in every detail of the business once it scales. It’s important to recruit seasoned leaders with specific skill sets or develop employees who can thrive in environments with more specialized roles.

Training new employees can feel like additional work, but taking the time to properly onboard them pays dividends later. It’s all about creating leverage to deliver on the founders’ vision—and that requires not only recruiting the right people, but structuring their roles and the organization in ways that favor growth. If you don’t let go, your organization won’t scale.

Amazon CEO Jeff Bezos encourages failure. As he once wrote in a shareholder letter, as reported in Business Insider , “Failure comes part and parcel with invention. It’s not optional. We understand that and believe in failing early and iterating until we get it right.”

Once you have evidence of product-market fit, it’s important to stop and assess how fast you can, and should, grow.

“A lot of tech ventures assume you should swing for the fences and grow as fast as humanly possible,” Rayport says. “But there should always be the question, ‘How fast is too fast?’”

Most ventures accumulate “ technical debt ,” which is the price of scaling what works rather than what’s perfect. Over time, tech debt adds up and it’s critical for leaders to find ways to pay it down. That’s the only way you can create the robust business systems and stable infrastructure needed to support increasing scale.

“It’s better to pay down your tech debt as you scale,” Rayport says. “If you have a market opportunity, you don’t want to wait a few months to get your house in order. But sooner or later, you have to upgrade the systems and infrastructure. As Marshall Goldsmith famously said, ‘What got you here won’t get you there.’ It’s important to recognize that each stage requires its own set of approaches.”

On the other side of speed is scope. Rather, where do you look for opportunities? At what point should you consider expanding into new geographies or markets, or building additional products or services? It’s easy to lose focus when you start to scale, but having a map of growth options helps.

“One way to start categorizing your options is by asking, ‘Will I grow by extending existing products into new markets or by selling new products to existing markets?’” Rayport says. “Make decisions rigorously to set your path.”

6. Series X

Financing is one of your most valuable resources, and it’s important to understand how your financing strategy aligns with your growth strategy, according to Rayport. Hiring additional employees and building out the right infrastructure and business processes typically require capital. You need to know what kind of financing is necessary to support that growth and where you can cut costs.

“Founders often make the ill-advised decision to convert variable costs into fixed costs too early,” Rayport says. “For example, many e-commerce ventures have rushed too quickly into owning their own fulfillment centers rather than relying on third-party vendors.”

What fixed overhead can your organization bear while still having maximum agility? Rayport uses the cloud as another example of how companies can keep fixed costs variable. Is owning a data center crucial at this stage of your growth?

If there’s a market shift or downturn, your company should be poised to adapt and respond. Without a flexible cost structure or the right financing, that’s nearly impossible.

How to Prepare for Scaling

As an entrepreneur, it’s critical to anticipate your business’ growth. It’s one of the most important business strategies on your path to success. Preparing for this change involves having the right individuals who are attuned to the company’s mission and agree on its values and strengthening the company’s internal structure and processes for unprecedented changes. By applying these key areas to your business, you can rest assured the company is equipped to handle any measures of success, no matter the capacity.

As Rayport says, “A lot of businesses don’t anticipate scale.” But by understanding what the common challenges are, it’s something you can, and should, start to plan and prepare for.

Do you want to master a proven framework for building and financing new ventures? Explore our four-week online course Entrepreneurship Essentials , and discover how you can learn the language of the startup world.

This article was updated on July 28, 2022. It was originally published on March 7, 2019.

About the Author

19 Small Business Ideas For 2024

Updated: Apr 19, 2024, 7:21pm

Table of Contents

1. tutoring, 2. music and voice lessons, 3. bookkeeper, 4. pet care services, 5. subscription box service, 6. dropshipping website, 7. dog grooming, 8. copywriter, 9. copy editor, 10. wedding or events planner, 11. photographer or videographer, 12. home cleaning, 13. personal trainer, 14. sewing and alterations, 15. virtual assistant, 16. college consultant, 17. antique sales, 18. life insurance agent, 19. life coach, frequently asked questions.

Every day, hardworking individuals choose to step away from their employers and start their own companies. Small businesses launched by everyday entrepreneurs have added over 12.9 million jobs to the United States. economy in the last 25 years. If you’re looking to join the fray but aren’t sure which path is best for you, here’s a list of 19 profitable small business ideas.

If you’re a master of a particular subject, you can help students struggling in their classes by becoming a tutor. No certification is required to become a tutor, but you should be an ace in the topic. Usually, a tutor has a college degree in the subject they are tutoring.

You can teach in person or online to expand your target market. You may want to invest in some teaching aid tools, such as Canvas or Blackboard. These will help you interact more effectively with online students. You can market yourself or join a tutoring platform, such as BuffTutor, that brings clients to you.

Tutoring is an excellent way to make some money while enriching the lives of the next generation.

Are you skilled with a musical instrument, or do you have golden pipes? Do you love teaching as well? Sharing those skills with others can help foster a love of the arts. You can either set up a studio at your home or travel to your clients’ homes, depending on what works best for your situation. The flexibility means the possibilities here are endless.

You can market yourself to local schools or community theaters where parents are looking to get their kids music or voice lessons. A good teacher quickly gets word-of-mouth referrals for new business, which helps reduce the amount of marketing that you need to do.

Learn more: Find the right scheduling app to keep your sessions organized.

If you’re someone who is great with numbers and pays attention to the little details, starting a bookkeeping business might be a viable idea. Bookkeepers sell their services to small businesses that need help managing the books, preparing payroll and gathering data for taxes. You would need to be very well-organized and understand the inherent liabilities that can come with handling someone’s finances; make sure you form an LLC if you choose this route.

While you don’t need specific credentials to become a bookkeeper, getting something, such as the QuickBooks Bookkeeping Certification, will not only teach you a lot but will also give potential clients confidence in your ability. However, it might cost you as much as $450 to obtain the certification.

A dog walking business is an excellent opportunity for someone who loves dogs and is good with other people’s dogs. You get out every day and enjoy fresh air with grateful pups. This business requires you to go to people’s homes to let their dogs out to play or go for a walk. You don’t need any special credentials to be a dog walker, and since you’ll be using your clients’ leashes, you don’t need to invest in much. Primarily, you should purchase items, such as dog treats and waste bags, so that you are prepared for any situation.

