How to Write a Business Plan a Lender Will Read

1. Start with the numbers, not the words

Every section of a plan rests on four figures. Work them out before you write a sentence:

1. Startup budget

   Every purchase before opening day — equipment, vehicle, deposits, licenses, first inventory — plus a cash reserve to carry you while sales build. Use real quotes, not guesses.

2. Monthly costs

   Split them in two: fixed costs that arrive whether you sell or not (insurance, rent, software, wages, the loan payment), and variable costs that rise with each sale (materials, food, card fees).

3. Break-even

   Fixed monthly costs divided by the share of each dollar you keep after variable costs. If a food truck keeps 65¢ of every dollar and has $7,629 of monthly costs, it needs about $11,736 in sales a month. Try the break-even calculator.

4. A realistic first year

   New businesses rarely open at full speed. Our plans assume year one runs at 55% of full volume and year two at 80%, reaching full volume in year three — and the plan says so, so a lender can see it.

2. Check your market with federal data

A lender wants to know the business has customers in your area — and that you know the competition. Three free federal sources answer that for almost any small business and any county:

Main Street Plans pulls all four for your county automatically — see how.

3. Write the sections

The SBA describes the traditional format that lenders and investors commonly request. Write the executive summary last — it is a summary of everything else.

1. Executive summary

   What the business is, where, who runs it, how much you need and what for. One page.

2. Company description

   The problem you solve, who you serve and why you’ll win against the businesses already there.

3. Market analysis

   Your industry, your customers and your competitors — with counts and averages for your county, not national clichés.

4. Organization and management

   Legal structure, who does what, and the experience that makes you credible.

5. Service or product line

   What you sell, at what price, and why customers will pay it.

6. Marketing and sales

   How the first hundred customers find you and why they come back.

7. Funding request

   How much, for what, and on what terms — and how the payment is covered.

8. Financial projections

   Startup budget, monthly costs, break-even and the yearly projection, with every assumption labelled.

Want the full template? Use our free business plan outline.

4. Pressure-test it before a lender does

Every Main Street Plans plan runs the same four checks against federal data. You can run them by hand:

• Sales vs. the local average. If your year-three sales are well above what similar businesses in your county average, explain why — or lower them.
• Staffing vs. the industry. If similar businesses average several employees and your plan has none, your hours and wage costs are probably missing.
• Margin vs. payroll. With staff on payroll, a margin above 40% usually means a cost is missing. Food truck businesses with employees spent 23.4% of sales on payroll alone in the 2022 Economic Census.
• A first-year loss. Common and fine — if your reserve covers it. Show the reserve.

Break-even for five common small businesses

With typical starting assumptions and an example loan at the SBA’s maximum 7(a) rate for its size, here is what five businesses need to sell each month to cover their costs:

*Fixed costs, wages and the example loan payment in year one. “Owner only” break-even covers the business’s costs, not the owner’s pay. Your own quotes, prices and city change every figure.