Small Business Resources — Business Planning and Bookkeeping

Business Planning and Bookkeeping

If you want to get on the road to achieving your dreams of small business ownership, you’ll need a map. This is where your business plan comes in.

Even if you plan to start small, a written business plan is an essential tool for success. Your plan will allow you to introduce your business to potential funding sources and define for yourself how your business will operate. Creating your business plan will help you to clarify your vision for the company, identify areas that need strengthening, spot opportunities, and set a timeline to meet your goals. It will force you to look at the whole project, decide where you want your business to go, and plan for how you’re going to get there.

Try not to think about your plan as a one-time project—it’s not something to stow away on the shelf and forget. As your business grows and changes, the business plan should be continually updated.

Although it’s a good idea to tailor your plan according to your particular needs, most business plans include the following core elements:

  • Title or cover page—Including your business name and contact information for yourself and your partners.
  • Table of contents—An itemized overview of what’s in the plan and where to find it.
  • Executive summary—A concise overview of the company and its history, describing your objectives, costs, marketing plans, and financial projections.
  • Description of the business—A comprehensive description of the company’s products or services, it’s legal structure (such as sole proprietorship, partnership, non-profit, corporation, or LLC), the type of business (merchandising, manufacturing, or service), whether it is a startup, an acquisition or if it’s expanding, whether it’s seasonal, and trends within your industry, citing outside experts.
  • Your products and services—Explain what they are, how they’re produced and sold and the steps in the process, including your facilities and equipment needs, personnel, supplies, and sources of materials.
  • Management team—Short bios of yourself and other key players, including your board of directors, summing up qualifications, and business experience.
  • Personnel—Your staffing levels, anticipated future needs, labor pool in your community, and back-up plans.
  • Market analysis—Your goal is to show that there is a market for your product or service. Describe what is unique about your product, the customers you are targeting and your pricing strategy.
  • Competition—Who your competitors are, how their businesses operate, their location and market share. Explain how your product improves on what’s already out there.
  • Industry analysis—A broad look at the overall industry, its size and growth rate, and what part of the market share you expect to capture.
  • Use of financing—Explain why you need a loan, how the money will be used and how it will make your business more profitable. Outline a procedure for making decisions on borrowing and anticipate your cash needs, rather than trying to borrow under pressure.
  • Financial plan—All key financial information goes here. This section demonstrates that your business has solid accounting and bookkeeping systems. Explain how you have financed the business so far, including how much of your own assets you’re putting into it. All expenses should be explained, from start-up costs through continuing operating costs. Include key financial documents, including a balance sheet, income statement and cash flow statement, and if you’re projecting income, explain the rationales you used to make the projections, such as industry trade magazines or marketing studies.
  • Risk analysis—All businesses have risks. Explain the risks to your business and your plans to address them.

Tip: The Small Business Administration offers step-by-step guidance as well as online courses, videos and podcasts to help you write a successful business plan.


Keeping current, detailed and organized records is essential to running a business successfully. Bookkeeping is an orderly way to monitor your income and expenses, help you to assess which products or services are selling and which aren’t, calculate your tax obligation and pay yourself and your employees. When you need to apply for a business loan, lenders will expect you provide basic financial statements that are based on your bookkeeping and accounting procedures.

Your record keeping system should generate monthly reports, including:

  • Accounts receivable—This is money owed to you by your customers.
  • Accounts payable—The money you currently owe for the purchase of supplies, services and inventory.
  • Profit and loss statement—Shows what you’ve spent and what you’ve brought in. It includes sales, inventory costs, gross profits (the difference between sales income and your costs to provide the goods or services you sell), expenses, (including salaries, taxes, insurance, depreciation, and marketing) and net income (gross profit minus your expenses). This statement, also called an “income statement”, tells you how you’re doing in terms of making money and keeping expenses under control.
  • Balance sheet—Shows your assets and liabilities and gives a financial overview of your business at a moment in time. Assets may include cash on hand or in the bank, vehicles, accounts receivable, land, buildings, merchandise or inventory, equipment, pre-paid rent, and insurance; liabilities include anything you’re obligated to pay, such as accounts payable, salaries, mortgage payments, taxes, and loans payable.
  • Cash flow statement—Shows how cash moves into and out of your business. By recording actual sales income and revenue paid out each month, you can see at what points over the course of the year you may face cash shortages. That can help you predict your need for financing and when funds will come in to repay the loan.

Depending on the complexity of your needs, you may be able to do your own bookkeeping with the help of software designed for small businesses. Your accountant may be able to provide some suggestions. Also, be sure to back up your system and print hard copies of reports to file, along with receipts, invoices, client records, correspondence, contact lists for clients, and other documents.

How do I create a business plan?

A business plan is like a roadmap—outlining where your business is going and how it's getting there. Create your plan with this free workbook.

Small Business Plan Workbook (2.1 MB PDF)

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