If you live in a rural area where clients are spread out, you could pursue the option of offering more generalized pet-sitting services for those who are on vacations or business trips. The income for this type of service may be less consistent, but it’s an excellent fit for someone with experience handling different types of animals. Many small critters, such as birds, reptiles and fish, require very detailed care that their owners don’t trust just anyone to handle. If you can build a reputation for taking good care of these pets, winning new clients will come with ease.

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Subscription boxes are a hot trend right now. There are subscriptions for anything and everything, including vitamins and contraception. If you have an idea for a subscription box, you could have the next hot trend.

You’ll want to establish a website where customers buy your box. At the end of the month, you send each customer a curated box of goodies. While you can often purchase these items based on the demand, you may need to carry some inventory of certain products. It will all depend on your subscription box.

A dropshipping website promotes products that it doesn’t keep in stock. Instead, it has a deal with a distributor who will take your orders and mail them to your customers on your behalf. This eliminates the cost of having inventory and expands the number of products that a business owner can market and sell.

To start a dropshipping business , you’ll need to find relationships with dropshippers. There are big companies that have thousands of products, such as Oberlo and Alibaba, that do this. You’ll also need to create a website that features the products. Getting started may cost you $500 to $1,000 if you need help setting up a website.

Dogs’ coats need regular care, and dog grooming is a service that is in high demand. Washing dogs, trimming their nails and clipping their fur must be done as often as every 4-6 weeks for some breeds. While you can do this in a client’s home, most groomers have either a retail location or a mobile pet salon where they have all their supplies and tools.

To have a complete setup, a mobile pet grooming van may cost anywhere from $10,000 to $100,000. If you’d prefer clients bring their pups to you, converting a shed into a grooming salon may be a more convenient option.

Just about every business has an online presence, most with some sort of blog or distributed content. This content needs to be written, and most business owners don’t have the time to do this themselves. They hire a professional writer. If you have a passion for certain topics, an ability to do deep research and are a good writer, this can be a profitable business for you.

There are no startup costs other than having a computer with a good internet connection. Many writers market their services on LinkedIn or in business social media groups. You can also reach out to the marketing director of businesses to offer your services.

With hundreds of blogs and content streams starting every day, there’s a huge demand for reliable editors who can ensure high-quality content goes live. If you have an eye for grammar and punctuation, you might consider becoming an editor who reads and helps improve content. And you don’t have to be limited to blogs or social media; you can edit books and print articles as well.

Make sure that you are a grammar stickler and that you know the differences between AP and Chicago-style writing. You’ll want to invest in these manuals so that you can help your clients meet the right style guides. Other than that, you only need your computer to start this business. You’ll market yourself in online groups and may choose to invest in building a website to help promote your new business.

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If you’d love to help make a special day as memorable as possible, the events business is very rewarding. Those who organize these events should have strong networking skills, pay close attention to details and be highly organized. It helps to have a creative edge that enables you to come up with new and exciting ideas for your clients.

If you want to focus on weddings, be prepared to help with all aspects of the wedding, from the decorations and venue to entertainment and food. While you don’t need any licensing or credentials to do this, you want to have a Rolodex of professionals who can fill certain roles at the event.

Learn more: Use CRM software to keep your vendors and your clients organized.

This is a great business for a creative person with an eye for composition. You can be a generalist or niche down as a wedding videographer or family photo session provider. You don’t need any specialized certifications to start a photography business or start producing videos.

However, you do need a high-quality camera and may also want to invest in lighting accessories. To start a videography business, you’ll need a good digital video camera, lights, microphones and bounce boards to help you get the best quality footage. You should also launch a website that shows potential clients your portfolio of work.

A home cleaning service business is an excellent idea for detail-oriented people who want to be solopreneurs or who want to grow to have a team. As a home cleaner, you go to people’s homes and clean the kitchen, bathrooms and all other rooms. You’ll dust, mop and vacuum rooms and make sure that sinks, toilets and tubs are clean.

You don’t need to be licensed to be a home cleaner, but it’s a good idea to get bonded and insured . This gives clients confidence that you are a professional. As far as investment goes, you will want to have your own cleaning tools and supplies so that you don’t rely on clients to provide them—though some will.

A personal trainer helps people meet their fitness goals. As a trainer, you are part workout expert and part motivational expert. You help develop workout plans to help people either lose weight, build muscle or meet other fitness goals. Certification is required if you plan to work at a gym and will also help you build your credentials to get new clients.

A certification might cost you anywhere from $500 to $1,000. Many fitness trainers also have degrees in kinesiology from a university, but this is not required.

If you’re talented with a needle and thread, you could have a business sewing and making alterations for others who don’t have this skill or the tools to do it. While you may be busy with alterations, the real money is in custom jobs for dresses and costumes. If you live near a thriving Renaissance fair or convention center, you can expect to find plenty of potential customers dressing up for events at these locations.

You don’t need any certification to become a seamstress or a tailor. You will need to invest in a good sewing machine and get materials and supplies that you use when working for clients. Advertising your services on-call or even setting up “emergency” booths at costumed events can bring you new clientele from those in a bind.

More business executives are turning to virtual assistants (VAs) to help them with certain business tasks. This saves the business money because they don’t need another full-time employee with benefits while still getting the work done. As a VA, you will do certain tasks, such as managing social media, coordinating travel and maintaining the calendar.

There is no prerequisite to becoming a VA. You just need to be good with people and have keen organizational skills. You’ll want a computer with a fast internet connection to service your clients.

Parents will do whatever they can to help their children get into the college of their dreams. This includes hiring a college consultant who can help prepare them for standardized tests, review personal statements and navigate the world of financial aid and scholarships.

There is little to no overhead as a college consultant. You simply need a computer and a good internet connection. While there are no required certifications, the College Consultant Certification from Heartland Institute can help give you credibility in a competitive market.

You might love going to garage sales and auctions. This hobby can become a business where you buy antiques and then resell them after freshening them up with some paint. You may even work on consignment for clients to limit your cash outlay.

This is a business where you can work from your garage or invest some money and open a storefront. The cost will depend on your location and the size of the store.

If you’re passionate about helping families prepare for the worst-case scenario, then you may be highly fulfilled working as an independent life insurance agent. You’ll work with people to help assess their life insurance needs and find the right type of coverage. You’ll become their main point of contact for sales and service.

