write a business plan uk

Cookies on GOV.UK

We use some essential cookies to make this website work.

We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

We also use cookies set by other sites to help us deliver content from their services.

You have accepted additional cookies. You can change your cookie settings at any time.

You have rejected additional cookies. You can change your cookie settings at any time.

• Business and self-employed
• Business finance and support

Write a business plan

Download free business plan templates and find help and advice on how to write your business plan.

Business plan templates

Download a free business plan template on The Prince’s Trust website.

You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances.

Business plan examples

Read example business plans on the Bplans website.

How to write a business plan

Get detailed information about how to write a business plan on the Start Up Donut website.

Why you need a business plan

A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.

A business plan helps you to:

• clarify your business idea
• spot potential problems
• set out your goals
• measure your progress

You’ll need a business plan if you want to secure investment or a loan from a bank. Read about the finance options available for businesses on the Business Finance Guide website.

It can also help to convince customers, suppliers and potential employees to support you.

Related content

Is this page useful.

• Yes this page is useful
• No this page is not useful

Help us improve GOV.UK

Don’t include personal or financial information like your National Insurance number or credit card details.

To help us improve GOV.UK, we’d like to know more about your visit today. Please fill in this survey (opens in a new tab) .

Free Simple Business Plan Template

Our experts

Written and reviewed by:.

Startups.co.uk is reader supported – we may earn a commission from our recommendations, at no extra cost to you and without impacting our editorial impartiality.

Your business plan is the document that adds structure to your proposal and helps you focus your objectives on an achievable and realistic target. It should cover every aspect of what your business journey will look like, from licensing and revenue, to competitor and sector analysis.

Writing a business plan doesn’t need to be a difficult process, but it should take at least a month to be done properly.

In today’s capricious business climate there’s a lot to consider, such as the impact of political challenges like Brexit. These details are especially important in today’s bad economy. Investors are looking for entrepreneurs who are aware of the challenges ahead and how to properly plan for them.

Below, you’ll find everything you need to create a concise, specific and authoritative business plan. So let’s get started turning your idea into a reality!

Click here to download your free Business Plan template PDF – you can fill in your own details and those of your business, its target market, your customers, competitors and your vision for growth.

Our below guide will give you detailed advice on how to write a quality business plan, and our PDF download above can give you a clear template to work through.

But, creating an effective business plan needs….planning! That’s where a high quality planning tool can help.

We recommend creating an account with monday to use this tool – there’s even a free trial . Doing so means you can start your entrepreneurial journey on the right foot.

Get the latest startup news, straight to your inbox

Stay informed on the top business stories with Startups.co.uk’s weekly newsletter

By signing up to receive our newsletter, you agree to our Privacy Policy . You can unsubscribe at any time.

What to include in your business plan template

There’s a lot of information online about how to write a business plan – making it a confusing task to work out what is and isn’t good advice.

We’re here to cut through the noise by telling you exactly what you need to include for a business plan that will satisfy stakeholders and help develop a key identity for your brand. By the end, you’ll have a plan to make even Alan Sugar proud and can get started with the most exciting part – running your business.

Throughout this guide, we’ve featured an example business plan template for a new restaurant opening in Birmingham called ‘The Plew’. In each section, you’ll be able to see what the contents we’re describing would look like in a ‘real-life’ document.

What to include in your business plan:

• Executive Summary
• Personal summary
• Business idea
• Your product or service
• Market analysis
• Competitor analysis
• Cash forecast
• Operations and logistics
• Backup plan
• Top tips for writing a business plan
• Business plan template UK FAQs

1. Executive summary

This section is a summary of your entire business plan. Because of this, it is a good idea to write it at the end of your plan, not the beginning.

Just as with the overall business plan, the executive summary should be clearly written and powerfully persuasive, yet it should balance sales talk with realism in order to be convincing. It should be no more than 1,000 words.

It should cover:

• Mission statement  – what is your company’s purpose?
• Business idea and opportunity – what unique selling point (USP) will you provide?
• Business model – how will your business operate?
• Business objectives – what are you aiming to achieve?
• Target market – who is your customer base?
• Management team – who are the owners/senior staff?
• Competition – who are you competing against?
• Financial summary – can you prove the business will be profitable?
• Marketing strategy – what is your marketing plan and associated costs?
• Timeline – how long will it take to launch/grow your new business?

It sounds like a lot – but don’t feel you have to spend hours putting this together. Here’s what the above information for an executive summary might look like when put into our example business plan template for ‘The Plew’:

Startups’ business plan template example: executive summary

2. Personal summary

Investors want to know who they’re investing in, as much as what. This is where you tell people who you are, and why you’re starting your business.

Outline your general contact details first, giving your telephone number, email address, website or portfolio, and any professional social media profiles you might have.

Run through this checklist to tell the reader more about yourself, and put your business ambitions into context.

• What skills/qualifications do you have?
• What are you passionate about?
• What is/are your area(s) of industry expertise?
• Why do you want to run your own business?

Here’s what our two fictional co-founders of ‘The Plew’ might write in their personal summaries for our example business plan. CEO Gabrielle Shelby, has highlighted her expertise in the restaurant industry, while CFO Freya Moore outlines her accounting and finance knowledge.

Startups’ business plan template example: personal summary

Richard Osborne, founder and CEO of UK Business Forums, says personality is important in a business plan.

“Having a strong, personal reason at the heart of your business model will help keep you going and give you the motivation to carry on,” he affirms.

3. Business idea

This section is essentially to offer a general outline of what your business idea is, and why it brings something new to the market.

Here, you should include your general company details, such as your business name and a  one-line summary of your business idea known as an  elevator pitch. This section should also list a few key business objectives to show how you plan to scale over the next 1-3 years.

We also recommend carrying out a SWOT analysis to tell investors what the strengths, weaknesses, opportunities, and threats are for your business idea. Think about:

• Strengths: ie. why is this a good time to enter the sector?
• Weaknesses: ie. what market challenges might you encounter?
• Opportunities: ie. what demand is your product/service meeting in today’s market?
• Threats: ie. how will the business be financed to maintain liquidity?

In the template below, you can see a breakdown of the above information for ‘The Plew’. At the top is its mission statement: “to craft an unforgettable dining experience in a chic atmosphere.”

Startups’ business plan template example: business idea

Need a business idea? We’ve crunched the numbers and come up with a list of the best business ideas for startup success in 2023 based on today’s most popular and growing industries.

4. Your products or services

Now it’s time to explain what you are selling to customers and how will you produce your sales offering.

Use this section to answer all of the below questions and explain what you plan to sell and how. Just like your business idea outline, your answers should be concise and declarative.

• What product(s) or service(s) will you sell?
• Do you plan to offer new products or services in the future?
• How much does the product or service cost to produce/deliver?
• What is your pricing strategy ?
• What sales channels will you use?
• Are there legal requirements to start this business?
• What about insurance requirements?
• What is the growth potential for the product or service?
• What are the challenges? eg. if you’re looking to sell abroad, acknowledge the potential delays caused by post-Brexit regulations.

What insurance and licensing requirements do you need to consider?

Depending on what your business offers, you might need to invest in insurance or licensing. Our How To Start guides have more details about sector-specific insurance or licensing.

Public Liability, Professional Indemnity, and Employers’ Liability are the most well-known types of business insurance. We’ve listed some other common other licensing and insurance requirements below:

In our example product/service page for ‘The Plew”s business plan, the founders choose to separate this information into multiple pages. Below, they outline their cost and pricing, as well as sales strategy. But they also include an example menu, to offer something a bit more unique and tantalising to the reader:

Startups’ business plan template example: product list and pricing strategy

5. Market analysis

This section demonstrates your understanding of the market you are entering, and any challenges you will likely face when trying to establish your company.

This section pulls all of your target market and customer research together to indicate to stakeholders that you are knowledgable about the sector and how to succeed in it.

• Who is your typical customer and where are they are based? Describe the profile of your expected customers eg. average age, location, budget, interests, etc.
• How many customers will your business reach? Outline the size of your market, and the share of the market that your business can reach.
• Have you sold any products/services to customers already? If yes, describe these sales. If no, have people expressed interest in buying your products or services?
• What have you learned about the market from desk-based research? What are the industry’s current challenges, and how has it been affected by the economic downturn?
• What have you learned about the market from field research? (eg. feedback from market testing like customer questionnaires or focus group feedback).

What is your marketing strategy?

Once you’ve highlighted who your rivals are in the market, you can provide details on how you plan to stand out from them through your marketing strategy. Outline your  business’ USP, your current marketing strategy, and any associated advertising costs.

‘The Plew’ identifies its target audience as young, adventurous people in their mid-30s. Because of the restaurant’s premium service offering, its audience works in a well-paid sector like tech:

Startups’ business plan template example: customer analysis

6. Competitor analysis

This section demonstrates how well you know the key players and rivals in the industry. It should show the research you have carried out in a table format.

Begin by listing the key information about your competitors. Don’t worry about sounding too critical, or too positive. Try to prioritise accuracy above all else.

• Business size
• Product/service offering
• Sales channels
• Strengths/weaknesses

Competitors will take two forms, either direct  or  indirect. Direct competitors sell the same or similar products or services. Indirect competitors sell substitute or alternative products or services.

Here’s a breakdown of the strengths, weaknesses, and opportunities, and threats presented by a competitor restaurant for ‘The Plew’ called Eateria 24. At the bottom, the founders have written what learnings they can take from the chart.

Startups’ business plan template example: competitor analysis

Check out our list of the top competitor analysis templates to download free resources for your business, plus advice on what to include and how to get started.

7. Cash forecast

Outline your financial outlook including how much you expect to spend, and make, in your first year

All of your considered costs can be put into one easy-to-read document called a monthly cash forecast. Cash forecasts contain:

1. Incoming costs such as sales revenue, customer account fees, or funding.

2. Outgoing costs such as staff wages or operating expenses. The latter can cover everything from advertising costs to office supplies.

For those firms which have already started trading, include any previous year’s accounts (up to three years) as well as details of any outstanding loans or assets.

Annual cash forecast: what is it?

By conducting 12 monthly cash forecasts, you can create an annual cash forecast to work out when your company will become profitable (also known as breakeven analysis) . You will break even when total incoming costs = total outgoing costs.

In your annual cost budget, make sure to also include month opening/closing balance.  This is important to monitor for accounting, particularly for year-end.

• Opening balance = the amount of cash at the beginning of the month
• Closing balance = the amount of cash at the end of the month

The opening balance of any month will always be the same as the closing balance of the previous month. If you are repeatedly opening months with a negative closing balance, you need to adjust your spending. Here’s an example of what ‘The Plew’s financials might look like in its first year of operation:

Startups’ business plan template example: cash forecast

8. Operations and logistics

Explain how your day-to-day business activities will be run, including key business partnerships around production and delivery.

A.) Production

List all of the behind the scenes information about how your business will operate. Include:

• Management team – who do you plan to hire as senior staff and why?
• Premises –  where will you be based? What will be the cost?
• Materials –  what materials/equipment will you need to make your product/service?
• Staffing –  how many employees will you hire? How much will they cost?
• Insurance – what insurance do you need for production?

B.) Delivery

Detail how your customers will receive your product or service. Include:

• Distribution –  how will you sell your product to customers?
• Transport –  how will you transport the product/service to customers or partners?
• Insurance –  what insurance do you need for delivery?

C.) Supplier analysis

Lastly, you should carry out a supplier analysis.  Write down 2-3 suppliers you plan to use as part of your business operations and evaluate them on factors like location and pricing.

In our example business plan for ‘The Plew’, the founders have chosen to present this information in an easily-digestible chart, breaking down the leadership and employees into two different areas: product development and operations.

Startups’ business plan template example: staffing section

9. Backup plan

Explain how you will manage any surprise losses if your cash forecast does not go to plan.

In the event that your business does not go to plan, there will be costs to incur. A backup plan outlines to potential investors how you will pay back any outstanding loans or debt.

In the short-term: 

If your cash-flow temporarily stalls, what steps could you take to quickly raise money or make savings? For example, by negotiating shorter payment terms with your customers.

In the long-term:

If you’ve noticed a drop in sales that seems to be persisting, what changes can you make that would improve cash flow longer term? For example, can you do more of your business online to reduce rent fees?

To placate investors even further, it’s a good idea to include details about potential support channels you can utilise (eg. a business network or contact) who might be able to help if you get caught in a sticky cash-flow situation.

Startups’ 5 top tips for writing a business plan

• Keep your predictions realistic. Your business plan should showcase your knowledge of the sector and what’s achievable. It’s not about impressing investors with big numbers or meaningless buzzwords.
• Don’t go over 15 pages. Business plans should be engaging, which means sticking to the point and avoiding a lot of long-winded sentences. Keep your executive summary to less than 1,000 words, for example.
• End with supporting documents. Use your appendix to include product diagrams or detailed research findings if these are helpful to your business case.
• Get a second pair of eyes. Everyone misses a spelling error or two – invite a trusted business contact or associate to look over your business plan before you send it anywhere.
• Leave enough time to write! It’s exciting to think about getting your business up and running – but planning is an important step that can’t be rushed over. Spend at least a month on writing to get all the details correct and laid-out.

At Startups.co.uk, we’re here to help small UK businesses to get started, grow and succeed. We have practical resources for helping new businesses get off the ground – use the tool below to get started today.

What Does Your Business Need Help With?

Designing a business plan is very important for laying the foundation of your business. Ensure you spend an appropriate amount of time filling it out, as it could save you many headaches further down the line.

Once your plan is complete, you’ll then be ready to look at other aspects of business set-up, such as registering your company. Sound daunting? Don’t worry!

Our experts have pulled together a simple, comprehensive guide on How to Start a Business in 2024, which will tell you everything you need to know to put your new plan into action.

