Business Planning

What Goes Into a Business Plan? The Complete 9-Section Guide

Many first-time business owners underestimate what goes into a business plan. They assume a few pages about their idea will suffice. Then they submit to an SBA lender and get rejected. Not because the business idea is bad, but because the plan itself is incomplete.

SBA lenders review hundreds of applications monthly. They know exactly what separates fundable businesses from wishful thinking. If you miss any of the 9 essential sections, or fail to address what lenders need in each one, your application goes to the rejection pile regardless of how promising your business concept may be.

Here is the complete breakdown of what goes into an SBA-ready business plan, covering all 9 sections that lenders require and how to execute each one properly.

The 9 Essential Sections of Every Business Plan

The Small Business Administration established a specific format that has become the industry standard. These 9 sections work together to tell a complete, compelling story about your business and demonstrate your ability to succeed and repay financing.

1. Executive Summary

Your executive summary is both the first thing you write in your document and the last thing you create. It sits at the front but should only be written after all other sections are complete, because it synthesizes everything that follows into 1-2 pages.

Think of this as your business plan's elevator pitch. It must communicate what your business does, how much funding you need, how you will use it, and why you will succeed. Every key number from your financial projections appears here: total funding request, projected first-year revenue, break-even timeline, and expected return.

Strong executive summaries get specific. Compare these two approaches:

Weak: "Seeking SBA financing to open a fitness studio. The fitness industry is growing and we expect strong demand."

Strong: "Seeking $180,000 SBA 7(a) loan to open a 2,800 sq ft boutique fitness studio in downtown Phoenix, Arizona. Based on demographic analysis of the 3-mile radius (42,000 residents, median income $68,000, 38% aged 25-44), comparable studio performance data, and conservative membership projections, we project $420,000 Year 1 revenue with break-even in Month 11."

The second version gives lenders everything they need to evaluate feasibility in two sentences. Every claim is quantified. Every number is defensible.

Lenders often decide whether to read the full plan based on the executive summary alone. Make it count. Learn exactly what lenders look for when evaluating your executive summary.

2. Company Description

This section establishes your business fundamentals: legal structure, ownership, location, and the specific problem you solve for customers. Avoid generic mission statements that could apply to any business. Focus on concrete details that demonstrate you have thought through the practical realities of operations.

Include your business structure (LLC, S-Corp, C-Corp, sole proprietorship) and explain why you chose it. If you have partners, detail ownership percentages and each person's role. Specify your physical location and explain why that location positions you for success.

Most importantly, articulate the customer problem you solve and why your solution is better than existing alternatives. This is not about being inspirational. It is about demonstrating market understanding.

For example, a salon suite business might describe: "Independent beauty professionals face a choice between renting traditional salon booths with limited autonomy or working from home with no professional environment. We provide fully-equipped private suites with 24/7 access, allowing beauty professionals to build their own brands while benefiting from a professional location and shared amenities. This model has proven successful in our target market, with existing comparable facilities maintaining 90%+ occupancy rates."

The company description should take 2-3 pages and leave no questions about what you do, who owns it, where you operate, and why customers will choose you.

3. Market Analysis

This is where many business plans fail. Lenders want proof that customers exist, will pay for your offering, and are accessible to you. Vague statements like "the market is huge" or "demand is growing" tell them nothing. They need data, sources, and logical analysis.

Your market analysis should cover three components:

Industry Overview: Provide current market size, recent growth rates, and future projections. Cite reputable sources like IBISWorld, Census data, industry associations, or market research firms. For example: "The U.S. restaurant industry generated $899 billion in 2025 revenue and employs 15.5 million people. The full-service restaurant segment specifically grew 4.2% annually from 2020-2025 and is projected to continue 3.8% annual growth through 2030 (National Restaurant Association, 2025 State of the Industry Report)."

Target Market: Define your specific customer segment. Move from TAM (Total Addressable Market) to SAM (Serviceable Addressable Market) to SOM (Serviceable Obtainable Market). For a local business, use demographic data for your specific geography: population, age distribution, income levels, relevant behavioral data.

Competitive Analysis: Identify direct and indirect competitors. Create a competitive matrix comparing your offering on key dimensions: price, quality, features, location, customer service. Explain your differentiation strategy and why customers will switch to you or choose you over established alternatives.

Include actual numbers throughout. If you claim high demand, show search volume data or survey results. If you reference competitors, visit their locations, analyze their reviews, and document their pricing. Lenders have seen thousands of business plans. They can instantly identify market analysis based on wishful thinking versus rigorous research.

The market analysis typically runs 5-8 pages and should include tables, charts, and footnoted sources. BizPlanStudio includes comprehensive market research in every plan we create, pulling from proprietary databases and current market data to ensure your analysis meets lender standards.

4. Organization and Management

Lenders invest in people as much as ideas. This section demonstrates that you have the team, experience, and organizational structure to execute your business plan successfully.