To become a life insurance agent, you must pass a state licensing class and a standardized test. Once you do that, you’ll need to get appointed with life insurance companies to offer their products.

A life coach helps people navigate through difficult times in their lives. Coaching may come into play for relationships, parenting or other challenging life transitions. A life coach has a lot of experience and can bring that experience to the table to help people successfully navigate through their troubles and blocks.

While you don’t need a certification to become a life coach, it does help to give you credibility in what you do. A certification may cost you anywhere from $500 to $1,000, depending on where you get it from. The International Coach Federation offers a three-day, accredited program that is $995.

Bottom Line

If you’re ready to start a small business , start with what you’re passionate about and what you already have skills in. You may need a certification or to buy some tools and equipment, but many small businesses can be started for under $1,000 .

How do I start a small business with no money?

There are several funding sources for new businesses and most require a business plan to secure it. These include the SBA , private grants, angel investors, crowdfunding and venture capital.

How can you get money to start a business?

While it takes some work to apply and there’s no guarantee of funding, there are many different types of grants for small businesses available. Competition here can be fierce so make sure you send applications to a variety of sources. Usually, each state has its own programs, but there are also national foundations and organizations that offer grants specifically to minorities . If grants don’t work out, you can always pursue business loans or private investors.

What is the best way to get a business loan?

Online lenders tend to be more flexible than traditional banks, so you may consider shopping around for different rates before applying. Pay close attention to eligibility requirements and repayment terms, and carefully read consumer reviews to gauge the lender’s reputation. Check out our list of the best small business loans to see some of the top lenders.

What is the easiest SBA loan to get?

Small Business Administration (SBA) microloans are the easiest to get because they have little in terms of revenue requirements and are designed for new businesses needing a small amount of capital.

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Kimberlee Leonard has 22 years of experience as a freelance writer. Her work has been featured on US News and World Report, Business.com and Fit Small Business. She brings practical experience as a business owner and insurance agent to her role as a small business writer.

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Small Scale Business Ideas That Can Make You a Millionaire in 2022

Last updated on: November 21, 2022 by Piyush Shah

Looking to start a small scale business, but haven’t hit upon the big idea yet? The good news is, it’s easier now than ever before. Here are 50 low investment small scale business ideas for you to choose from.

In World Bank’s Ease of Doing Business Rankings, India has jumped 14 places and ranks 63 among 190 countries. Quite a leap! And this leap can be largely attributed to digitization – be it the paperwork to set up a company or selling your products.

If becoming an entrepreneur has always been your dream, now is the time to chase it. We can’t tell you what, why, and how. But we can surely help you figure it out.

Why start a small business?

1. candle-making, 2. cloud kitchen, 3. home baker, 4. social media influencer, 5. digital marketing agency, 6. t-shirt business, 7. personalised gifts, 8. tiffin centre, 9. organic farming, 10. share trading, 11. toy shop, 12. insurance agents, 13. online tuition classes, 14. babysitting, 15. pet-sitting, 16. pet grooming, 17. lamaze educator, 18. salon services, 19. organic and natural cosmetics, 20. antique business, 21. tarot card reading, 22. party planner, 23. wedding planner, 24. fitness trainer, 25. handmade soap business, 26. co-working space, 27. homemade chocolates, 28. home-cooked snacks, 29. freelancer, 30. photo business, 31. landscape designer, 32. yoga instructor, 33. dance classes, 34. masala-making, 35. real estate agency, 36. general store, 37. recruitment agency, 38. tax & accounting service, 39. seasonal business, 40. dropshipping, 41. web & app developing service, 42. drone camera services, 43. catering services, 44. maid-for-hire business, 45. photocopying & printing shop, 46. electrician services, 47. mobile garage service, 48. travel agent, 49. spoken english classes, 50. rural handicrafts shop, what is a small scale business.

A small scale business has the following characters:

• Comparatively lower revenue and profitability
• Smaller size of teams/ employees
• Covers smaller markets
• Run as a proprietorship or a Limited Liability Partnership

Start small, grow big! That’s the mantra of a small business. Below are a few of the typical benefits you’d reap if you own a small business:

• Be your own boss (everyone’s dream)
• Low capital investment
• Easy to start/set up
• Low risk of failure
• Favourable government and bank schemes
• Tax benefits

With the basics out of the way, let’s dive right in.

Small Scale Business Ideas in 2022

While many of you might have thought of starting your own small business, the struggle to choose the ideal low-investment business is real. There’s no real formula to arrive at that perfect big idea.

So, here’s a list of 50 small scale business ideas that you could get off the ground and running easily:

Increased use of scented candles in the Indian households has contributed to its booming demand. But more importantly, it’s easy to produce! Just 4 ingredients – wax, essential oil, wicks and a mould – and you are good to go.

You can sell the home-made candles online. Candle making business can help you easily earn about INR 20-25K a month.

If cooking lip-smacking food is your thing, you could start a cloud kitchen business from your own kitchen.

All you will need is a functional kitchen (of course) and a smartphone. Thanks to food delivery apps, and platforms like Dukaan, promoting your business and reaching your customers is quite easy.

Love baking? You could consider turning this love into a lucrative business. Zero in on your USP (healthy/keto/vegan/thematic), invest in a good oven and stock up on ingredients – you are all set. Set up an online store and voila! You are running a profitable business before you even realize it.

Are you a creative thinker? Do you enjoy creating unique content? You could have an influencer hidden in you. Start off on social media and engage with your followers consistently. If your content is engaging, you will soon build a follower base.

With collaborations and promotions done smartly, you could be an asset to any brand fetching you big monies and some enviable PR packages.

By the end of 2025, the digital market will grow at a CAGR of 27.4% to surpass the INR 50,000 crore mark. If you know the nuances of digital marketing, and can build or efficiently use available resources like writers, designers, developers, social media managers and search engine marketers, you can start a digital marketing agency. You can also get web hosting for agencies and sell hosting services to your clients.

Since it’s all online, you don’t have to invest in getting an office. That part could come later as and when the business grows.

T-shirts are very versatile – flaunted by all age groups. Has a wide customer base and thus makes for a good and profitable business idea.

India has some hubs like Tirupur where you could source the t-shirts from. You could then print your designs, brand them and start selling clothes online .

Exchanging gifts during festivals and special occasions is an integral part of Indian culture. With more people wanting to be creative when it comes to gifting, there is a demand for unique and personalised gifting concepts.