• Can I write a business plan myself? Absolutely! There are plenty of resources available to help, but the truth is a business plan needs to reflect the owner's personal ambitions and passion - which is why entrepreneurs are best-placed to write their own.
• How long should a business plan be? We recommend your business plan is kept to a maximum of 15 pages. Keep it short and concise - your executive summary, for example, should be no more than 1,000 words.
• Is it OK to copy a business plan? While not technically illegal, copying a business plan will leave you in a poor position to attract investment. Customising your plan to your unique business idea and industry specialism is the best way to persuade stakeholders that you have a winning startup formula.

Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

• Essential Guides

Written by:

Leave a comment.

Save my name, email, and website in this browser for the next time I comment.

We value your comments but kindly requests all posts are on topic, constructive and respectful. Please review our commenting policy.

Related Articles

Existing Clients

Opening times.

Unlock Your Free Limited Company Expense Guide!

Save your seat live e-commerce webinar, how to create an effective business plan in 2023.

Professional Bio Templates & Examples

The mere thought of putting a business plan together can send even the most enthusiastic entrepreneur into a tailspin, but writing one can help you work out whether you actually have a viable business idea on your hands.

First and foremost, the person who must be convinced by your business plan is you. After all, if you’re not persuaded by it, why should anyone else be?

Once you’re sold on the basics, you can use your business plan to convince potential sources of finance, investors, partners, and employees that you’re the real deal.

This jargon-free article will give you a better idea of how to get the ball rolling.

Executive Summary

The executive summary highlights and emphasises the main points of your business. No more than a page in length, the executive summary needs to be succinct, compelling, and engaging - you want the reader / potential investor to be interested enough to read on and, even better, buy into your business.

This section should help the reader understand the purpose and passion behind your business. You’ll need to include brief outlines of:

• Your business name and location
• A short, simple summary of your business concept
• When were you founded?
• A description of your business’ competitive advantages
• Proof that there’s a market for your product or service
• A summary of the management team you’ve assembled
• A brief description of at what stage of development your business is in
• What is your background and experience, if any?
• What was your decision making process?
• When did the initial idea occur?
• Where will the business operate?
• How long is the lease, if you have one?
• Why - the mission statement of your business

You’ll be elaborating on most of these themes throughout the document, so keep it fairly succinct. Revisit the content once you’ve finished the rest of the business plan - you might find better ways to express your ideas.

Products and services

This is your opportunity to really wax lyrical about the core aspect of your business: what you’re going to be selling. You want complete belief from the reader that your product is the best out there, and for them to see why they should invest.

Here’s what you need to include:

• What is your product or service?
• Why should customers purchase from you?
• How do you aim to sell your product or service?
• How are your products manufactured?
• Do you have any exclusive deals or partnerships?
• What is your pricing strategy?
• What problems, if any, do you see with your product or service? What are the benefits to the customer?
• How will the product be sold - online or retail?
• What makes your product or service stand out?

Management team

Your business plan needs to detail specifically who is involved in your business.

You want this particular section of your business plan to highlight that you have a more-than-capable team running your business, a team that will use their expertises to make the business work and profit.

Make a list or tree diagram of people's responsibilities, and attach CVs as appendices if you feel this supports your choices.

You’ll need to include:

• Who owns the business?
• Who are the directors and shareholders?
• Who will be involved in the day-to-day running of the business?
• What experience do these people have and how will this benefit the business?
• Who is your management team?
• What experience do they have?
• Who has direct reports?
• Do you have any vacancies yet to be filled?
• What is your recruitment process?

The marketing section is key in showing a potential investor that you know how you will bring in custom. It needs to show you’ve thought about how to get people interested in your business, and what makes it different from competitors in your market or area.

How you promote your business will differ depending on how you’ll make sales. If you’re opening a shop you’ll need to employ some local marketing techniques (think print adverts, flyers, broadcast media etc.) but if you’ll be selling online you should consider search marketing and social media promotion.

What to include can be broken down into four sections - the four P’s:

Who are you aiming your product at? Who is your target market? For example, “22-34, London based, interested in photography and male”.

What is the price of your product/service? How did you arrive at this price point?

How does this compare with other products in your market? What budget have you set aside for marketing?

How and where are you going to distribute your product/service? Retail, wholesale or online? For e-commerce, you’ll need to show you can drive traffic to your website, and with retail you’ll need to show you understand the importance of putting your product in the right shop/area.

‍ Promotion

How are you going to promote your business? How and where will you advertise?

Think about the methods mentioned in the opening paragraph - will any of these help get your business noticed?

The operations section of your business plan deep-dives into the logistical side of your idea. It highlights that you have thought concisely about the day-to-day running of your business. It needs to highlight and set clear expectations of exactly how your business will operate, and include details of the following:

Now is the time to be more specific about where you are based. Are there any works that need carrying out? Is there adequate parking? What licence do you need (if any)? Is there scope for you to develop a hybrid working space - could this suit your goals and how would it function?

Facilities and utilities

Does your location have internet access? Who will supply your water, gas and electricity?

How will you store and track your assets, stock, equipment?

What are your hours of trading? Are these flexible?

What payment systems will you have in place? Do you accept AmEx or contactless?

Do you need to invoice clients?

How many members of staff will you need? What will their duties be?

What is the customer journey? What is your refund policy? How will customer complaints be handled?

Financial Plan

A financial plan helps a potential investor think about whether they are likely to get a healthy return on investment (ROI). For this reason, it’s likely to be the most scrutinised section of your business plan.

If your business is brand new, think about how you’ll show predicted earnings - or you might want to outline any plans to scale up, including any intentions you have to access help in the form of an unsecured loan to grow your business . You could even look at a company similar to yours and what their earnings have been to compare. You’ll also need to include details of the following:

Profit and loss

Also known as an income statement, the profit and loss statement measures just that: the profit and loss of your business over a specific period. This takes information from the following equation:

Revenue - Cost of goods - Expenses = Net

Cashflow shows how much money is going in and out of your business. Think of cashflow as money management. Much like your personal finances, you need money coming in before you can take money out. If you spend money you don’t have coming in, this will amount to debt - this isn’t something an investor will look favourably upon.

Balance sheets

Compiled on an annual basis, the balance sheet gives a picture of the financial state of your business. Include assets, liabilities, and equity (see glossary on next page).

Sales forecast

Forecasting shows the depth of knowledge of your business. Break this section down into manageable parts, showing estimated sales by month over 12 months, then each year over five years. As with profit and loss, it’s important to be realistic, otherwise you will lose credibility.

Glossary of terms

Unsure of the difference between cash-flow and capital? While we do our best to avoid jargon, it’s important to understand the terminology when starting a business. To help you write your business plan, we’ve compiled a glossary of the most-used business terms and have provided easy-to-understand definitions.

An item owned by a business that has monetary value, for example, property, cash in the bank or inventory.

Lists the assets, liabilities, and equity of a business in order to calculate net worth.

An organisation that trades in goods or services.

Wealth owned by a person or business that is available for reinvestment in the company.

The amount of money being transferred in and out of a business.

A person who runs a limited company, often owning shares in the company.

A person who works for wages or salary in a business.

A person who employs people and pays them a wage or salary.

The value of the shares issued by a company.

Financial forecasts

A calculated estimation of future financial outcomes for a business.

A business licence granted by a company that enables a party (franchise) to market its products or services. For example, Ben and Jerry’s is the company, and the parlours where you buy the ice-cream are a franchise.

The items or stock owned by a business.

A person who invests money or capital into a business with an expectation of future financial return.

A company’s legal debts, for example, loans, mortgages or accounts payable.

Limited company

An organisation set up to run a business, which is responsible for everything it does. Finances are separate from personal finances, and Directors are responsible for decisions which affect the company.

Total assets of a business minus total liabilities. Determines the value of a company, for example, a business has £50,000 in cash, £200,000 of inventory and £20,000 in savings = £270,000 in assets. The business also has a £100,000 mortgage and £10,000 credit card debt (liabilities). Therefore the total net worth is £160,000.

An account showing a businesses net profit and loss over a given time frame.

Prediction of future sales.

Shareholder

A person who owns shares in a company or business, whose rights are often governed by a Shareholders’ Agreement.

A portion of the company’s ownership divided amongst shareholders, giving the owner a proportion of the company.

Sole trader

A person who is exclusively the owner of a business and solely responsible for all profits and losses of that business.

A new business.

Target market

A group of consumers at which a product is aimed. For example, sweets are often aimed at a target market of small children.

Umbrella company

A company that acts as an employer to agency contractors and processes their payments.

Keeping track of your accounting & finances

Ensuring you have a great accounting and financial plan is essential. Using a simple to navigate accounting system can be a perfect option. Why not consider using Crunch’s software ? Not only is it easy to use, but it also comes with support from our experts who can guide you through your accounting tasks and tracking your finances. We also have a ton of Crunch integrations , providing our clients with even more tools to run their businesses efficiently. For example, our integration with financial forecasting software Brixx allows you to project your business's financial future so you can test scenarios and be prepared for any eventuality. This is also a great tool to have when preparing your business plan.

We're comitted to helping new businesses thrive, and to encourage this we've shared lots of free resources - from in-depth business guides to blank invoice templates , we're here to help you succeed. To find more ways that Crunch can help make running your business effortless, join us online for 14 days completely free, or get in touch with our friendly advisors at a time that suits you. Alternatively, read our complete free guide to writing a business plan for lots of in-depth, interesting insights and considerations.

Speak to an accounting expert

Related knowledge, more from our knowledge.

How your employment can come to an end - for employees

The Story of Crunch: From an Old Computer Under a Desk, to £150 million Online Accountancy Firm

Why businesses fail - and how you can avoid it happening to you

Knowledge hubs.

Demystifying tax for businesses and individuals alike. Stay informed about tax regulations, discover effective tax-saving strategies, and ensure compliance with our comprehensive tax guides and tips.

Starting a Small Business

Launching your own venture? Navigate the startup journey with confidence using our detailed guide. Learn the essentials of starting a small business and set yourself up for success. Powered by Crunch.

Running a Small Business

Navigate the complexities of entrepreneurship with ease. Discover essential tips, strategies, and resources tailored for successfully running a small business in today's competitive landscape.

Hub Categories

Business tax, contracting, contractor tax, cryptocurrency tax, freelancing, hr & operations, insurance & risk, legal matters, limited companies, managing finances, marketing & growth, personal tax, self assessment, software as a service (saas), sole traders, tax reliefs, take control of your accounts, today.

Award-winning software with support from expert accountants

Just 1%+VAT of your money earned. No monthly subscriptions! With CrunchONE

Get your tax return sorted by experts for only £100+VAT!

At Crunch we provide affordable cutting-edge, easy-to-use software with real human support from expert chartered accountants. That’s probably why 81% of our clients would recommend Crunch.

Book a call with our one accountants and get your questions answered. Just £24.50 +VAT for Crunch Free users.

Crunch’s Self Assessment service provides an expert accountant to complete, check, and file your Self Assessment for you for just £100 +VAT.

Why not see for yourself? It’s simple and easy to use and 100% free .

• Login / Register

Already a member?

Remember Me

Login Forgot password?

Want to become a member?

What are you looking for, how to write a business plan uk | free uk business plan template.

• Brought to you by AAT Business Finance Basics

• 1. What is a business plan?
• 2. Download: Free UK business plan template
• 3. Getting started on a business plan
• 4. How to structure a business plan step-by-step
• 5. Business plan examples
• 6. Business plan writing tips

You’ve got the brilliant business idea, you might have even started setting up or running your business, but writing a business plan and creating business proposals are vital for the launch and growth of any venture. It’s a document where you can organise all your ideas, create a company description, make sure that you’ve considered and researched everything, and ultimately decide that the business is viable. Commitment to making a business plan is a commitment to the business. Read our guide and download your free business plan template. 

What is a business plan?

A business plan is a document that details all the future plans and predictions for your business. It will explain your ideas, map out how they’ll be put into practice and provide relevant information and facts including the business details, management plan, operating plan, marketing and sales strategy , financial projections, and operational and team specifics.  

A business plan is essential in helping you: 

The business plan is a living, working document that should be read and reviewed regularly. If there are multiple directors or partners in the business then they should all be in agreement with what the plan outlines, the detailed information in the plan, and what is written in the plan. You will also need to share it with potential investors. The business plan will formalise all the ideas and assumptions, keep you focused, and ensure that everyone is on the same page.

How long writing your business plan should take will depend on your business size, the complexities of it and what stage you’re at. The most important thing is that it’s user-friendly and doesn’t include any waffle. Get straight to the nitty-gritty so that your stakeholders are engaged when reading it and so that you are more likely to use and update it regularly. Your business plan will probably cover the first three to five years. It’s important to include all the right information (see the checklist below) but it’s not a document to spend too long on. It’s more important that you are spending time running the business.

There are lots of business plan examples out there but typically yours should include: 

• What your business will do 
• The business structure and operations  
• Team members and their expertise 
• Market analysis to see current and projected state of the market and industry
• How your business will sell and market  
• Startup costs and funding required 
• Financial projections 
• Legal requirements 

Writing a business plan will allow you to take a step back and look at the business more objectively, predicting potential issues in advance, such as financial forecasts, and coming up with solutions or a shift in how you originally thought that you would do something.

Download: Free UK business plan template

We want to take the stress out of writing a business plan. Our free downloadable UK business plan template will guide you on everything you need to include and get your business primed for success. 

Download: Please login or register to get your download.

Login or Register

Getting started on a business plan

Before you begin to make your business plan, keep these three things at the forefront of your mind. 

Focus on what makes you unique

Be creative with your plan, shout about your unique selling proposition (USPs) and what makes you different. Represent your brand using language and visuals, and talk about why you and your team are best to run this business.