Start with an organizational chart showing reporting relationships. For a small business, this may be simple (owner, manager, 3 service providers), but it should still be visual and clear.

Then provide brief biographies for key team members. Include relevant experience, education, and specific accomplishments. If you are opening a restaurant and have 12 years of restaurant management experience including launching 2 successful concepts, that goes here. If you are opening a consulting firm and have an MBA plus 15 years in your specialty, that goes here.

Address any experience gaps directly. If you have strong operations experience but weak financial management background, explain that you have hired a CFO with restaurant accounting experience. If you lack sales experience, note that you have engaged a business development consultant.

Include your advisory board if you have one. Real advisors with relevant expertise (not just friends and family) add credibility. Specify their roles and how often they meet with you.

For businesses with multiple owners, clarify roles and responsibilities. Who handles operations? Who manages finances? Who leads marketing? Ambiguity here raises red flags about internal disagreements and unclear accountability.

This section typically runs 3-4 pages and should include headshots or professional photos of key team members when possible. The goal is to convince lenders that your team has both the expertise and commitment to build a successful business.

5. Products or Services

Describe exactly what you sell. This seems straightforward but requires more detail than most entrepreneurs provide.

List all products or services you offer. Explain the features and benefits of each. Detail your pricing strategy and explain how you arrived at those prices (cost-plus markup, competitive positioning, value-based pricing).

If you sell products, describe your suppliers, minimum order quantities, lead times, and quality control processes. If you offer services, detail your service delivery process, time requirements, and any certifications or licenses required.

Explain your competitive advantages: proprietary technology, exclusive supplier relationships, superior quality, faster delivery, better customer service, or unique positioning. Support these claims with evidence: patents, supplier agreements, customer testimonials, or competitive analysis.

Address your product development roadmap. What are you launching with? What will you add in Year 2? How do you plan to evolve your offering based on customer feedback?

For service businesses, this section should describe your service delivery methodology in enough detail that lenders understand how you create value. For product businesses, include information about inventory management, product sourcing, and quality assurance.

This section typically runs 3-4 pages and should include product photos, service process diagrams, or pricing tables as appropriate.

6. Marketing and Sales Strategy

Many business plans include wishful thinking disguised as marketing strategy: "We will use social media and word of mouth." Lenders want specifics: channels, tactics, budgets, expected results, and measurement systems.

Your marketing strategy should detail:

Customer Acquisition Channels: List every channel you will use to reach customers (Google Ads, Facebook advertising, local SEO, email marketing, direct mail, partnerships, referrals, etc.). For each channel, specify budget allocation, expected customer acquisition cost, and projected volume.

Sales Process: Describe how you convert prospects into customers. For a restaurant, this might be: "Customer discovers us via Google search or Instagram, visits website to view menu and photos, makes reservation via OpenTable, experiences meal, receives follow-up email encouraging review and return visit with 10% discount offer." Map out the entire journey.

Marketing Budget: Specify exact dollar amounts allocated to each channel monthly and annually. Show how you calculated expected ROI for each investment.

Sales Projections: Connect your marketing spend to revenue projections. If you are spending $2,000 monthly on Google Ads and project that will generate 40 customers at $50 average transaction value, show that math.

Key Performance Indicators: Define how you will measure marketing effectiveness: customer acquisition cost, conversion rate by channel, customer lifetime value, return on ad spend, organic search rankings, social media engagement rates.

Avoid generic claims about "going viral" or "leveraging social media." Lenders want proven channels with realistic cost assumptions and measurable outcomes. Reference industry benchmarks when available: "Industry data shows fitness studios typically achieve 3-5% conversion rates on free trial offers. We are projecting conservative 2.5% conversion in Year 1, improving to 4% by Year 2 as we optimize messaging and targeting."

This section typically runs 4-6 pages and should include a detailed marketing budget table, customer acquisition cost analysis, and projected customer volume by channel.

7. Funding Request

This section gets specific about how much money you need, what you will do with it, and what terms you are seeking.

State the exact funding amount: "$150,000 SBA 7(a) loan." Specify the type of financing and repayment terms you are requesting: "Seeking 10-year term at current SBA rates (approximately 11.5% as of January 2026), with interest-only payments for first 6 months during buildout and ramp-up period."

Then provide a detailed use of funds breakdown. Account for every dollar:

Include vendor quotes for major expenses. If you claim $38,000 for equipment, attach quotes from suppliers. This proves you have done your homework and your numbers are realistic, not guesses.

If you are seeking funding in multiple stages, explain the timeline: "Initially seeking $150,000 for launch. Based on projected growth, we anticipate needing an additional $75,000 line of credit in Month 18 to fund inventory expansion for second location."

Address what you are personally investing. Lenders want to see owner skin in the game. If you are investing $40,000 of personal funds in addition to the $150,000 loan, specify that and show proof of funds.