Handmade, sustainable, and conscious gifting is gaining popularity, making it a great small scale business one could run from home. Finding and working with the right vendors is key in this business.

Many cities are home to young working professionals who have migrated from smaller towns for better job prospects. With many resorting to home-cooked healthy meals, the surge in demand for tiffin centres or home-based tiffin systems is quite apparent.

The Indian restaurant industry is worth INR 75,000 crores and is growing at an annual rate of 7%. Leveraging this opportunity to start a small tiffin center could help you reap good profits. You could provide monthly meals comprising simple menus.

Tiffin center is one of the best small scale business ideas for housewives .

Love farming? Proud of your home-grown produce? You could easily make a profitable business out of it. Organic farming is catching up as people become more conscious about the quality of food they consume.

Consumers are even sourcing directly from organic farmers to ensure that the fruits and vegetables they consume are free from any harmful chemicals/ pesticides. The organic lifestyle is here to stay, and it is the right time to leverage this awareness and turn your love from organic farming into a successful business – win-win!

Good with analysing numbers and patterns? You could play some big games with share trading! Start with investing a small sum. The best part is you could always have this as a side hustle as share trading happens only a few hours a day. This means less time. You could even consider taking some online trading courses to mitigate risks, before you get started.

A small toy shop near a residential area is a very good business idea which requires very limited capital. Keep some unique and different toys to make the business a successful one.

You could take the same business online to reach a wider audience.

Check out the famous colorful wooden toys of Channapatna – you could identify a niche and find sellers accordingly.

Many people start off as part-time insurance agents while managing a permanent job. But some are good and confident enough to make insurance selling a full-fledged business.

And if you are one of those this is the best time to make the jump.

In India, the overall market size of the insurance sector is expected to be US$ 280 billion in 2020. The life insurance industry is expected to increase at a CAGR of 5.3% between 2019 and 2023.

Expertise in a subject, a webcam or a smartphone, and a good internet connection is all you need to start online tuition classes .

The pandemic has taught us that online teaching can be just as effective.

So if you think you have all the qualities that make you a good teacher, taking online tuitions could be the perfect venture for you.

Slowly workplaces are opening up, but schools are still shut. Working parents are in desperate need of babysitting.

You can fulfil this need with a babysitting business. You only need to invest time to become a babysitter if you are doing it yourself.

This is an excellent business idea for young girls and non-working women .

Just like babies, pets also need care and attention which you can provide by starting a pet-sitting business.

If you are a genuine animal lover and enjoy spending time with pets, you can promote yourself on online platforms like Waggle . Customers can drop their pets off with you when they are out of town.

Pet sitters get paid upto INR 1500-2000 per day depending on the size of the pet. Pet-sitting makes for a great small scale business as you could start it off with absolutely without investment!

Pet grooming is yet another growing market like pet sitting. Pet owners go to great extent in ensuring their pets’ well .

From spaws to pawdicures – pet grooming has grown into a full-fledged and a sought-after service.

With a minimal investment in a place and pet grooming equipment, you could be a lucrative business owner.

Lamaze is essentially a set of natural birthing techniques and related exercises that ease natural delivery.

Lamaze educators need to be specialized in their field and certified to practice. This is an excellent small scale business idea, provided you have a genuine interest and relevant expertise to venture into it.

Today there are very few institutions in India that are offering a certified course in Lamaze.

But with national and international celebrities like Kalki opting for natural birthing and setting a trend, we foresee a surge in demand for this one.

If you have a natural flair for make-up/ hair styling/ grooming, offering these services could be a great idea.

The pandemic has forced people to stay indoors but grooming is something that one needs regardless to feel good. This makes at-home services even more sought-after.

If you are good at head massages, or any salon service – you could promote yourself on platforms like Dukaan. Promote your personal brand on social media and you will see busy days ahead! You could invest in a short-term beautician course if you will.

Organic and home-made cosmetics are hot and trendy. With many people fighting against brands that test on animals and use harsh chemicals, there is a demand for ethical brands. Vegan, cruelty-free, natural, and handmade beauty products and brands are becoming instant hits.

Many brands like Neemli Naturals, Ilana Organics and Just Herbs have seen a lot of success in very less time. If you have been championing self-made beauty products for your own skincare, it’s time to take it to the market too!

Antique business is quite a flamboyant business. It could be both small-scale or large-scale. If you have access to antique furniture and artifacts, you can open a small shop or simply sell online .

You will need to build a network to be able to participate in auctions or bulk-buy. Establishing your brand may be tricky but the returns/margins are quite high making it highly profitable.

Tarot card reading is a west-influenced trend in modern India. We humans are curious creatures and at times people tend to resort to techniques like tarot card reading to predict their future.

However, one needs to have a knack for it, and will need to complete professional tarot card reading courses to be able to lawfully practice.

Successful tarot card readers charge upto INR 5000 for a half an hour session in India. If you find it interesting and are ready to invest in a professional course, you could be a popular tarot card reader in just about months.

No matter what, celebrations don’t stop. People find a way to party for the smallest of reasons we love that spirit! From PJ parties to thematic parties and everything in between – planning is something that goes behind all of it. And if you want the easy way out, you just outsource it.

Many people can afford to just outsource the painful part – the planning and management part.

So, if you are the kind who enjoys meticulous planning and ace vendor management – you could have some real fun turning it into a small-scale venture!

A wedding is no small affair in India – it survives almost any adversity, be it recession or a pandemic! Weddings will continue and when there’s a wedding, there has to be a planner. Social media channels like instagram and pinterest are only setting the bar high.

The new-age weddings are planned to the T with no scope for any miscalculation. If you love the high energy work and organization that goes behind someone’s life event – you could make this lucrative business your own!

What’s more? Wedding planners are paid quite handsomely making it highly profitable.

Who doesn’t want to be fit today? From Keto to intermittent to paleo – people are leaving no stone unturned to stay fit and look good!

Many hire one-one fitness trainers who push their clients to follow a strict regime and get fit faster. If you are a fitness freak, get a trainer’s certificate and start training.

With just one session a day earning you upto INR 5-10K a month, there is no upper limit to the amount of money one could possibly make. And all this from the comfort of your own home with zero investment!

Natural, hand-made soaps are being used widely these days – for gifting, as a part of a conscious initiative and so on. Soap making is pretty simple and takes very few ingredients with low investment. You could do it at home and easily make a batch of 100 soaps in a single process.