Don’t over complicate it

Keep it concise so that you can get on with running the business and so the business plan is an easily readable and usable document. Too much detail in the plan can become confusing.

Be realistic and honest

The business plan will give you an indication of where you’re supposed to be. Review it every few months, update it as you go and change your activities in line with it. It will be impossible for you to predict everything so just give it your best shot and be prepared to be flexible.

How to structure a business plan step-by-step

The business plan should follow this format with these six sections. 

You must be logged in to use this checklist

The executive summary should always be written last. Think of it as a one-pager giving an overview of all the best bits of your plan. If the executive summary doesn’t captivate and interest the reader then it’s unlikely that they will read the rest of your plan. 

Describe your what, where, who and why - including your product/service, brand, location, business model and size. 

This section will involve the most amount of research as you study the current and projected conditions of the market and the industry, and look at what your competition is doing , before making your own marketing plans . 

Explain the experience, skills and credentials of all the people involved. Why are they the right people to make this a success?

Detail your required facilities, premises, systems and software. 

This section translates everything into numbers - your startup and running costs, funding , revenue projections with a cash flow forecast . 

Business plan examples

Take a look at these business plan sections in more detail to see examples of the sort of details you should include, depending on your type of business.

1. The executive summary

Give a topline description of:

• In the most basic terms, what is the business? Is it a product or service? What does it do and how?
• Why is there a need for this business?
• What does this business do better than similar existing businesses?
• What experience or skills do you have that will help make this business a success?
• How will it make money?
• Who will your customers be?
• Who are your main competitors?
• How will people find out about you?
•  What is the opportunity for investors?

2. Business details and description

• Describe your what, where, who and why – including your product/service, brand, location, business model and size.
• Food (lunch / dinner)
• Private hire for meetings / parties / events
• Putting on own events (music, comedy)
• Classes (e.g. cocktail making)
• What will the legal structure of your company be (LTD, PLC, sole trader, partnership, charity, social enterprise)?

3. Marketing and sales strategy

4. management and employees.

• Who will make up your team and what relevant skills and experience do they have?
• Do you need to employ people?
• What friends/family/business contacts do you have with skills that might be able to help you (preferably for free)?
• Do you need to outsource anything?

5. Operational set up

• What premises do you need? Where will they be? Where will you work from?
• What assets/tools do you require (and which of these do you already have)?
• Are there any licences that you require? Any other legal considerations?

6. Financial plan and projections

Business plan writing tips.

Writing a business plan can take some time and some areas of the plan will be easier to tackle than others. 

• Make initial notes every time you think of something and don’t worry if you can’t cover all points at the start.
• When you are ready to start to write the plan, make sure you use sections and these are in a logical order.
• It is important that your plan is simple, accurate and easy to follow if you are going to ask others to look at it.
• Try to avoid jargon or terms that only people in your type of industry will understand.

Share this content

Brought to you by:, aat business finance basics.

AAT Business Finance Basics are a series of online e-learning courses covering the core financial skills every business needs. They draw from AAT’s world-leading qualifications and will quickly build your knowledge on key topics including bookkeeping, budgeting and cash flow.

Recommended reading

How to start a business in 20 days, how do i get funding for a new business, how do i create a business marketing strategy, register with informi today:.

• Join over 30,000 like-minded business professionals.
• Create your own personalised account with curated reading lists and checklists.
• Access exclusive resources including business plans, templates, and tax calculators.
• Receive the latest business advice and insights from Informi.
• Join in the discussion through the comments section.

Login / Register or Subscribe for Updates

How to write a business plan

According to Barclays, only 47% of small businesses in the UK have a formal business plan in place that is written down or recorded.

And we understand, it's so tempting to jump straight into building a business; formally documenting it sounds exhausting and unnecessary. But before you jump in headfirst, you need to gain clarity around the market you're hoping to enter, pinpoint your target customers and figure out whether your product is viable.

And that's precisely what a business plan can help you do.

Without that information, you stand to waste time and money on a business idea that lacks real thought or structured direction. For example, did you know that the most common reasons for business failure in the UK include lack of funding, cash flow problems, and not having a structured business plan?

Please don't fall into the trap of jumping straight in; let's start planning.

So, firstly, what is a business plan?

A business plan is a formal document outlining your business idea — it’s a process that can help you work out whether your small business is viable, e.g. is there a market out there for your product? Can you adequately compete in the current marketplace? And what does your target market look like?

These are the kinds of questions you need answers to before starting your new business venture.

Do I need a business plan?

If you plan to set up a small business, let’s say an Etsy shop, then you might not think it’s necessary to create a business plan. But, if you’re planning on bringing partners on board, accessing financial help or approaching potential investors — then chances are, you’re going to need a comprehensive business plan. After all, who wants to invest in something that’s no more than an idea?

Even if you don’t plan to bring investors on board or apply for business grants, mapping out a path to business success can be helpful regardless of your business idea. Even if it’s just so you know what associated costs you can expect to fork out on.

Having a bona fide business plan can help you get your ducks in a row.

More reasons why you should consider writing a business plan:

• To understand the marketplace and for solidifying what makes your business different
• To understand your customer and their motivations for buying a product like yours
• An idea of how much money you can make and how you’re going to get there
• To identify and mitigate risks associated with your business idea
• To help build a roadmap for getting your business off the ground

The above are just a handful of reasons, but if you can identify with any of them, then chances are, you’ll need to create a business plan.

But we’ve got good news; writing a business plan might seem daunting, but we’re going to walk you through a simple layout template. So follow along and make notes as you go. Before you know it, you’ll be well on your way to making your business idea happen in real life.

Before we talk you through how you should structure your business plan, we’re sharing a few tips you should consider as you write it.

Keep it simple

When writing your business plan, you want to cut straight to the important bits, keeping it concise and trimming any flowery language or long sentences. You also need to be mindful of jargon or unexplained industry acronyms; remember, it has to be quick and easy to understand.

Keep it professional

You don’t want to write your business plan flippantly; it’s a document you should take seriously. Lay out your document with headings, numbered pages, and a cover page. You want whoever reads it to be able to find what they’re looking for.

Keep it error-free

When it comes to financial projections and market analysis, you need to make sure your information is spot on, so we’d advise giving the plan a thorough proofread and fact check. Then, read and re-read to ensure it’s up to scratch — because it might not just be you reading it, it could be your future business partner or passed around potential investors.

How to layout a business plan

Now the all-important part, actually creating a business plan. We’ve broken down the contents of a business plan into six sections:

• Executive summary
• Goals, vision and mission statement
• Market research
• Sales and marketing plan
• Financial projections
• A roadmap of your business milestones

1. Executive summary

You should be able to hand your business plan to anyone, have them read the executive summary, and they should grasp a pretty good idea of your business plan. It should inform the reader what they can expect from your business plan and, if it’s written well, it can pique their interest from the start.

In your executive summary, you’ll want to include your business’ purpose, your vision for the company, your goals and objectives. You’ll need to briefly introduce the product or service you’re hoping to sell and why you think it’s a viable business proposition.

Basically, it’s a watered-down version of your entire business plan, so it can be a good idea to write this section last.

2. Goals, vision and mission statement

In this section, you should start by briefly describing your mission statement. According to a retired professor of strategy and governance at McMaster University, Chris Bart , three key components make an impactful mission statement :

• Your target audience
• The product/service you’re selling (and how it solves a problem)
• Your business USPs (why would people buy from you over competitors?)

You should also set out your long-term and short-term vision for your business — what does an ideal yet realistic future look like for you? What goals are you setting for yourself in the first few years? Why are these goals important to you?

3. Market research

Before you jump into any new business venture, you need to see if there’s actually a market for it, and that’s where market research comes in.

In your market research section, you’ll want to demonstrate that you know the market you’re targeting and what they look like. What age bracket do they belong to? What’s their income? Why would they purchase your product?

Understanding your target market is crucial to a successful business; without this knowledge, you’re building a business on shaky foundations. There are plenty of data sources to help you explore data trends and demographics, including Statista , ONS Census , and Gov.uk .

You’ll also need to include competitor research to show you’ve thought about what brands are already out there and how you see yourself slotting into the market. To conduct competitor research, you can undertake a PEST analysis to highlight big external factors that could affect your industry or your business directly: political, economic, social and tech. And you can also perform a SWOT analysis, which helps you determine strengths and weaknesses (internal) and opportunities and threats (external).

These frameworks are here to help guide you through your market research.

4. Sales and marketing plan

So now that you’ve identified your target market, how are you going to spread the word about your business? A solid sales and marketing plan is vital. It’s easy to waste budget trialling new channels, so take your time and understand which sales channels you’re going to focus on and think about the marketing tactics you’re going to use to capture and convert customers.

When firming up your marketing plan, it’s good to use the 4 Ps of marketing as a guideline. P rice, P lace, P roduct and P romotion. All four overlap each other.

You need to outline how you’re going to price your product and why, where you’re going to find these target markets, the product and its USP and the problem or need it addresses, and finally, promotion. How are you going to promote your product to that target market?

5. Financial projections

Without financial projections, investors or partners can’t come on board; it’s too risky. In your business plan, you need to layout your cash flow projections and discuss any capital you need to raise.

As a startup business , you haven’t got past sales to make accurate predictions, which can be tricky. But that doesn’t mean you can’t use your market research to inform future projections.

You should know about the state of the industry you’re looking to compete in; you can analyse industry trends and use your competitor analysis to get a crystal clear picture of pricing strategies and gaps your product can fill.

Break down your financial projections by monthly sales — when you’re into your second year, you can start breaking them down by quarter. Include how many units you sold, the price you sold them at, and predicted monthly sales.

You should also include cash flow projections. Again, difficult when you’re just starting out. But in your business plan, you need to show that you’ve thought about any revenue lags. For example, if you rely on invoice payments, take into account it could take your client between 30 and 120 days to pay the full invoiced amount. Make sure you’re aware of these pockets where expenditure will come out of your account before you’ve been paid.

6. A roadmap of your business milestones

Once you’ve researched and filled in each section of your business plan, it’s helpful to write a timeline of when you expect to complete certain milestones. For example, milestones could include deciding which structure your company will take, registering your business, and building a website, setting up marketing channels and designing and printing product packaging.

This section can be used to summarise all the milestones you want to achieve and by when keeping you focused and pushing the business forward and into fruition.

Where can I get a free business plan template?

Sometimes, when faced with writing such an important document, it can be tricky to know where to start. Luckily, there are plenty of free business plan templates available online . We’ve included links to a handful below:

• Barclays free business template [PDF]
• The Prince’s Trust free business template
• HubSpot free business template

Before you go

Hopefully, you’ve got an idea of how to lay out your business plan from scratch. Take it from us, writing a business plan saves time and money down the road; it’s best to put the leg work in now.

If you’re looking to access a startup loan to help you grow, we can help you. We’re brokers, which means our loan comparison service is 100% free for you to use. Apply in minutes and see funds in as little as 48 hours. Read more about startup loans .

About the author

Money Writer

Helen has over nine years of experience in content writing and writes financial content for us here at Capalona.

Share this guide?

Related articles.

Yearning for self-employment? 10 viable business ideas for 2024

Looking for your first office space? Advice for businesses

How much does it cost to start a business in the UK?

The ultimate guide to starting a business

Checking won’t affect your credit score

We value your privacy

We use cookies to enhance your browsing experience and to analyse our traffic. By clicking "Accept All", you consent to our use of cookies. Read our privacy policy and cookie policy for more information.

How to write a business plan

Writing a business plan will help nail down your idea and give you a blueprint for executing it.

What is a business plan?

A business plan describes your product or service, identifies who the customer is, explains why they need your product or service, and shows how you’ll make money from that opportunity.

Why write a business plan

How you write a business plan will depend on what you need it to do. There are a couple of key jobs a business plan can have. It can:

• explain a business idea
• convince lenders or investors to put money behind that business idea

It doesn’t take a book to do the first job. You can write a business plan that’s short, to the point, and easy to update. That may be all you ever need. But if you’re going for funding, your business plan will need to be a good deal longer and more comprehensive.

Why every business should start with a one-pager

Even if you will eventually write a long business plan, a one-pager is a great place to start. It could take as little as an hour to do your first draft and will make your idea stronger. Writing about customers, competitors, income and expenses will help develop your thinking.

How to write a one-page business plan

You’ll see in the example below that there are nine sections, or things to write about. So give yourself just a small space to write about each. Keeping it short will help you focus on what’s important.

Download a one-page business plan template.

When you need a longer business plan

The greater the risk you’re taking, the more comprehensive your plan should be. For instance, you’ll need to write a long-form business plan if you’re going to fund it with other people’s money. Banks and investors will expect it.

How to write a longer business plan

Long-form business plans touch on all the same things as a one-pager, but they go into more detail and contain fewer assumptions.

Back-of-the-napkin numbers are replaced by forecasts and budgets. And guesstimates for things like costs, market size, customer preferences, and competitor weaknesses need to be backed up with proof. It’s a good idea to involve an accountant or bookkeeper in developing the budgeting and finance sections.

Contents of a business plan:

• Executive summary: A short summary of the main points of your business plan. Write it last.
• Company overview: Identify your industry, what you’re selling, and how you’ll charge.
• Products or services: Include a description of the problem you’re solving for customers.
• Market analysis: Describe your target market, and examine the competition.
• Risk assessment: Flag potential hurdles (including assumptions that could be proved wrong).
• Marketing and sales plan: How will you find customers and make sales? How many sales will there be?
• Milestones: What needs to happen and when?
• Progress reporting: When and how will you report against the milestones?
• Team: Who will be involved in the business? Note their skills and responsibilities.
• Budget: Estimate your costs and income (and any debt that you plan to take on).
• Finance: Show how you’ll fund the business.