Explain your repayment strategy: "Based on financial projections detailed in Section 8, we will generate sufficient cash flow to comfortably meet loan payments beginning Month 7. Our projected DSCR (Debt Service Coverage Ratio) reaches 1.45 by end of Year 1, well above the SBA requirement of 1.25."

This section typically runs 2-3 pages and should include detailed use of funds tables and supporting quotes.

8. Financial Projections

This is the section that most directly determines whether you get funded. Lenders will scrutinize every number, so accuracy and defensibility are paramount.

Your financial projections must include:

24-Month Cash Flow Projection: This is non-negotiable for SBA loans. Show monthly revenue, all expenses by category, and resulting cash position. Demonstrate that you generate sufficient cash to cover operations and debt service.

Income Statements: Provide monthly statements for Year 1 and quarterly or annual statements for Years 2-3. Show revenue, cost of goods sold, gross profit, operating expenses, and net income.

Balance Sheet: Show assets, liabilities, and equity at start of operations and projected at end of each year.

Break-Even Analysis: Calculate the revenue level at which you cover all fixed and variable costs. Show how many months it takes to reach break-even.

Debt Service Coverage Ratio: This is the number lenders care about most. DSCR = Net Operating Income divided by Total Debt Service. Most SBA lenders require minimum 1.25, meaning you generate $1.25 in operating income for every $1 in loan payments. Calculate your DSCR monthly and show when you reach the threshold.

Every projection must be defensible. If you project $35,000 monthly revenue, show the calculation: "200 customer transactions at $175 average ticket = $35,000." Support assumptions with comparable data: "Average ticket is based on analysis of 5 comparable studios in similar demographics, which report average tickets ranging from $165-$195. Our $175 projection falls within this validated range."

Use conservative assumptions. Lenders prefer to see pessimistic projections that you beat rather than optimistic projections that prove unrealistic. Consider including scenario analysis showing performance under various assumptions (conservative, moderate, optimistic).

Address seasonality if relevant. Restaurants often see slower periods in January and February. Retail peaks in Q4. Show you understand your business cycles and have planned cash reserves accordingly.

This section typically runs 6-10 pages with extensive tables and calculations. Learn more about creating financial projections that lenders trust.

9. Appendix

The appendix contains supporting documents that validate claims made throughout your business plan. This is not optional fluff. It is proof.

Common appendix items include:

Organize appendix items logically and reference them throughout your plan. When you mention a $38,000 equipment cost in the funding request section, note: "See vendor quotes in Appendix B." When you claim 15 years of industry experience, note: "See resume in Appendix A."

The appendix can be as long as necessary to provide adequate documentation. For complex businesses or large funding requests, it may exceed 50 pages. Quality lenders appreciate thorough documentation because it demonstrates attention to detail and reduces their underwriting risk.

Industry-Specific Considerations

While these 9 sections remain constant across all business plans, the emphasis and details vary significantly by industry.

Restaurant business plans require extensive detail on menu pricing, food cost percentages, labor scheduling, and comparable restaurant performance. Lenders want to see detailed buildout costs, equipment lists, and realistic ramp-up assumptions based on similar concepts. Explore our restaurant business plan guide for industry-specific requirements.

Retail business plans emphasize inventory management, supplier relationships, visual merchandising plans, and omnichannel strategy. Your market analysis must demonstrate sufficient customer traffic and your financial projections must include realistic inventory turnover assumptions.

Service businesses like consulting or fitness studios focus on utilization rates, pricing strategies, and recurring revenue models. Lenders want to see client acquisition strategies, retention assumptions, and expertise documentation.

Salon and spa businesses require detailed staffing plans, state licensing documentation, booth rental or commission structures, and realistic client retention metrics. See our salon business plan resources for specific guidance.

Understanding these industry nuances is critical to creating a plan that gets approved. Generic business plans fail because they miss industry-specific requirements that lenders expect to see.

Getting Your Business Plan Right

These 9 sections work together to tell a complete, compelling, data-backed story about your business. Miss any section and you have an incomplete plan that lenders will reject. Execute each section poorly with vague claims, unsupported assumptions, or unrealistic projections, and you get the same result.

The difference between an approved business plan and a rejected one often comes down to details: specific numbers instead of general claims, cited sources instead of assumptions, conservative projections instead of wishful thinking, and comprehensive documentation instead of gaps.

Creating an SBA-ready business plan requires expertise in market research, financial modeling, industry benchmarking, and lender requirements. Most entrepreneurs lack this specialized knowledge, which is why professional business plan services exist.

BizPlanStudio creates comprehensive, SBA-ready business plans that address all 9 sections with the depth and rigor lenders require. Every plan includes proprietary market research, 24-month financial projections with DSCR calculations, competitive analysis, and complete documentation. We have studied what gets approved and what gets rejected, and we build that knowledge into every plan we deliver.

Ready to get your business funded? Start your SBA-ready business plan today.