The soaps can be priced anywhere between INR 50-100. Simple math – with just one batch, you earn INR 10K! All you need to do is position/promote your brand well.

This is where platforms like Dukaan offer great value! One can even create an online store easily, upload products, promote your brand on social media and voila!

This is one of the most promising businesses in the current scenario. As many companies have declared a work-from-home policy, a lot of working professionals are constantly looking for an office-like setting to work out of.

Co-working space might need slightly more investment, but the returns are proportionally higher, making it a business worth considering.

Chocolates are an inevitable ingredient to all celebrations and special occasions. You can make customized chocolates in a lot of varieties to suit a client’s requirement. If you love experimenting or have already found your secret recipe, this makes for a great small-scale business that you could run from home.

Snacks or snacking has been a very important part of our lifestyle and continues to be so. The tradition of snack-making has been around for ages. In an effort to avoid processed and packaged unhealthy snacks, many are on the lookout for traditionally home-made snacks as a healthier alternative.

Some even get to customise it with the choice of oil and ingredients!

This provides a great opportunity for both men and women who have a passion for cooking. With a plethora of options to market your product, one can even sell packaged snacks online.

If you have skills like writing, designing, coding, video editing, etc., you can start off as a freelancer.

There are many websites and social media forums like Fiverr and Freelancer where you can offer your services, get work and get paid for it. It not only offers flexible working hours but also helps you manage your projects the way you wish to.

Many freelancers eventually start their own company/ agency with experience.

If you have a passion for photography , owning and running a profitable business is just a matter of time. Online photography business is quite a lucrative one with plenty of options – ranging from wedding photography, travel photography, product photography, stock photography and the list goes on.

As a landscape designer, you can design the landscaping and types of plants to be planted in a given space – giving it much wider scope than gardening. A lot of bungalow/ resort/ farmhouse owners consult a landscape designer to effectively transform a piece of land into an attractive space.

Yoga is one of the most ancient techniques for good health! From core strengthening to flexibility to balance – yoga offers everything. People are waking up to the importance and benefits of yoga.

Many yoga practitioners turn trainers after completing the teacher’s training course. Yoga classes – both offline and online – are much sought-after. All you will need to invest is in a good camera and a fast internet connection.

Dance is not only a very graceful art form but also a great exercise. Many new-age choreographers are inventing newer ways of engaging people in this fun form of art and exercise.

If you love dancing you could either become a social media influencer or start your own dance classes with a unique twist.

Remember to make it inclusive to all genders and age groups to get a wider audience.

Many Indian families have a secret masala recipe. It is a great opportunity if you are willing to part with this secret and turn it into a business.

Many working professionals prefer home-made masalas over processed, preserved and packaged ones.

With a well chalked out business plan and an online store on Dukaan, you could be running your successful masala business.

Real estate business is a lucrative one with good potential to make a lot of money. Margins are considerably high and all it takes is networking in terms of investment.

Real estate agents are middlemen, so you don’t need to own an office space. Once the business flourishes, you may or may not invest in an office space.

This may not be a very low investment business but planning it smartly and rightly could make it a profitable one.

The pandemic has induced a lot of changes in the way we shop. Today even the groceries are being sold online .

A recruitment agency is another business that doesn’t require too much investment. You only need to have good contacts or a few dependable, reliable clients.

If you have a flair for networking, you could easily set up this agency by collaborating with HR personnel working in corporate companies.

Conducting the initial round of interview on zoom video calls will further slash your initial investment. You could gradually set up an office space as the business grows.

If you have a degree related to accounting and taxation, you can consider starting your own taxation and accounting services business.

You can serve individuals and businesses alike and charge them for your services. Just ensure you have the right degrees, certifications, permits, and more importantly interest.

This is one of the smartest small scale business ideas but one needs to be agile and alert. Sell what is in demand. Crackers during Diwali, Ganesh idols during Ganeshotsav, Rakhis during Rakshabandhan, and so on.

You can sell these items and make a nice profit at the end of each season.

Dropshipping is a lot like retailing but with a twist. You only need to invest in an online store from where you take orders.

To fulfill the order, you buy the product from the wholesaler, and the wholesaler sends the product to the customers.

You don’t have to store or handle the product at all.

This is a brilliant business model that is picking up steam.

If you can develop websites and applications, or at least know professionals who can, you can start a website and app development business.

Many businesses are investing in websites and applications, so it is one of the best times to start this business.

The starting investment for this business is very low, which makes it a great option as a small-scale venture.

Drone shots are a big craze among the netizens. So, if you have a drone camera, and can expertly fly it, you can start a drone camera business.

You will need to invest in a good quality drone which can be expensive, but the earning potential from this business is quite high too, compensating for it.

If you can cook big-size meals, catering is the small scale business you should consider. Catering businesses have a high earning potential, and if you take your catering business online, you are bound to find more customers.

There are many who can’t afford to keep a regular maid or don’t need to. To cater to these people, you can offer maid-for-hire services, where they can hire a maid for a day and get cleaning work done.

This is a small scale business that you could make or break depending on the location.

For instance, if you set it up next to a college, government office, or municipal office, you will see it flourish in no time. You will need to invest in a store space, a photocopier, and a printer.

You can also sell stationery for additional income.

Finding a trustworthy electrician can be quite a hassle. Therefore, an electrician service business can be ideal if you can provide good and honest electricians who can provide at-home services.

Mobile garage business has gained popularity as a small-scale business – especially since the lockdown. For a mobile garage service, you need to have a vehicle packed with all the right tools for motorbike and car repair. Customers may call you to their location where you service or repair their car or motorbike.

Thanks to easy online booking options for travel and stay, becoming a travel agent has become easier than ever.

This is a business that you can operate from your home as well, without having to invest in an office.

However, you need to have good contacts with people and corporations operating in the travel and tourism space.

If you are a proficient English speaker, you could dedicate some time to taking online classes and earn a regular income.

While there are many who can read and write the language well (especially with the help of tools like Grammarly and Hemingway App ), many struggle to speak or pronounce the words correctly.

Many rural households are dependent on making and selling handicraft products . Given their lack of business acumen, and access to the internet, they fail to run or promote their business.

You could collaborate with select artisans and help them sell online, you could either take a sale-based commission or bulk-buy and resell.