You can also add an appendix with any supporting or background documents.

Make a start by downloading our free business plan template.

How not to write a business plan

Avoid these common business planning mistakes:

• Underestimating how much money it will take to get started
• Failing to budget for the first few months of operation (before revenues start flowing)
• Expecting sales to ramp up too fast
• Relying too heavily on one or two customers (or suppliers)
• Not including contingencies for unexpected delays or costs

For more information, visit the gov.uk page on writing a business plan , which comes complete with templates to help get you started.

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

How to start a business

Thousands of new businesses open every day. If all those people can do it, why not you? Here’s what to do, and when.

Your business idea is clearly inspired. But it helps to check you’re not the only one who thinks so.

It’s time to run some numbers on your business idea. Budgeting and forecasting help with that.

Your prices can influence the number of sales you make and the profit you earn on each transaction.

Your business structure can affect how much tax you pay, and how you're treated by the law.

If you’re starting a business, then you’ll need to get familiar with some accounting basics.

After all the excitement of deciding to start a business, you’ll have some paperwork to do.

Treat your website like an online version of a storefront. It’s the first impression for many customers and prospects.

Now that you’re in business, you want to stay there. Xero’s got resources and solutions to help.

Download the guide to starting a business

Learn how to start a business, from ideation to launch. Fill out the form to receive this guide as a PDF.

Privacy notice .

Start using Xero for free

Access Xero features for 30 days, then decide which plan best suits your business.

• Included Safe and secure
• Included Cancel any time
• Included 24/7 online support

Or compare all plans

Small Business UK

Advice and Ideas for UK Small Businesses and SMEs

How to write a business plan

Here's how to nail your business plan

HSBC - Advertising feature

It’s an important first step for any new business but what are the key ingredients of a robust business plan? Carrie Taylor-Mell, Team Manager for Small Business Banking at HSBC UK and Stefan Johnson, International Trade Finance Manager for HSBC UK, share their insight and expertise on this vital topic

Why do you need a business plan?

The main thing a business plan does is make you plan! “Writing a business plan forces you to review everything at once,” says Stefan. “Your value proposition, marketing assumptions, operational plans, financial plans, even your staffing plans.” It helps you take a step back from your business and evaluate things, and can give you clarity about the goal of the business. Thinking about your business on a deeper level in this way, can also help you spot gaps or challenges.

A business plan enables you to plan ahead, tracking progress, achievements and milestones. It’s a way to lay strong foundations for your business. A well thought through business plan can also help you attract talent and investors, and explain your business – it’s not just about accessing funding.

What makes a good business plan?

“Make the plan professional,” says Stefan. Remember that first impressions count.

Start with an executive summary. Keep the business plan concise. “Overly detailed business plans are often quickly shelved,” he adds.

Make sure you’ve checked the plan and corrected any errors. Include a cover and have a contents section so the plan is easy to navigate.

Don’t promise something you can’t deliver. “Be realistic and back up any claims with evidence,” says Stefan. This includes thinking about what might go wrong and assessing and mitigating risks. 

Be flexible too – circumstances might mean your business plan needs to change. And just like your CV, you should update your business plan as your business develops and grows.

What to include in your plan

These are some of the key ingredients you need to include in your business plan:

• Business and products

Give some background, for example, details of when you started and the structure. It’s really important to also talk about yourself. What makes you and your business different? Describe your product or service and give details of your experience in the industry.

• The market and your competition

Talk about any customers you already have lined up. Explain the competition and why customers will come to you rather than them. How do you stand out from all the other businesses out there?

“The easiest way to stand out is you. You are your business. Put your passion on that paper,” says Carrie.

• Marketing and sales

What is your pricing policy? How do you plan to sell? Explain your supply-to-end user journey. What kind of marketing are you going to do? For example, social media or direct marketing?

• Management and personnel

Set out the team structure and the key skills of staff. Be realistic about workloads.

Do you have an office space? Mention accounts and IT systems and even regulations you need to meet. 

• Finances and SWOT

The financial forecast displays your business in numbers across the short, medium and longer term, showing desired turnover and the profit you’d like to achieve, as well as anticipated costs. Using tools such as those available through HSBC’s award-winning business banking app. The HSBC Kinetic Current Account*, can help you manage your business finances with helpful cash flow forecasting to make informed decisions.

“Set honest and achievable goals,” says Carrie. “If you won’t make a profit in the first 12 months, say so. There’s absolutely nothing wrong with that if your business is going to achieve long-term goals.”

Use SWOT analysis (strengths, weaknesses, opportunities and threats), and identify key objectives that will make a significant difference, and stick to them on a specific and planned timescale.

Final thoughts

“Be yourself. Be determined. And let the passion for your business shine through,” says Carrie.

However, aside from the paperwork and planning, starting a business also requires resilience. Carrie reminds entrepreneurs to be kind to themselves:

“Anything worth having takes hard work and dedication. So don’t be so hard on yourself if some days don’t go to plan. Dust yourself off, get back up, go back to the plan, readdress your focus and go again.”

HSBC Kinetic brings you more than just a business bank account – it aims to make business banking simpler and faster, giving you the freedom to run your business. It’s designed around the small business owner and alongside the features you’d expect such as making and receiving payments, and managing standing orders, it also gives you control of your business finances with categorised spending and cash flow insights.

HSBC Kinetic also offers customers a little help to kick start their business – by teaming up with some great partners that offer everything from discounted business broadband to inspirational office space. Full details available in the HSBC Kinetic app.

You can apply for a new business account in minutes with HSBC Kinetic. So if you’re a sole trader or single director shareholder limited company, find out more at business.hsbc.uk .

Simply download the HSBC Kinetic app and apply in minutes.

*HSBC Kinetic is subject to eligibility and Credit Check. Terms and conditions and fees apply.

This article was written as part of a paid-for advertising content campaign with  HSBC .

How to get more from your business plan

Related Topics

Related stories.

Business management

How to create good cashflow habits

Partner Content

Boost your chances of getting R&D tax credits – despite the crackdown

Darryl Hoy explains what R&D tax credits are, how they've changed and how to increase your chances of success, despite the crackdown

Business car leasing

Company car insurance rules

What is the difference between fleet car insurance and business car insurance? As an owner-director of a small business, which one is right for you and your employees?

Blue Monday and employee morale: moving beyond the gimmick

Blue Monday is often disregarded, but it can be helpful in improving your employees' morale throughout the year.

Anna Jordan

Should your small business adopt remote working?

Stefano Maifreni, founder and CEO of Eggcelerate, explores the arguments around remote working and whether it's right for your business.

Stefano Maifreni

How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 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 business planning

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

You understand that planning helps you: 

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

As you start to write your 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 completing your 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

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

• 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

This 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

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

Last, but certainly not least, is your financial plan chapter. 

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 for your 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

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

Download Template

One-page plan template

Download a free one-page plan template to write a useful business plan in as little as 30-minutes.

Sample business plan library

Explore over 500 real-world business plan examples from a wide variety of industries.

View Sample Plans

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 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.

Having 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 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
• Templates and examples

Related Articles

1 Min. Read

How to Calculate Return on Investment (ROI)

7 Min. Read

How to Write a Bakery Business Plan + Sample

5 Min. Read

How To Write a Business Plan for a Life Coaching Business + Free Example

3 Min. Read

What to Include in Your Business Plan Appendix

The Bplans Newsletter

The Bplans Weekly

Subscribe now for weekly advice and free downloadable resources to help start and grow your business.

We care about your privacy. See our privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

• Human Resources
• Procurement

How to write a business plan

Learn everything you need to know to create a great business plan including what to include, how to structure your plan and how to write for your audience.

Related posts

• 106 Online business ideas you can start today
• Business banking: Best banks and accounts for UK businesses
• Business plan writing tips & advice for the avid entrepreneur

Starting a business is one of the hardest decisions anyone can make. After all, there is most likely no finer way to leave one’s professional comfort zone. From this point on – all of the decisions are your own. While that does mean reaping all of the rewards when things go well – it also means being responsible for anything that should go wrong.

Writing an internal business plan

Business plan writing tips & advice for the avid entrepreneur, why is a business plan important and who is it for.

You may be familiar with David Copperfield ’s 3 P’s of success: passion, preparation and persistence. It is a clichéd but powerful message and applies perfectly to getting into business. For most entrepreneurs, passion comes in abundance, but the key to success lies in meticulous preparation. This is where the business plan steps in.

Regardless of the type of business idea, you plan to develop; one thing is certain – to make it a reality and success, there will need to be a lot of thorough and thoughtful business planning involved. At this point in your first stages of business development, you will encounter the term ‘business plan.’ Naturally, like most entrepreneurs, you may not be familiar with the intricacies of writing a business plan; nor its gravity for the success of your enterprise. If you’d like to skip ahead to a particular section, please find details of contents and quick links below:

What is a business plan?

Write for your audience, how to structure a business plan, executive summary, business background, product/service, market breakdown.

• Marketing strategy

The proposal

• Finance and forecasts

Risk analysis

Supporting evidence.

Writing, formatting and presentation

A business plan is a document detailing the objectives of your business and the strategies you will undertake to meet those objectives. A stranger should be able to pick up your business plan, read it through and have a very distinct picture of what your business is, how it runs and how it will succeed.

Why is it important?

Entrepreneurs repeatedly underestimate the importance of a solid business plan. It is an essential step to:

• clearly define your business idea and premise
• set out the goals of the business and its route to achieving said goals
• identify potential issues and opportunities within your chosen market or product
• determine the viability of the business

A business plan is typically produced to provide a clear roadmap to build a successful business or to secure funding to start said business. It is an essential resource for management or any potential investor, allowing them both to make informed decisions.

Aside from attracting investors or providing a clear plan to success, writing a business plan is a crucial exercise for any business owner. It obliges you to scrutinise your idea and to measure the commercial viability of your proposed business model. It will help you spot any holes in your model and iron out any issues before they arise. It should answer the questions: will my business actually work and, if so, how?

Now that you know the critical importance of a business plan, as with all complicated endeavours – the first question is simple. Where to begin? This guide will take through all the key facets of a business plan, starting with who it’s for.

A business plan is no different from any other piece of writing: for it to be good, the author must know their audience. While a business plan is certainly no piece of prose – it’s critical that your plan communicates the right information for the right reader (in some cases, this can mean developing multiple business plans).

You need first to consider who you are writing for, as different information will be pertinent for different audiences.

To do this firstly, establish your target audience and secondly, identify what you want from them. This will greatly influence what you write and how you present it. At every stage, ask yourself if what you have written provides the reader with the right information. If the answer is no, you will need to figure out why. The common audiences for a business plan are as follows:

Angel investors

• Managing Director

Commercial banks

• Venture capitalists
• Potential business partners

Prospective key customers

Critical suppliers, strategic allies.

Below is a breakdown of each with insight into their mindset/goals along with advice on how a plan should be tweaked/structured to each audience.

Entrepreneurs most commonly produce a business plan with fundraising in mind. Generally, if you are looking for an investor, you will want to focus on the low risk and great returns of your business idea.

Angel investors are the most common type of investor and are typically high net-worth individuals (from a finance, family or entrepreneurial background) who provide financial backing for new or small business ventures, in exchange for ownership equity.

Typically, angel investors look for a significant return on their investment within 5 to 7 years. One advantage of approaching angel investors is that they are almost always prepared to take bigger risks than banks. Another benefit of angel investment is that there is no obligation to pay back the investment if the venture goes under. However, angel investors are purchasing a stake in the business which equates to a degree of control in the project. They’ll have a say in how the company is run.

Managing Director (CEO)

A business plan can also be a tool to help you run your own business. Internal business plans concentrate on personnel, departments, the structure of the firm, management objectives and wider company targets rather than specific financial details.

Producing an internal business plan is an important step in helping to focus your vision, determining problem areas in how the company is run and highlighting what can be improved. By the time you’ve finished writing it, you should have a far more polished business model (the internal business plans will be covered in greater detail later on, expanding on this).

If it’s a business loan you’re after, know that innovative ideas and ambitious concepts alone don’t wash with banks.

Bankers are usually much more formal when it comes to reviewing business plans. In other words, they won’t take much stock in impressive resumes and innovative concepts; they will be more focused on the financial merit of your business plan. They want to ensure your plan is financially sound.

With commercial banks pay most attention to your financial section. Provide detailed cash flow statements and balance sheets and keep your cash forecasts realistic.

When managers inside your own company read the business plan, they will likely use it as a reminder of the company’s core objectives, or to monitor the performance of the company in specific market conditions. They will be most interested in the vision and mission statements, as well as the overview/analysis of economic factors and current industry conditions.

As explored in more detail later on, the internal business plan that managers use inside the company itself differs from the external business plan in both scope and content. While they can both make use of a shared information pool, using them interchangeably is not advisable, nor will it achieve any meaningful results. Investors are interested in seeing something different than new employees or hires when they look at the business plan of a company, and keeping that in mind is essential.

Venture capitalists (VC’s)

VC’s are professional investors who invest private capital (typically much larger than angel investment) in exchange for an equity stake. VCs are attractive as they can often offer larger sums of money and have a greater aptitude for risk.

Again, they are likely to take bigger risks than banks and again, should your start-up fail, in almost all cases you’re not obliged to pay back their investment. Venture capitalists are well connected and can also offer ample business knowledge and skill.

However, venture capitalists are looking for serious growth and return, so you’ll need to prove that your business has the scope to expand exponentially. Be aware that VCs expect sizeable returns, and will be looking for a foreseeable exit, often in the form of selling shares or acquisition.