Along with making a profit, you will also be helping the rural population earn better.

Small-scale business ideas and possibilities are countless. And given the opportunities that one has today, starting your own venture is highly recommended. Whether you are ditching a 9-5 job completely or starting a side hustle – there is something for everyone.

Most of the small scale businesses in the above list of 50 may not apply to you. The business you choose will depend on your skill-set, your interest, and the resources you have at hand.

You will surely find some more appealing than the rest, from a feasibility standpoint. And when you do, read further. Learn as much as you can about the small scale business that you choose. To start off, you may visit the blogs linked in the titles above.

With platforms like Dukaan, it is easier than ever to set up your online business.

About Piyush Shah

Piyush Shah is the Head of SEO at Dukaan. He's committed to helping entrepreneurs start and grow their online stores with the power of SEO.

Reader Interactions

October 21, 2021 at 5:31 am

I am in a skills training business. I need to expand my business. I would like to find out how regarding finance and networking.

October 26, 2021 at 5:35 am

Love teaching, planning to start an online tution business.

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• Business Growth

10 Steps to Start a Small Scale Business

• By Snehil Prakash
• No Comments

Starting a business in these competitive times is not a tough task at all. If you have the right approach, your small business can scale and soar high. To establish a business it takes courage and a lot of hard work. Apart from that, ample of planning, research and studies are required. Having just the financial resources or an innovative,  groundbreaking idea won’t suffice.

As per Small biz genius, every month there are somewhere around 534,000 new businesses that are started. 

To start a business, it is mandatory that all prospects and sources are well built. A strong foundation leads to a stronger and well-maintained base. Every large company once started as a small business. Before starting a small scale business or any online business , all aspects should be studied. A disciplined approach is ideal for this. A lot goes in as an entrepreneur. 

There are so many affairs that can affect your business. Sound financial decisions, careful planning, legal activities are just a few in the long list of things that all entrepreneurs must take care of. These are the matters that define your small scale business. 

SmallBizTrends show that only a staggering 40% of small businesses show a profit margin.

A look into the issues listed below will give you an insight on how to shape and grow your small businesses and enter the 40% creme de la creme.

Table of Contents

1. Conduct Research

Apart from a few, most entrepreneurs are not blessed with moments of epiphanies or affluent individuals as an aid. Some even strive to get that golden idea, to begin with. When you have an idea for your small business all chalked out in your head, it is time to bring it into action. 

The first and foremost thing to ideally do is to scan the market. This is key. Everything else falls afterwards. As an entrepreneur, when you scan the market, your aim should be to look at and calculate the potential customers along with the prevailing competition. Both these facets if combined together will bring out the best results and will definitely give your small scale business a competitive edge.  

Therefore, carrying out market research for your small scale business requires research in the following two domains – 

•  Finding Customers
•  Competitive Analysis 

Let’s understand it with full throttle and enthusiasm. Shall we?

Finding Customers 

The sole purpose of any small scale business is to increase growth. The only important contributor to this is the customers. Customers automatically draw in for superior quality products or services that are reasonably priced. If your small business excels at this, then it’s sure to be a hit. 

A quintessential question that puzzles all entrepreneurs is of finding these customers. Market research comes in handy.  There are so many online sources and platforms which instantly provide market data, along with the latest small business trends. Good market research will give an analytical proof of customer behaviour along with economic trends. Both these together should be made use of by all small scale business, in every stage. 

Thorough knowledge of customers is vital and becomes a decisive factor for your business. There are so many sources, nowadays that provide demographic data. Every small scale entrepreneur must make use of these, as taking informed decisions will cut the risk factor by half.

With such data, entrepreneurs can scale their small business and score well with consumers. By going through data trends, various opportunities of attracting customers, increasing and maintaining retention rate and roping in new customers become a fairly uncomplicated task. Data on age, sex, interest, ethnicity, family, etc can be brought in for study. All these will be a one-stop solution to the following burning problems. 

• The demand of the product or service can be calculated
• The population interested to purchase the product or service
• The location of potential customers 
• Competitive prices in the market.
• The competitors in the market and the saturation levels.

All this data is either available online or an entrepreneur can collect it firsthand through surveys.  Much audience-specific information will be provided through personal interaction and surveys. Your small scale business can benefit from this. However, the existing resources give a generalized idea of the market situation.  

Study your target audience and look for ways in which amends can be made to as per their feedback. Go in knee-deep as an entrepreneur, for the sake of the success of your small business growth. You can make good use of questionnaires, interviews, feedback forums, surveys and focus groups to conduct direct research. 

Competitive Analysis

As a new small scale business, there will be already prevailing competition in the market. This competition is to grab all the potential customers. This vital task of roping in customers for small business is solved by competitive analysis. For every small scale business, it is necessary that a competitive analysis should be made. An in-depth study will provide your small business with the sustainability it needs.

Alongside all the competition will be highlighted as per the service, product line or the market section. 

As a part of competitive analysis, it is necessary to view all these competitive domains-

• Study the market share.
• Examine your strengths and weaknesses.
• Study all obstacles that can possibly affect your business in the market.
• Look for the opportune moment to enter the market.
• Scan all possible (major and minor), competitors.
• Keep an eye on the target market.

When establishing your small scale business in 2020, the goal should be to make it as unique as possible. Make the idea appealing and selling to the customers. Create a niche for yourself in the competitive market. For this, a complete and thorough analysis of the market with due respect  to all the factors, competitors, suppliers, pricing and their influence on the business should be executed. 

To aid all entrepreneurs of small businesses, there are many small business trends in the form of statistics. Their focus lies in providing consumer statistics, demographics, employment statistics, income statistics, consumer statistics, income statistics, production and sales statistics, trade statistics, and industry-specific statistics.

2 . Writing the Business Plan

After conducting all the necessary research for your small business, it is mandatory to create a business plan. A sound business plan will allow your small scale business to function properly and will be a blueprint against which all your actions can take place. 

A good business plan is reflective of the key elements that make your small scale business. Building a good business plan is the perfect structure against which all potential investors will be able to decide on whether or not to fund your business. It acts as a form of a portfolio for your small business. It is the single, very potent tool to bring to use and is useful to rope in both employees and investors. 

To highlight the importance of business plans and models, the statistics as per CBinsights , show that

17% of businesses crash to the ground due to the absence of a business model. 

So to begin with any small scale business, it is necessary to come up with a business plan. A business plan has to be well written in an impressive way.

Selecting a Business Plan Format

There is no right or wrong way to write a business plan. It should be clear in its approach and fulfilling the purpose for which it was created. 

The most commonly found business plan formats are either lean startup business plans or traditional business plans.

The traditional business plan is the conventional way of writing a business plan. It can be pages and pages long, compromising of each element of business in detail. A detailed outline of each aspect of your small business should be written down. 

The lean startup way of writing business plans is not a common sight. It makes use of only the necessary key points and major headliners. This comparatively takes less work and is quick work. The length, as a result, is greatly reduced. 

However, most investors prefer traditional business plans over lean startup plans. 

Business Plan Formats Explained

Give the two types of business plan formats, it is needed that all entrepreneurs stick to anyone of their choosing. 

Both the business plans are very different in their approaches and the following analysis of each will prove that. 

Preparing the Traditional Business Plan

As seen above, for your small business a traditional business plan can be a much impress option. This business plan is definitely more comprehensive and detailed. The investors and lenders preferably go for it. 

As an entrepreneur, when preparing a traditional business plan, the following 9 sections must be adhered to – 

Brief Summary 

A brief summary about your business and an introduction to it will suffice. Give an insight why your small business will be a success. Along with it, give a statement of purpose, information about your product or service, your small business’ lead team, employees and the location. The growth plans should be included too. 

Business Description 

This part is an introduction to the reader about your company. The problems that your business expertly solves should be given. Straightforwardly declare the organisations consumers and the businesses that you plan to cater to. 

List out all the experts handling your small scale business the competitive edge that you have in the market. Along with this introduce the reader to the strong facets of your business. 

Market Study

In this section you have to list out your target audience the strategies your small business uses and answer questions showing your potential as the best business in your niche. 

Convince The reader about how your small business stand out from among the rest. 

Business Organization and Structure

Begin the segment by describing how  your small business or organisation is structured. A brief intro to the legal intricacies and structure is a must. List all your partners,  the proprietorship and the holdings. 

Clearly state the person in charge of the company and experiences along with the contribution of each individual. It would be preferable if resumes or CVs are included. 

State you service or product

Give an insight into your product or service. Put in details pertaining to it and the benefits one can enjoy. State the patented, copyright or intellectual property too.

Funding Request

If your small scale business needs funding, clearly state the requirement, along with the goal for the next five years. 

Write if you are looking for debt or equity and the plans you will fulfill with the funding. Also give an insight into your future financial plans. 

Outline Financial Projections

The goal with this segment of a business plan is to convince the reader. Show stability in your business idea and proceed by projecting financial dependability.

In case of an already established business, show the balance sheets, income statements, and other relevant cash inflow statements of the previous three or five years. Include charts and graphs to bring about a clear picture of your business’ financial aspect. The idea is to show that your funding request aligns with your projections. 

For the appendix part, provide extra information and supporting documents. These can include licenses, resumes, permits and patents, images, etc. 

The was a blueprint of traditional business plan. 

Preparing the Lean Startup Format 

The lean startup format is a business plan type if quickly wish to state the agenda of your business, without going too much into the details. Also this type of format is ideal for simple businesses, prone to regular changes and refinements. 

Unlike the traditional business plan, the lean startup uses only some vital elements of your business and showcases them. These elements are ample to show the company infrastructure, financials, customers and value proposition. 

The Business Model Canvas by Alex Osterwalder is the oldest and most popular type of lean startup template.  

The nine elements of the Business Model Canvas are listed below. 

Essential Partnerships

Put in all potential businesses and services your small business will probably work with. Strategically put in suppliers, contractors, partners and manufacturers. 

Vital Resource

Project that key or most lucrative element of your business that can serve as a leverage. This could be either capital, ideas, intellectual property or staff. 

Outline Value Proposition

Show the value your business or company brings to the market. 

Customer Venture

Show the various portals through which customers will engage in your business. State if it would be automated, personal, online or in-person. 

Channel Division

Here you have to outline the many channels through which your small business will make interactions with the customers. 

Target Customers

Pinpoint towards your target audience. Clearly state the the customers your product or service is aimed at. 

Give a detail on what aspect your business will work towards; cost reducing or value maximization. All the many multiple revenue portals should be listed.

This was the lean startup format that you could opt for your small business.

3. Opt for a Suitable Business Location

Deciding the location of your business is very important. It single handedly will determine the success of your business and the taxes regulations and laws which your business becomes liable to follow. 

Your business location must be a strategized step. Keeping in mind the customers, target audience, partners and convenience a business location must be chosen. 

Zoning restrictions and local zoning requirements must be adhered to when establishing an infrastructure or renting one. 

A thorough study of the various taxes (state and local) are decided as per the area your business operates from. Before choosing a business location study deeply the tax landscape of that area. Also there are some specific tax incentives that governments (state, local and federal) provide to businesses. Such information is presented on various government websites and portals open for all. 

4. Pick a Business Name

After selecting a specific name for your business which will also serve as its unique Identity, it is needed to protect it. There is a need to register the business name and there are four different methods of doing so namely- 

• Entity name – this function at the state level and as per your business location and structure entity name becomes mandatory. 
• Trademark – TM offers protection to your business goods services and products at an even bigger National level. trademarked names usage becomes subjective to legal actions. 
• Doing business as (DBA) – this is also known as assumed name, trade name or fictitious name within the boundaries of a particular country, city or state within which a business operates. Using a DBA provide your business with a separate identity from your personal identity. 
• Domain name – for an online business, there is a need to register a domain name , popularly known as a URL or a website address. A specific URL or a domain name is your business is unique identity and cannot be used by anyone. 

5.  Secure Funds 

Funding your small business is the very first financial step to undertake. There are many different ways through which a business can be funded. But a vital step is to get a clear understanding of the funding needed. In the previous step, calculating the business funding cost,  a clear picture of the funds your small scale business need will be out. Based on this, an entrepreneur is free to choose the mode of funding. 

Devising a strategy for funding is necessary. It is a deciding factor for the success of your small scale business. 

If we go by statistics, numbers by SmallBizTrends reveal that 82% of businesses and startups crash to the ground due to poor or lack of funding. 

Round Up Your Business Cost 

You ought to calculate the startup cost that your small business will be requiring. This is a necessary step to solicit funding to attract investors and calculate profits.  