A business plan seeking venture capital must therefore include an exit strategy and focus on opportunities for growth. Bear in mind that professional investors receive thousands of business plans. You’ll likely only be afforded a quick scan, so it’s imperative that your plan is concise, relevant and is quick to highlight your best-selling points.

Potential business partners (co-founders)

You may be after a business partner. Key issues for prospective partners centre around share of ownership, division of responsibility and what this means for the share of overall control. Business plans used to this end must focus on providing a comprehensive picture of the structure of the business.

While there are fewer reasons for end-consumers and other customers to read your business plan, they may still do so. For example, they might be thinking about forming a long-term business relationship with you or making a similarly big commitment (most common in a B2B environment).

Naturally, they will be most concerned with how your business builds relations with other customers – and potentially also suppliers.  With that in mind, you will want to provide greater depth in these sections.

Above all else, as a new company, key suppliers will want to be sure your business can pay it’s bills (before providing favourable credit terms). Thus, you should include adequate financial reports and cash-flow forecasts. These will be critical if you need to negotiate a production or service contract vital to starting your business.

In this instance, quite logically – suppliers would love their customers ordering more over time. So, they will want to know details on your current financial situation and growth prospects. If you can show immense growth potential, you are more likely to negotiate a better set of terms with the suppliers.

It’s important to remember that strategic allies will approach you for a specific reason; complementary customer bases, distribution, technology, etc. So, while you prepare a plan to present to a possible ally, make sure to emphasise the appropriate aspect of your enterprise. Also, it would be quite smart to present your business plan in stages, when you’re showing it to a strategic partner and ally (showing where you are and where you could go).

Remember, a strategic ally can also become a potential competitor. So, you don’t want to provide them with sensitive details like marketing strategies or delicate financials until you’ve established trust. This sort of trust must not be built on a purely personal basis, but also protected based on a confidentiality agreement.

It may be that instead of starting your business you are instead have already built a successful business and are looking to sell it. In this case you’ll be writing a business plan for potential buyers.

In this case, you need to demonstrate how the business is a good match for them, how profitable it is and what prospective growth there is. Don’t forget to show that your business can run smoothly without you: if prospective buyers think your company can only succeed under your direction, they will not want to buy it off you.

Whilst I’ve covered the main recipients of a business plan, this list is not exhaustive. Business plans can be created for many other audiences and reasons. Whoever it’s for, consider the main issues from their point of view and always keep this in mind when you write.

Now that you understand the different possible audiences for your plan, it’s time to move onto the contents/structure of the plan itself. As you might imagine, every business has plenty of specifics that exclude the possibility of a universal business plan template. However, the core structure of any business plan is relatively similar for most businesses (titles may vary), most business plans include an:

• Executive summary – outline your business, its objectives and your proposal
• Business background – explain what your business does and how it works, how you reached your current stage in development and provide important information on your industry
• Products or services – relevant information on the product or service you offer
• Market breakdown – analyse the market your business operates in, how it is structured, your competitive edge, barriers to entry, using research on your industry and competitors
• Marketing strategy – How you plan to build awareness, market and sell your product or service
• Business operations – describe all day-to-day operations, how the business runs, map out the end-to-end production to sales line
• Management – provide a snapshot of the key players in your company and define the roles of major employees
• The proposal – this is the crux of the plan! Tell your reader exactly what you need and when and what’s in it for them
• Financial information and risks – break down your finances, including trading to date, sales projections, a balance sheet and cash flow projections, as well as a section evaluating risk
• Legal information – any legal disclaimers, contracts or permits need to come here, as well as an overview of the regulations which govern your trade

This list is the core of what you need to provide in a standard business plan. However, you may well need to add full sections for aspects that hold particular relevance to your business. For example;

• if your business revolves around a heavily regulated product such as alcohol, you should consider an extended section dedicated to compliance, necessary licences etc.
• Similarly, for technology-based businesses it is worth including a more detailed section on the technical facets of your product/business.
• If you are trying to break into an existing and longstanding market, you might need to have a section dedicated to how you are different. Your advantage might be down to your unique operation methods or your approach to management.

Whatever it is, make sure have a space to explain where your innovation comes from if it is significant to your success.

Finally, as per the previous section the exact contents will also be adjusted per the recipient. Before you start, try and map out a logical plan, section by section. Write the main aspects as key headings and lay them out in a sensical order as if you are telling a story. This will ensure a logical flow and will also save you considerable editing time at the end of the project – it’s far easier to slide sections in or move them around if the structure is logical to begin with. Now to the writing of each key component of your business plan starting with the executive summary.

In essence, the executive summary is a condensed version of your whole plan to give a busy reader all the vital information they need at first glance. It must cover all the key issues for your audience with necessary supporting evidence. It needs to be persuasive and convincing. Sustaining the interest of the audience whilst also giving them enough information to grasp the main concepts is no mean feat. We already know that your plan is probably one of many your reader has to consider.

Therefore, how good the executive summary is will likely determine how much attention your reader will pay the rest of your proposal – or indeed whether they read it at all. It needs to be concise, catch your reader’s interest, hit all the main points and sell your idea, all in one. The basic elements to include in your executive summary are snapshots of:

• the business
• the proposal
• The problem your business solves
• why it will succeed
• key financials
• what the rewards will be
• any major risks and how you plan to manage them
• what you want from the reader
• contact details

To make sure you cover all key issues, it’s advisable to write the executive summary last. Only when you’ve finished your plan will you be able to pick out the most important and convincing aspects. Write the body of the plan and try to read it over from the perspective of a potential reader. What sets you apart from competition? Which supporting evidence is most compelling? This ought to feature in the summary.

Ask and you shall receive

Crucially, your summary needs to include what you want from your reader. Get to the point: sell your idea but be sure to lay your cards on the table. Weak summaries often omit this information. Mystery will not work to sustain the reader’s interest in a business plan – investors don’t want to waste their time, so be upfront! Sound familiar? So, it should! The structure of the summary should resemble that of the whole plan.

Optimal length for an executive summary

The optimal length for a summary is one page. This allows a busy reader to get all the key information at first glance. It may seem a tall order, but any longer can lose your reader’s valuable attention. To achieve this one-page goal, write down the essential points as concisely as you can. Avoid descriptive language: remember, anything your reader wants further explained, they can find later in the plan.

However, whilst adjectives are redundant here, figures are not! You need some essential statistics to back up what you say. Find the most relevant numbers in your plan and include them to support your essential points. That said, do round them up – you can delve into precise figures later on. Here, your evidence is used for impact: an easily digestible number will leave a more lasting impression on your reader.

Logical structure and flow

It can be helpful to structure the summary in three parts. You need to guide your reader through the story without losing their interest. Firstly, how did you get to this point? Mention the research you carried out, where the idea came from, how you spotted a gap in the market. The middle part sets out your business idea and stresses what makes it special. The final part reveals what you need to take the business forward; investment, for example. This part should also acknowledge risks and tell readers how you will limit these, as well as highlight the rewards.

Remember to finish on a high. Don’t conclude with a line on the many risks of your business. If you want to include risk in your summary, frame it in a positive light, such as explaining how you plan for risks, or how they are counterbalanced by significant returns. End on something positive and powerful: how quickly your investor will make back their investment, for example, or how large your business will grow.

When you’re writing the executive summary, remember that some people will only read this synopsis. That’s why you should include any defining or game-changing details here. Has your business been given a prestigious grant? Things like this are worth mentioning even in the executive summary. Next you need to take a deep dive into your businesses’ background.

This is where you introduce your business and your market to your reader in more detail. Give them a broad idea of the who, what, where, when and why in your business. Almost everything in your business background section will be touched on in greater detail in the subsequent sections, so this section simply lays down the fundamental premise of your business and the main things to know.

Your business background should include the following:

• Industry overview – (briefly) set the scene for introducing your business
• Business overview – what does your business do and what are its aims?
• Business model – what mechanisms does your business use to operate? Essentially, how does it function?
• Company history – how was it established? Who founded it, when, where and why? Was there a Eureka moment?
• Mission statement – the essence of your idea
• Structure and Ownership – How is your company structured, who owns what?

Industry overview

Remember that your investor may not be familiar with your industry, so start by providing an industry overview. For all the subsequent detail in the plan to have any meaning, you need to set the scene and provide a context. Consider this section to be the foundations to your plan – any builder will tell you that a solid foundation is fundamental to constructing a sound structure. Build a solid understanding and avoid misconceptions by outlining the industry in simple terms, being sure to explain any industry-specific terminology.

A good test for this section is to ask a friend with no experience in your field to read this part through. When they’re done, get them to explain back to you what they understood. Did they get it right? If not, what did they get wrong? These bits need clarification.

Business overview

With the scene set, you can now explain what your business is and how it fits into this industry. As the word ‘overview’ suggests, this part should remain relatively brief, as the purpose of the plan as a whole is to form a clear picture. Provide an overarching outline but let the remainder of the plan fill in the detail.

Business model

A business model is quite simply how your business works at a macro level, for example; the business model of an eCommerce fashion company might be, we source fashion items on trend from America and resell them through our eCommerce store in the United Kingdom.

Beyond the Marco in this sub section you should take a deep dive into how your business functions and plans to function as well as the key mechanisms your business model relies on.

Company history

How did you get to this point? What have you done so far? Tell your reader how the business idea was conceived and how it came to fruition. This section holds particular relevance for potential investors, as they will want to know what you have achieved to date. If you are a start-up, focus this section on where the idea came from and why you’ve decided to pursue it.

Mission statement

This should be no more than a few lines that succinctly capture your business vision. Extract the essence of your business, its goals and its underlying philosophies.

Structure & ownership

Here you should define what the legal and ownership structure of your business is. Are you a Sole Trader, Limited Partnership or Limited Company? The ownership structure is a crucial piece of data that you need to include here. Who owns specific percentages of your company? Any investors and banks will require such information laid out.

What is the product or service you are trading? Bring your reader up to speed with what your business is offering and enlighten them on product-specific issues. Explain what is unique to your product or brand. Do you own a patent or have other copyright protection ? You also need to expose the practical issues of your product. Where and how is it made and by whom? Touch on issues concerning supply and distribution (you can go into detail later).

Every business needs a good pricing strategy. This can vary from short-term offers or a loyalty pricing system for long-term customers. Perhaps your pricing strategy involves undercutting competitors for certain services, or changing your prices depending on the country you are trading in. Explain your pricing strategy clearly to your reader as this is crucial in competing with big players in the market and in sustaining commercial success.

If you view your business plan as a blueprint for turning a business idea into a commercially viable enterprise, think of the market breakdown section as the evidence that supports your claim of having found an exploitable market niche. Do as much research as possible into every aspect of the business. The more precise you can be about the potential opportunity, the more credible your business plan will be.

It is all very well having a smart business model and a great product, but if you don’t know your market there’s no evidence that your project can succeed.

This section is critical. First off, you want your reader to gain an insight into the market you hope to enter. An understanding of the market coupled with sound and thorough research is key to convince investors of just how your business will succeed in its playing field. Make sure you get across the most important aspects of the market you’re in – how have these aspects informed your product?

Use this section to iron out common misconceptions of the market which could dissuade somebody from investing. Highlight the gaps in the market and show how your business exploits them. Build confidence in the product by showing how it stands out in its field. Questions to be covered in this section include:

• Industry analysis: what is the structure of the market? Who are the key players? What trends are observable?
• Target customer: who do you sell to, why do they buy and specifically, why do they buy from you?
• Competitor analysis: who are your competitors and how do they compete?
• Your competitive edge

This in-depth market analysis will not only support your pitch but become the backbone of your sales and marketing plan.

Industry analysis and market structure

Industry analysis is all about presenting relevant statistics regarding the size of your industry (like total UK sales for the previous fiscal year), as well as its growth outlook and history in the past couple of years. Is your industry growing, shrinking, or stagnating? And why?

Paint a picture of how the market operates. Does one supplier dominate the market? Are you a unique supplier or are there others like you? It might be that one big online seller monopolises 60% of the market and the rest is made up of thousands of small independent sellers who sell from small shop premises.

The market structure is important to make clear as your reader will want to know how you fit into this structure. Will you follow a proven pattern of success or will your business shake up the present market structure? How big is the market and what share do you expect to have? As with any information you provide in your business plan, consider how what you’re saying affects your business.

Your reader will always be looking for the relevance of what you say and the knock-on effect for your project. For example, if you say that the market is dominated by three large-scale competitors, you will need to later explain how you as an entrant intend to compete with companies of this size.

Market trends

What trends can be observed in your market? What are the changing factors in the market and how will these fluctuations affect your business, for better or worse? Trends measure how certain factors increase or decrease, or simply change.

Important examples to include are trends in market size, trends in prices and trends in technology. If your product is aimed at a shrinking market, this will generate problems which your reader will want addressed, such as the scope for growth. Investors tend to like growing markets because it is easier to expand sales. However, growing markets attract more competitors which will have a knock-on effect on pricing. Address issues raised by changing trends and what this means for you.

If there are significant alterations in technology, the target market, or any related industries – you should provide insights. Sourcing all this information will require carrying out detailed market research.

To gather said research you can use publicly available information on your competitors, industry databases, publications, and trade association data to find the information you need (depending on your sector, government databases may hold the required information). For a business plan, you’ll find that it’s completely acceptable to use information that’s been published industry-wide.

Can you determine if there are enough customers in your given market who would be willing to spend money on the service or product you plan to offer? And what kind of price would you have to charge them to make a profit? You should answer such questions in this section while conducting a systematic analysis of the market your business wants to reach. You need to demonstrate a working knowledge of who your customers will be.

Who is your product aimed at? Describe your target consumer. How do you know what they want? What research have you conducted? Provide a customer profile: you need to tell your reader exactly who your customer is and why they will purchase your product or service, include supporting evidence.

Bear in mind that your target customer is not always the same as your consumer. Your customers could be supermarket chains who buy your stock, making your consumer the supermarket shopper. In this example, appealing to the consumer is dependent on maintaining your customers, so you’ll need to tell your reader how you appeal to both.

If you plan on being consumer-oriented, do you have any demographic data that would identify a cohort of your target buyers? Also, do you possess any relevant lifestyle information on the target buyers? If you plan on selling to various types of consumers, you will need to provide separate descriptions of the defining characteristics of all groups.

Market segmentation

Markets can be divided into segments based on different characteristics. Each segment is composed of consumers who share traits such as needs or interests and who will therefore respond similarly to specific marketing strategies. Variables include consumer age, location, gender, nationality.

If your business trades in a specific market segment, you may not be up against the same competition as in other segments of the market. Enlighten your reader on what part of the market you operate in, who the customers are in this segment, and what this means in terms of your marketing strategy, which will be addressed in more detail later on. This also affects your interaction with competition, which we’ll come on to next.

Competitors

This part is important, and yet often neglected. The reason for this omission may be the fear that mentioning competitors will put off potential investors. Quite the opposite! Competition has a significant impact on all businesses.

You need to provide a thorough competitor analysis using relevant data to demonstrate that you know your competitors well and can foresee threats. Reassure your audience that you are aware of how your competitors pressure your share of the market and prove to them that you can accommodate for this.

A competitor analysis can be done in several different ways. One common and rather simple technique is to provide a competitor array , which is essentially a table which displays the main competitors in your industry, determines key success factors for competing in this industry and then ranks the competitors by each success factor. This contributes to an overall rating of each competitor to see who your biggest threats are and in what areas.

A more comprehensive method of analysing the competition is competitor profiling . This provides an in-depth analysis of your competitors’:

• Background – location of offices, size of company, ownership details, company history
• Financials – including their profitability, sales forecasts if you can find them, their profit growth profile
• Products – the products they offer, patents and licenses they own, product development
• Marketing – their distribution methods, market shares, client base, customer loyalty, pricing strategy and other marketing strategies

Having in-depth knowledge on your rivals and how they operate is a huge advantage. Try and find as much data as you can on your competitors. This is a good exercise for any company, irrespective of producing a business plan.

Existing competitors Vs new entrants

Competition is twofold. The most obvious competition comes from existing companies: who competes in the market at present? Who’s winning? Provide analysis of your main competitors; their size, how they operate, their strengths, the threats they pose to you, their weaknesses and, finally, what all this means for your business and what you intend to do to have the upper hand. Whilst it is relatively easy to assess the risks of existing competitors, new entrants present more of a threat. You know less about them and they are harder to predict. New entrants affect two sorts of industry in particular: mature industries, where the only space for new competition tends to come from overseas corporations, and technological industries: our continually evolving technology is especially susceptible to new competition.

An example of this on a broad scale was the introduction of online shopping: suddenly huge online players such as Amazon were competing in a multitude of markets. This technological advancement threw off a tremendous amount of smaller businesses who simply could not compete with the advantages and economies afforded to such a giant corporation. Is this something that could affect your business? Could new technologies develop that will threaten your competitive advantage?

Competitive edge

Once you’ve profiled your competition, you’ll have established exactly what your competitors offer and how they attract customers. Now it’s time to show what sets you apart. This is a crucial element to the plan, and most likely reveals your biggest selling point. Anything that differentiates you from the competition or makes you a winner needs to be communicated. Your competitive edge can be anything from lower prices to better technology to innovative operation methods. When boasting your competitive edge, be sure to discuss the limitations of this advantage. Does this edge have a time limit? For example, does the patent on your innovative mechanism expire? Once other companies cotton on to your advantage, is it something they can copy, and do they have the resources to do this better than you? Flaunt your best qualities but don’t be arrogant: admit the limitations of your USP and how you can ensure these constraints won’t adversely affect your business further down the line. For example, perhaps exceptional customer service will generate customer loyalty, allowing you to maintain your hold on the market even after you lose copyright protection on your innovation. Perhaps you are confident you will be able to gain a new competitive edge by the time your current one expires. Sell yourself to your reader and convince them that your advantage is sustainable.

Barriers to entry

A barrier to entry is any factor which makes it difficult for a new entrant to break into a given industry. Such barriers benefit existing businesses by protecting them against new competition.

Common barriers include high start-up costs or restrictions on locality, license restrictions etc. If you are protected against any typical barriers for entry, bankers and investors will want to know as it offers them greater security.

Marketing Strategy

So, you’ve profiled your customers and profiled your competitors. Now you need to demonstrate how you are going to reach your target customers. If it’s your product that provides the competitive edge, how will your customers hear about it? Address what sorts of marketing methods and channels you will be implementing. Detail how your advertising will be split across different media channels, what ad campaigns you intend to launch and the timing of these relevant to your trade – on the run up to a product launch, for example. Provide information on how much time, money and resources you’ll expend on marketing, too.

In the marketing strategy part of your business plan, you should present your planned approach to marketing your services and products to your customers. This portion of the plan is here to provide a high-level view of the steps you’ll take to generate awareness of your brand and get your target audience to purchase your products or services. In other words, an interested party reading your marketing strategy should get a big-picture look at your marketing objectives and how your business will market itself to the end-user. The marketing strategy should assess both the risks and merits of your enterprise.

Marketing plan

Your marketing plan takes your marketing strategy mentioned above and develops it on a tactical level. It details how you will, in practice, reach the target consumer base with your product or service. For example, here you would describe the specific kinds of advertising you plan on using, as well as the ad timing. You’re providing the ground-level steps required to bring your marketing strategy to fruition, and the timetable for such measures to be taken.

In a practical example, would you spend more time, energy, and resources on online advertisements or traditional marketing channels? Do some of the latter, like radio, still have a sizable reach for your target audience? And what specific media outlets would you use; when would the ads run, and how much would they cost? Also, importantly enough – how do you plan on assessing if you extracted enough worth from the advertisement investment?

While you need to answer these questions, bear in mind that the marketing and sales plan traditionally included a calendar that ties in your sales and marketing activities with a specific series of operational events. For example, you should detail your schedule for an ad campaign a month before launch day, if your business plan revolves around a new product.

Also, the sales channels you plan on using are quite important as well. While there are many different ways for a product or service to reach your customers in practice; you should provide details on the specific channels that you deem as most effective in this instance, and why.

The marketing/commercial part of your business plan is here to address how you intend to make people aware of and induce to purchase your service or product; in volumes that will render your enterprise commercially viable. This section will generally include and strategic and tactical plan on how to achieve the above, in practice this means:

Marketing strategy – Which will provide a detailed description of how you differ from your competitors and what approach you’ll take to reach customers better than they do;

Marketing and sales plans – That will specify the timing and nature of your advertising and promotional activities in support of particular sales targets.

How does your company function? From attracting customers to delivery of the finished product or service, what internal processes take place? Explain how businesses in your industry typically work, and then how your business assimilates to and differs from this model. Your competitive edge may lie in the day to day practices of your firm. Perhaps your prices are not competitive, but your uniquely fast production line mean that your delivery time is far shorter than competitors’.

Focus on how your business does things differently to give them an advantage. How do you save on production costs, delivery time, administration costs? How does this improve trading conditions or customer service?

There will be many different processes at play in your company. Highlight each process involved and how it works and most importantly, why you choose to do it the way you do. To have faith in your business model, your investor needs to understand it.

Some common processes you should touch on include:

• The buying process
• Supplier selection
• Price negotiation
• Stock control; how much you have, how you monitor it (also if you have appropriate stock insurance in place)
• Product promotion; including promotional campaigns
• Store management: how many outlets or factories you have, managing staff, providing training
• Internal procedures and systems

Stage of development

Production process, location and facilities.

Below you’ll find more detailed advice on the operational components above.

A big part of operations concerns supply. Supply issues include questions such as where you will buy your product from, how secure this supply is, what influences the purchase price and the knock-on effect on your selling price.

Say your business is a zeitgeisty avocado café. The security of your supply might fluctuate depending on whether avocados are in season. This might mean you have several suppliers during off-season to supplement demand, or it may mean you pay more during this period for the same amount of stock. Perhaps your café is only open in certain months of the year. How do you compensate for this in the business? Does this mean you put your café prices up seasonally or do you compensate across the year?

In this section your reader will want to know what the main inputs are and whether there are a limited number of suppliers. Highlight any constraints this may have on your ability to get supplies when you want and what this means for price. If you have contracts with any suppliers, refer to them here and attach a copy in your appendix.

Operational control

How do you control these processes? Who is reviewing them and how, to ensure the operations are as cost-effective and efficient as they can be? This section is essential to build the confidence of investors. You may have a solid business plan, but your investor needs to know that if things go wrong, you have systems in place and the skills to handle it. This is where the control comes in: people getting involved in your business want to know when and how you will catch mistakes, and how they will be dealt with to minimise a negative financial impact.

Finally, how did you decide on these processes? Perhaps you have worked in the industry for a long time and are familiar with the way it works. If you are a start-up, consider that your investor may be wondering how you know that your operation strategy will work: and how you came up with it in the first place. Maybe you studied competitor companies. Share this with your reader.

Operational control also ties in with regulation. Your operations section ought to contain details of your permission to trade. This may include planning consent, liquor licenses, health and safety compliance etc. If a key part of your business depends on adherence to regulation, this is the place to reassure your reader that your internal processes comply with official requirements, and moreover that this is something which is continually monitored. This will apply to anything with a health and safety aspect: from trading with chemicals and food to renting machinery, regulation can play a key role in many businesses. If investors are not convinced that your processes toe the party-line, they are unlikely to invest. Failure to comply can result in fines or even suspension from production, which can have a drastic impact on turnover. Demonstrate you are aware of all the rules that apply to your business and show your reader how you monitor adherence. Legal compliance will be addressed in greater detail in the legal section.

As the modern world continues to advance, we are becoming more and more reliant on technology. The same goes for business. The length of this section will vary based on your industry, but any business will rely on some computer systems. A better system often means more efficient processing and reduced costs. But with any dependency comes risk. System failure can result in huge losses and, in some cases, even bankruptcy. Reassure your audience that you not only understand your system, but you understand the risks involved, and how you can prevent or foresee system failure before it happens.

In other words, an in-depth explanation of what you’ve done up until now to establish and maintain the operational integrity of your business, followed by a description of what else has to be done.

Within this part of the business plan, you should include a detailed, step-by-step production workflow for a specific service or product. Try to identify any critical problems you predict possibly occurring. This will provide the informational bedrock of the later section in which you’ll describe the known risks associated with your business, as well as possible interferences. If your production process entails the handling of hazardous materials, though – this is something you want to mention even now.

You also need to demonstrate that your business is fully aware of the global, national, regional, and local standards relevant to (i.e. ISO 9000). That means detailing any industry association memberships/product certifications that you plan to attain, as well as those you already have. If you need to take any significant steps to ensure compliance with industry standards, provide details on how you will achieve that.

You should also provide a detailed insight into your suppliers, their terms, conditions, and prices. If any suppliers do not prove to be adequate, describe the alternative arrangements you’re prepared to make (contingency planning is a critical component of any business plan, often overlooked). Then describe the quality control process for your service or product. If you want your company to pursue any quality control certification, describe how you intend to accomplish that.

Make a list of all the resources you need to make your plan work, including premises, office space, equipment, raw materials and labour. You should describe where precisely you plan to conduct business. Will you need a building for a manufacturing plant? Or a storefront of some kind? Do you already possess the required space?

If the latter is the case, then you’ll need to explain the circumstances in which you use the space – in other words, whether you lease or own it. Also, if there is a lease on the property, you will want to describe its terms here. Make your long-term plans for any operational space quite clear, and describe what spatial needs you will need in the future.

Here you want to demonstrate your deep understanding of the delivery and production process for services or products and what key factors affect said production.

Firstly, provide a general outline of your day-to-day operations; like working days and hours. If your business is a seasonal one, that’s crucial information to mention. Here, you should also detail your business premises, and include details of lease agreements if need be. If the buildings or land your business owns or leases are essential to the proposed business plan, you should demonstrate their worth.

The above is true for any equipment. Describe the cost and worth of any equipment you need, as well as asset financing arrangements if any. Provide a list of all of your business assets; including vehicles, furniture, inventory, buildings, and land. Their worth and legal descriptions should accompany each asset.

Your business might require special permits, such as zoning approvals; or other special requirements like power and water needs, drainage, ventilation, etc. Such details need to be a part of your operating plan. Additionally, if your service or product requires any materials, name them, and detail the terms you’ve managed to negotiate with relevant suppliers.

Speaking of production – if your company is product-oriented, you should disclose the time/cost you currently need to produce a single unit, as well as improvements you can make to this process and the factors that have a significant effect on it. Think of how you will deal with exceptional circumstances like rush orders, and detail how you intend to keep track of inventory.

If you have performed any feasibility studies, price testing, product testing, or prototype testing; disclose the details here. And most importantly, provide cost estimates for all of the above.

Management is arguably the make or break of a company. Sell yourself! Tell your reader about you and your team. Who are you? What experience or skills do you have that are relevant to your project? How is your team organised? Give an overview of the key players in your management team and how responsibility is divided.

When describing your management team, impress your reader by highlighting each person’s experience, qualifications, achievements and the strengths they bring to their proposed role. You want clearly defined job roles, but you also need some crossover. The team needs to be self-sufficient enough to cope with absences and unplanned interruptions . If your Operations Executive catches the flu, can your business still function?

You want to create a good impression of your employees for your financier to trust you. Attach their CVs in the appendix to allow your investor a further nose. Provide solid references, too – venture capitalists will always follow up references before investing.