Analysing your business expenses before hand will give you a better insight to –

• Evaluate profit
• Lure in investors
• Procure loans
• Perform an in depth analysis
• Cut cost with tax deduction

Detect Your Business Expenditure

Your small business will belong to either of the three categories – 

• Brick and Mortar Business
• Online Business
• Service Providers

Despite of the above three categories, there are some unavoidable common cost that each business has to incur. The most common ones that suck in funds are infrastructure, insurance, lawyers, accountants, software, equipment, licenses, permits, marketing, advertising and the like. 

Assess Your Expenditure

After listing out all possible expenses, it is essential to calculate their actual outlay. 

Each expense will entail a different procedure or method. There are both certain and well defined costs. As an entrepreneur it is necessary to ascertain expenditures. 

Include all the Expenses

When done individually listing out each expense and the cost they will incur, the final step is to sum up all of it together. This will be done in the form of monthly expenses and one time expenses. 

Monthly expenses are incurred monthly like employee salaries, rent, and bills. Calculating monthly expenses for long term is ideal. Typically assessing five years of monthly expenses will be beneficial. 

One time expenses are simply the initial cost that your small business will require. Such one time expenses include bringing in machinery, equipment, license, permit, etc. 

Adding up both the monthly and one time expenses will display a clear picture of the capital as and when needed. 

Use these Expenses Cost to Secure Funding

For securing funding for your business, a report of all the above monthly and one time costs must be added and presented formally. 

This report must be neat and clearly represent costs. For all investors and lenders, it must serve informative, so that they’re able to make easy comparisons. 

As an entrepreneur, look into all the different ways through which your business can get the funding it needs. 

The following are the most common methods of funding – 

• Bootstrapping – It can be easily understood as self funding. You use your available funds and personal savings to kickstart your business. 
• Venture Capital – these are private equity firms which study your business prospectus and decide accordingly on the various stages they want to invest and raise funding. Your business can get an early stage, seed stage or later stage investment as per the venture capitalist firm you approach. Your business portfolio must be impressive enough to stand out and show growth prospects. VCs are a good option if you are looking to expand and grow your small business. All a venture capitalist firm requires is an equity stake hold or ownership of your company in return for funding. 
• Angel Investors – An Angel investor is affluent personality who decides to invest his capital into your business. In exchange, an entrepreneur would have to give equity position to the angel investor. 
• Crowdfunding – Crowdfunding makes use of various sources to raise capital for your business. There are various crowdfunding platforms online through which people or investors pitch in their capital based on your product, service or venture. In exchange these investors get your product or service at a discounted or free rates. Such crowdfunding platforms are entirely web based. To make your small business profile stand out in crowdfunding spaces, an attractive presentation of your idea is needed. Raising funds through crowdfunding is entirely dependent upon the attractiveness of your business. Such funding platforms are useful as they entail a low risk factor and there is no liability to repay crowdfunders in case of failed business. 
• Small Business Loans – Apart from traditional business loan there are also small business administration loans that you can secure. There are Small Business Investment Company (SBIC), Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer (STTR) Program under the Small Business Administration Investment Programs.  

6. Select a Business Structure

Business structure is the deciding factor for tax payments, provision of funds, and division of responsibilities. prior to register your business with the state it is necessary to conclude with your business structure. 

Grow various types of business structures like a sole proprietorship, partnership, Limited Liability Company (LLC), Corporation  (comprising of s Corp, B Corp, close Corp, non-profit Corp) and Cooperative.

As per your funds and involvement in the business deciding on your business structure will become significantly easy. most small scale businesses start with sole proprietorship or partnership form of business and later expand. each business structure comes with its own set of responsibilities, ownership outlines and  tax liabilities. 

7. Register your Business

It is needed to register your business to make it stand out as a separate legal entity. However, if you are making use of your own personal name there is no need to register your business. Business structure and business location plays a major role in deciding where and how the business must be registered. Most small scale businesses just need to register their business name with state and local governments. Registering your business has its own perks where an entrepreneur gets legal benefits, tax benefits and personal liability protection. 

For trademark protection, small businesses can register with the federal agencies. 

In case of a partnership, Corporation, nonprofit Corporation or LLC , your business should be registered with the state government agencies. The need for a registered agent arises here. This registered agent will represent your company and procure all official and legal documents. 

If your business activities cross state borders, your business might be required to resistor for foreign qualification.  

However there is no rule that entails registering your business with the city or country government. It is only specific licences or permits that are needed from the authorities. 

8. Get Federal and State Tax ID Numbers

These numbers are also called the employer identification number (EIN). It is through this number that your business is able to pay all the taxes, get permits and licences, open a business bank account, and hire employees. 

Federal tax ID is synonymous with employee identification number and is free to apply. 

State tax ID number comes handy in deciding whether or not your business is liable to pay taxes. Each state has its different tax commitments. As a small business entrepreneur you must check with your state government to get started. 

9. Requesting Licences and Permits

Your business activities and business location solely are responsible for the licences and permits it needs to operate successfully and freely. Each state city or country has it onset of licences and permits needed to operate a business. Are responsible entrepreneur must look into these regulations and apply them in a legal manner. Also show some permits and licences have an expiration date which need timely renewal. 

Both Federal and state agencies provide licences and permits. Incase a business is regulated by a federal authority, a federal licence a permit will be mandatory. These licences and permits have a specific fee attached to them which is dependent on your business activities and the issuing agency. 

10. Opening a Business Bank Account

The final step to establish your small scale business is to open a business account to begin the easy to and fro of your money. A business bank account provides safety e compliance and reality that a business needs. By managing the movement of your funds via business bank account there is a hint of professionalism that tags long also the purchasing power can be easily established. 

Pick a bank that offers good deals and comparatively low fees on opening a business bank account. Look out for introductory offers, transaction fees, interest rate (for saving, lines of credit and checking), minimum account balance fees and termination fees when hunting for a bank to open your business account. 

Your employee ID number (EID), all legal business documents, ownership agreements and licences/ permits will be the common documents needed to initiate the process. 

By precisely proceeding in the above manner, it becomes a doable task to start a small scale Business in 2020. 

Snehil Prakash

Snehil Prakash is the Digital Marketer at CuteHR. In addition to marketing, he takes an interest in human resource management, business management, innovation, and startups. He's all about reading, good coffee, and music.

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