Show the organisational structure of your personnel. It may be helpful to include a diagram for this. Indicate how many personnel will be employed in each area and under the guidance of which member of management. Is this manageable? Is anybody overstretched? Be sure to dedicate a lot of time to this section. Your staff are vital cogs in your business machine.

Once your business is set into motion, many things can change. A year down the line you may be running on a very different model to the one you proposed in your plan. Markets can change quickly, operation methods are always evolving. The only constant is you and your team, which is why this must be the most convincing part of your proposal. A sound idea cannot be carried off on its own: your idea may be flawless, but financiers need to back you as a team to part with their cash.

Start with your core team

Begin with your managerial portfolio, highlighting your personal experience and skills. Then, complement this with the qualities of other team members; outlining any specific deficiencies and strengths in your current lineup. And if you don’t have a full team in place as you start working on your business plan, don’t worry.

You can use this part to provide an outline of the current organisational structure, with job descriptions and plans on recruiting additional key team members. In this case, you should also describe their future responsibilities. And be careful as you define your employees’ responsibilities, as this could make or break your company’s growth in terms of human resources.

Human resources plan

Start by providing a brief look at your HR strategy. Many investors may be wondering how you will handle your payroll, as well as the accompanying administrative costs. But apart from the brass tacks, in this day and age, they’ll also be interested in the kind of corporate culture you want to foster.

Naturally, you must provide more than the bird’s eye view. For example, you need to include details like the payscale for managerial positions, as well as other employees in your company. And if you want to stay competitive in the labour market, you will probably want to define the details on vacation time and business insurance right away.

Speaking of which, your health insurance policy is something most employees will be interested in, so state this in terms that are as clear as possible. Plus, with skyrocketing insurance prices, your investors may also want to know about the financial side of this benefit. The same goes for similar benefits: like your bonus structure, bereavement leave, small business pension schemes, life insurance, etc.

If you’re still early in the stages of getting your business up and running, defining such benefits and their expenses may seem overwhelming. However, if you’re faced with a competitive labour market, you will want to attract as many qualified professionals as you’re able to.

You’ve now laid the groundworks its time to introduce your full proposal. This is your sales pitch.

It’s time to make clear:

• What you intend to do and how, where and when you intend to do it
• Why it will succeed
• What you need from your reader
• What they can expect in return (if your raising investment)

What do you intend to do?

The proposal should be clear and concise. State exactly what you propose to do and the objectives of your project. These objectives should be measurable: what exactly do you want to achieve? Facts and figures can help here: perhaps you want to occupy 35% of the French market, or you want to have opened 100 stores across the UK within five years. Make sure your objectives are achievable. An ambitious proposition is not a problem if you can back it up, but financiers will be able to spot an unrealistic claim from a mile off and will not trust you if they think you’re unrealistic in your goals.

Why will you succeed?

Again, keep it plain and simple. Highlight what sets you apart from the competition. Underline how and why you will make money. You will have addressed many of these factors already in your plan.

What do you want?

Then, crucially for your reader, move on to what you want from them and what they can expect in return. The most common purpose of a business plan is to ask for something, usually financial backing. Perhaps you’re after a business partner or are seeking a merge. Be clear on what you want but avoid being too specific in the finer details.

If you need a certain amount as minimum, be sure to include this, but do not lay out exact terms. This too often incites a yes or no response, rather than discussion and negotiation. Negotiation can even lead to better deals than you expected, so don’t be too quick to lay out explicit terms. Ask for what you need and leave the financiers to consider their conditions.

Here is also a good place to put in how much you have invested yourself. This can assist in convincing potential investors of your dedication to the project. This investment doesn’t have to be financial – consistent investment of your time and effort, perhaps with little or no salary, is also testament to your belief in the idea and commitment to the project.

The exit (for investors)

So now your reader knows what you want from them. The next thing they will ask is, why would I invest? Now is time to convince them of why this is good idea for them. Provide a clear exit strategy.

If you’re pitching to investors, convince them of the financial return they can expect. If you’re asking for permissions, what is it you’re offering in return? Try and put yourself in the shoes of your reader and ask yourself if what you’re proposing is an attractive offer.

Give them a rough timeline, too. They’ll be far more likely to invest if they know when they are to start profiting from your business. For most investors, they will be looking for an exit in three to five years’ time.

If you plan on developing your business enough to be acquired by an industry giant or working towards an IPO some time down the line – make sure the investors know about it. That way, they’ll be able to form an estimate of when they stand to profit from your business and how much. At the end of the day, you also need to provide your potential investors with a defined exit strategy. If they know the details of how they can profit from your business idea, including at least a rough timetable; they’ll be far more likely to invest.

Finances and forecasts

You’ve set the scene, asked for what you want and convinced your reader of what’s in it for them. It’s now time to get down to the business nitty-gritty: finance. Essential financial information you need to provide includes:

• A profit and loss statement
• A balance sheet
• A cash flow projection
• A breakeven projection

Forecasts are tricky to get right. Overestimate and you risk losing your credibility for being unrealistic. Underestimate and your offer will lose its appeal. Use as much research as you can to support your forecasts. If you are just starting up or are yet to secure any venture capital, your forecasts can be particularly difficult to predict. Bankers will demand hard numbers. Remember, for most readers of a business plan, finance is their area of expertise. This is the part of the plan that needs the most thorough research.

Making any financial projections for a young company is always a double-edged sword. On the one hand, you need to do so to attract any serious investors. But on the other, such predictions are as much a form of art as they are a science. If you’re still in the process of raising seed money, predicting what your performance will be like a couple of years down the line is not easy. And yet, investors demand cold, hard numbers and facts. Don’t underestimate the amount of money you will need.

Profit and loss statement

Put simply, profit and loss (P&L) is your income less your expenses over a year period. This is concerned with your trading product or service: your income is the amount you receive for selling your goods and your expenses are the cost of your raw materials and the costs of converting those raw materials into finished goods, including labour costs for example. They can also include any overhead costs such as administration or general expenses associated with the trade. Your income less your expenses will provide you with a net profit or loss.

A forecast profit and loss statement shows the reader how profitable your business model is and how much you can expect to earn over a future period. In producing this statement, you will need a detailed breakdown of your predicted sales, a sales forecast, alongside a detailed breakdown of expenses you expect to incur. You should include these documents in the appendix of your plan.

Cash flow statement

Whilst the P&L reflects a business’ profitability and can sometimes be subjective due to accounting treatments, the cash flow statement reflects the actual movement of cash. For example, if you invested in capital items such as a new factory or machinery, the full amount would appear on your cash flow statement, whereas on a profit and loss statement it would appear incrementally over the expected life of the asset. As such, you can appear profitable on a P&L account, but you could actually be short in cash if your customers never pay within their period of credit.

The most important thing for your business to continue to trade is your healthy cash flow. Without enough cash you cannot pay your suppliers or staff and trade will grind to a halt. Essentially, your cash flow statement needs to prove that your cash inflows at least equal your cash outflows so that you always have the funds to operate.

To recap, your P&L shows your profitability but not necessarily how cash rich you are at any one time. Poor cash flow management resulting in improper timings of cash in and cash out is why profitable businesses can still go bust. Ideally, you will prepare a cash flow forecast on a monthly basis.

Balance sheet

The balance sheet shows the assets, liabilities and equity of a business to determine the net worth of the business at a given date. Assets refer to anything of financial value owned by the company. These can be physical assets such as property or stock as well as less tangible assets such as outstanding invoices that your business is owed.

Conversely, liabilities refer to anything of financial value which your business owes to others. These can be short term liabilities, such as having not yet paid your suppliers or a bank overdraft. They can also be longer term borrowings, such as a loan from a bank or other financial institution. Equity includes any capital funds injected by shareholders and reflects the growth of the company year on year Equity is the difference between total assets and total liabilities.

A profitable business should see their equity increase as their earnings increase. Businesses typically produce a balance sheet once every year.

Break-even projection

If it turns out that you’ve done a proper job in projecting expenses and sales, you should be ready to produce a rough estimate of when your business will break even. In other words, when your enterprise becomes profitable and earns more money than it spends.

For startup companies, this is generally not something that’s expected to happen right away. But investors will rarely want to put their money down solely on the merits of your idea alone. Instead, they will want to see a rough date at which they can count on seeing returns on their investment. Make sure that you can support such a prediction with previously-established numbers in your business plan.

When it comes to risk analysis, it’s important to realise something – any innovative idea will be filled with enough risk factors to fill ten business plans. Avoiding the mentioning of risk is not the point, as any rational investor or partner expects a plan that isn’t entirely risk-free.

With any business venture comes risk. It is far more reassuring for an investor or partner to know that you are planning for these risks to minimise their potential impact, rather than to pretend that your business is risk-free. This is also an excellent opportunity to dispel your investor’s concerns and pre-empt questions. A transparent risk analysis will prove you are capable of handling unpredictable circumstances and make you a safer investment.

Every business faces a huge amount of risk, certainly a lot more than you can touch on in your plan. Focus on the main ones and make sure you’ve considered risk from varying sources. In reality, most projects don’t succeed for a set of reasons that could reasonably be predicted well enough in advance; not coming up with a proper risk analysis means not dealing with potential problems before they arise. But since entrepreneurs have an optimistic outlook by nature, many of them always brush off the possibilities of doom and gloom and assume they’ll deal with the issues if and when they come. In actuality, though, you can avoid most dire situations with proper upfront risk planning.

And having such a risk analysis in your plan will show all investors that you’ve gone through all the possible risks and that you’re capable of planning for the most probable ones. In turn, that means they can count on your plan surviving when it comes into contact with the unpredictable.

Naturally, you don’t need to address every kind of risk out there, as you work on the risk assessment part of your business plan. Generally, there are five significant categories of risk, and we’ll explain each one here. We have gone more in-depth on the main categories of business risk below.

Economic/market risk

Markets are sensitive to the economy and fluctuate a great deal depending on environmental and social factors. In other words, your sales can dramatically reduce or increase depending on external factors beyond your control. The economy can also affect your costs and the prices of your raw materials. A good way to mitigate economic risk is to carefully watch the economy and observe market trends to predict significant dips in the economy, giving you time to plan ahead.

Put simply, the economy has the power to dash sales completely. To maintain a steady cash flow, your business needs a reservoir of cash for economy-induced sales droughts. Demonstrate in your plan how you intend to save enough money to keep you afloat during a potential recession.

Compliance risk

Even the most straightforward businesses are subject to some form of regulation or legislation. Data protection laws, for example, have opened many businesses up to liability concerning the mishandling of customer data. Non-compliance can result in serious penalties, from monetary fines to trading suspensions and material loss, all of which equate to compliance risk. Such risk most often arises when a company is ignorant to laws which affect them.

A way to tackle this is to keep on top of governmental guidelines and consistently review internal processes. In industries which are heavily subjected to legislation, such as wineries, businesses should consider creating specific job roles to monitor compliance. All businesses however should ensure that their staff have the relevant training to adhere to the most up-to-date regulation.

Financial risk

A risk for any business is bankruptcy. Mismanagement of money or exhaustion of funds pose serious financial risk which can run a project into the ground. To lessen this risk, aim to keep company debts to a minimum and diversify your sources of income. Relying on one or two clients can devastate your enterprise if a client chooses to cease trading with you.

Competitive risk

This is the risk that the actions of your competitors will prevent you achieving your targets. Competitors may develop a product with a competitive edge which wins over your share of the market. This is difficult to plan for and presents an accentuated problem for technological companies. Constant development in this field makes it difficult to sustain a competitive edge and retain customers. Ways to mitigate this risk are to keep a constant eye on the developments of your competitors and to focus on customer retention strategies.

Another factor to consider under this form of risk is the possibility of your competitors getting hold of confidential information which could expose or undermine your competitive edge. In certain industries where trade secrets are an invaluable asset, particularly in the financial sector, you may have to factor in gardening leave for senior employees who wish to terminate their contracts.

Gardening leave refers to a period of time in which employees are paid but are excluded from business and are also prevented from commencing employment in other companies. This binds the employee to their duty of confidentiality and keeps them out of action in the market for long enough that any confidential information they had is no longer in date.

This protects the company by preventing the exchange of current trade secrets to competitors. Of course, gardening leave is a costly move, but it could be worth it if the confidentiality of current information is intrinsic to the success of your business.

Reputation risk

Just as competitors pose a risk in winning over your customers, a damaged reputation can actively push customers away. Product failure, customer service lapses or negative press can seriously damage a brand’s reputation. Social media has amplified this risk: one bad review published on Twitter can incur a huge drop in revenue.

To counteract this risk, focus on prevention. Reliable quality control checks are essential to prevent product faults. Moreover, your business needs to know what is being said about it online and offline to gauge public opinion so you can react to perceived issues. Ensure you deliver immaculate customer service and enable customers to easily give feedback and report problems. This will minimise defamation on social media. That said, businesses need an active social media presence to quickly and effectively deal with online complaints in the public domain. Devise mitigation controls as well as solutions to show your reader that you are equipped to deal with reputation risk.

Operational risk

Operational risk refers to any factor outside your control which has a serious impact on business operations, and thus trade and revenue. These can be:

• Physical risks such as a warehouse fire or theft which result in repair or replacement costs. They may even incur legal costs if the business is found to be in some way liable.
• Technical issues may result in website failure which can lose you significant online sales. You might lose a main supplier which has the potential to grind production to a halt.
• People can also contribute to operational risk: staff can make mistakes which can cost the company time and money.
• If your company works on a revolutionary 3-D modelling technique, the risk of losing one of the few individuals in the world that are equipped to develop it is genuine.

Address these issues as best you can by showing that you have contracts in place that cover you for such losses, or that you have alternative suppliers and backup machinery. Demonstrate that you can cope with these potential operational problems to prevent serious losses in revenue.

With all forms of risk, do not be afraid to admit that running into these problems will incur costs, even in spite of a timely and effective reaction. Your investor will be aware that their rate of return reflects some risk taking. The old saying high risk high reward certainly holds true. This section is about proving to your investor that you can handle the most probable risks, in order to justify the risks you do take to reap higher rewards.

Product risk

This is something that biotech companies struggle with the most on a regular basis. Perhaps obviously, this is the risk that the product you’re working on isn’t practically viable, and thus impossible to create.

The above-mentioned cutting-edge biotech companies have this problem, as in most cases they cannot be confident that they’ll be able to complete the drug they’re looking to produce.

Investor risk

Investors don’t want to see a business plan with no risks – that seems like bad judgement. Instead, they’re looking for business plans that are by people who are prepared to respond to possible risks.

That’s why you want to showcase your risk management and response policies to the best of your abilities. By showing your investors that you’ve thought about such things in advance, you can boost their confidence about your ideas succeeding even if something doesn’t go according to plan.

Different businesses can be subject to differing legislation. A plethora of laws exist which affect businesses, and on top of this, a huge number concern trade of specific products or materials. In 2017, a survey was published revealing that two thirds of UK businesses were breaking basic health and safety laws. At best, companies facing legal action will receive an (often significant) fine. At worst, business owners could face a prison sentence. Legal action of any kind has repercussions for anybody involved. Potential investors want to be sure that all your business proceedings operate strictly within legal guidelines.

The government publishes regular legal advice for budding businesses and entrepreneurs which you can consult online. It is also an idea to join a trade association to help understand your responsibilities and legal requirements as a business owner. If in any doubt, consider employing the help of a consultant to do the legwork for you. This is not an area worth economising on.

In this section it is important to demonstrate your awareness of laws affecting your business as well as proof of compliance. Explanations of anything which is legally binding, such as contracts, copyrights, patents, trademarks or any other intellectual property, should be included in this section, with the relevant documents attached in the appendix.

Confidentiality

More often than not, a business plan is produced with a target audience in mind. Venture capitalists, angel investors, potential business partners. Sending somebody a business plan reveals all the inner workings of your existing or future project and without a confidentiality agreement, there’s nothing to stop your readers from passing on or reproducing your ideas.

A Non-Disclosure Agreement (NDA) is a document which stipulates that the reader, otherwise known as the Recipient Party, may not disclose any of the contents of your plan to anybody outside of the agreement. Ensuring recipients sign this agreement before you hand over the plan will legally protect you against theft or use of your idea, preventing somebody else from appropriating your business dream. As the Disclosing Party, you will also have to sign the agreement to pledge that you too shall not disclose any of the reader’s information, or indeed anything you discuss with them in relation to the project. Each party must provide a provision for damages as part of an NDA, which states what the breaching party would be liable for in the event of a confidentiality breach. This is typically monetary damage.

In addition, in some cases it is sensible to include a preamble which protects you against future legal action based on the contents of your plan. Should the venture not go as planned after investment, investors could use something you said in the plan as a basis to sue you for misrepresentation. This preamble is essentially a disclaimer that not everything in the plan is of guaranteed accuracy and states that the plan serves as a memorandum, rather than a prospectus, and is thus not to be used as part of any contract.

Supporting evidence is critical to back up your claims and overall plan. But what kind of evidence do you need, and where can you find it? Data and statistics are most convincing when it comes to supporting evidence, for example figures on sales in your given industry, data on market trends. Some sources of data include:

• Government statistics
• Market research reports
• Universities
• Trade associations
• Brochures or material from competitors
• Customer research in the form of surveys, focus group findings, field studies

Government supported figures are the most reliable place to start and are naturally most compelling based on their lack of bias. Many specialist public libraries or university libraries are a good place to look for relevant industrial data; many store market research reports, and many will grant access free of charge to non-students by request.

Outside of the library, university departments are also often open to receiving requests for data or reports. These departments can usually point you to relevant published papers or will sometimes even offer their own views which you can quote. Trade associations are also a good place to look and are also institutions that may provide you with legitimate quotes. Be mindful however that many potential investors will thoroughly research your claims: do not quote anything that isn’t true, as it possible they will verify your sourcing with the person or institution you have cited.

Sometimes, published data from competitors can serve as useful evidence. Care needs to be taken as this cannot always be reliable and will not always be persuasive, particularly if you aim to distinguish yourself from such competitors. It is certainly worth a look however, to see what sources they quote in their own material.

Try a variety of sources. The better researched your project, the more convincing. Look in physical libraries as well as online libraries and browse the internet. Websites such as LinkedIn are also great platforms for contacting people in your industry – it is well worth connecting with and messaging relevant players in your field. If they can’t help you, there is a good chance that they can point you to somebody who can.

Even if you cannot find data specific to your point or product, data can be manipulated to support your point. That’s not to say that the data is false or that you should lie. It does mean however that you can interpret data it in a way which supports your part of your claim, to give your case more credibility.

Now you know how to put together a business plan, it’s time to make it sleek! Presentation and style are important. Whilst the final verdict will come down to content, you won’t get that far if you hand your investor a scrappy document. If your plan appears polished, your reader will instantly be more confident of its contents. A poor layout and messy structure will suggest that the plan has not been thought through.

Active voice

For a convincing and powerful plan, write in the active voice rather than the passive. Instead of ‘ the business will have’ , use ‘ we will have ’. The active is more engaging and centres around who is doing what and when, but most importantly, it sounds more confident. Have conviction in your idea. In this vein, avoid timid assertions such as ‘ we hope to ’ or ‘ we want to ’ and replace them with the future tense: if you can convince your audience of what you will achieve, given the right resources, you will more be more likely to procure investment. Linguistically speaking, avoid using lots of hyperbolic language. In business, flowery language is redundant: your evidence will always be more persuasive than your language.

Evidence, evidence, evidence…

As mentioned it’s very important to provide evidence! Back up what you say with facts. If you want an investor, you need to be able to convince them of what they are reading. Include facts and statistics to support what you say as much as possible. Don’t just tell your reader how they will benefit from involvement in your idea; show them with supporting evidence.

This is particularly important when starting out. Where do your estimations and predictions come from? Do you have evidence from similar ventures that can testify to the potential success of your own? If you want someone to part with their cash, they need to be convinced of the returns. You need to prove to your investor that you are worth their money and time. Whilst you should endeavour to support all claims you make, a good rule of thumb is if you’re saying something more than once, back it up. Never repeat your claims without providing hard facts or you only solidify doubts. We have provided advice for gathering supporting data below.

Repetition is sometimes necessary, and there is no doubt that certain sections will provide very similar information. Furthermore, restating the main points in a condensed format can be helpful in tying together your most important points. That said, direct repetition should be avoided: it will only bore your reader and weaken your credibility.

Be the author

Write the plan yourself! The business plan is essential for your own understanding of your company, as much as anyone else’s. More often than not, you are going to have to pitch your plan to potential investors.

It’s therefore essential to be familiar with all parts of the plan, and this familiarity will come best if you put it together yourself. Writing it yourself allows you to hone its contents, spot any holes in the plan and ensure that it’s written in a logical way.

Review, review, review. Read your plan over and over once it is complete. Then, find an external reviewer. This can be anybody, but it is important that they are not involved in the idea. Even better, somebody who is not familiar with your industry at all. This will check that your plan has clarity.

Ask for constructive feedback, particularly with how readable the document is and whether it flows well for an outsider. See if they have any concerns on your approach or tone. And finally, be sure to ask somebody honest – you want to impress, after all!

A critical tool for business success

As we have seen, business plans are a critical tool for businesses of any kind. A good plan inspires enthusiasm for a project as well as convincing its audience that the idea is robust, whether that’s its own employees, potential business partners, angel investors or bankers. Whatever the reason for its production, this will be a document that you refer back to constantly during the setting up, running and developing of your firm. Your business plan will never be set in stone – many aspects of a business will change or evolve over the course of its development. A business plan is a work in progress which requires constant adaptation and reworking. Keep it up to date at all stages of your business development and you will thank yourself later.

Many entrepreneurs don’t even consider just how big of a job writing a proper business plan is. However, they are also rarely aware of the fact that this document will usually be their most important contact with the outside world; at least while the company in question is still in its infancy. Beyond that business plans are a critical document key to driving a business forward, as one final convincer on how important/critical a business plan is take a look at the case study below as an example and goodluck writing!

Business plan case study

Linda Marie Kerr opened her Funsters Fun Factory, an indoor adventure playground for children, in 2003 after dreaming about the idea for many years. She wrote a six-page business plan and used it to get a £70,000 loan from Natwest, which together with the £80,000 borrowed from her husband gave her the £150,000 she needed to start the business in Hendy, South Wales.

Writing the business plan was hard work, but worth it, she said. “I thought that writing it was going to be a long, arduous task – and it was. It took from March to September to get all the information. I found the projections really hard. It was hard to forecast for something I hadn’t even started; I didn’t want to be over-confident, but I didn’t want to undersell myself either. One week I thought, ‘This is ridiculous’, and screwed up the plan and threw it in the bin.”

But Kerr persisted and eventually put together a business plan explaining what her venture was and her aims for it. “Now the plan has become my bible,” she said. “It has given me monthly targets that I would probably not have thought about.”

Related topics

Related posts.

While all of the reasons for writing a business plan are usually described as external, such as landing investors or...

While there is no universal format for business plans; there are specific rules that anyone writing a business plan should...

To put it in the simplest possible terms - a business plan is a document, which details the purpose and...

Copyright © 2013 – 2024 Entrepreneur Handbook Ltd. All rights reserved. Registered offices at 20-22 Wenlock Road, London, N1 7GU, UK.

• Human resources
• Start a business

Information

• Advertise with us
• Privacy policy
• Terms of use

Copyright © 2013 - 2024 Entrepreneur Handbook Ltd. All rights reserved. Registered offices at 20-22 Wenlock Road, London, N1 7GU, United Kingdom.

• Jump to Accessibility
• Jump to Content
• Online Banking
• RBSIF FacFlow
• Resume lending

Business planning tips

On this page

Failing to plan is...well, you know the rest

To build a successful business, having a clear mission and specific goals is vital. The best way to do this is to write a thorough business plan setting out exactly how you're going to turn your dreams into reality.

Do's and don'ts when writing a plan

Do be realistic.

While it's important to show ambition, be realistic when projecting your results.

Do check for accuracy

It may be an old cliche, but you only get one chance to make a first impression. Make sure you triple check the accuracy of your content and ask a colleague or mentor to proof read it with a fresh pair of eyes.

Do your research

Make sure all research is up to date and accurate, and that any claims can be substantiated. You need to be aware of the good, the bad and the ugly!

Don't include your CV

Your business plan is about the company you intend to run, not ones you may have run in the past. A link to a completed LinkedIn profile will tell someone all they need to know about you.

Don't say you have no competition

There's always competition, the key is understanding your market and convincing your customers that your product is superior.

Don't start at the start

Start with an executive summary. This should be one page long and is your elevator pitch on paper.

6 steps to writing a business plan

Our in-depth six-step guide can help you put together a robust business plan and set you up for success or expansion.

Introduction

A business plan is a written description of your company, your aspirations and ambitions, and the methods by which you can achieve your goals.

Creating a business plan gives you a clearer understanding of what you need to do to reach your objectives. By producing a detailed business plan containing facts, figures, statistics and a summary of your skills, you will give potential investors all the information they need to buy in to your proposal.

Getting started

Once you've decided to write a business plan, the next step is deciding what needs to be included. And remember, your plan should be flexible.

An executive summary exists to summarise your ambitions and approach in a concise way. This is not always an easy task, but it's a good way to ensure you remain focussed on both the bigger picture and your core ambitions.

Your business summary should

• Describe your business - how you want it to grow, the niche you fill, why you think it can succeed
• Describe the sector it sits in - if the sector is strong, where will you fit? If it's performing poorly how will you buck the trend?

Product summary

It's worth giving your product or service a section of its own. Outline what makes it different from similar offerings and discuss the reasons that you will succeed.

Aims, objectives and audience

You should cover:

• Where do you want your idea to go and how are you going to get there?
• In a year's time what shape will your business be in?
• Will you have secured investment, or hired additional members of staff?
• Will you be able to cope if you fail to hit projected financial targets?

It's vital that all of these factors are assessed prior to launching or expanding a business. Research carried out by the Chartered Management Institute (CMI) has discovered that over half (54%) of all UK businesses that fail within the first three years of operation do so because of poor management.

Get to know your audience

You must have an understanding of your core demographic and how you are going to engage them. The more intelligence potential investors can get from reading the plan, the better.

Operations and organisation

It's good to have a solid concept, strong product and ambitious goals, but to grow a successful company, you will also need a detailed understanding of job roles, company structure and the day-to-day running of your operation.

This section of the plan is often the most detailed. Overlooking just one of the below areas could be extremely harmful when it comes to launching a company or seeking investment.

Areas to cover

• Location - where will you be based and why?
• Suppliers - who are they and what are the contract terms?
• Production - will anything be outsourced?
• Distribution - how will you deliver your product?
• Employees - how many do you need and what will they do?

Financial considerations

All aspects of your business plan are essential in their own right, but it's important to make sure the financial elements are accurate and in order.

Some entrepreneurs make the mistake of believing that because they are determined to succeed, they will be able to fund business growth by reinvesting the business' profits. However this rarely works, suppliers need to be paid prior to the customer getting their hands on the goods, meaning you will need some kind of initial investment or loan to cover supply costs.

• What kind of financing you need
• How much money you require
• Whether you are willing to give away equity in the business in return for funding
• When you will be able to pay back any loan you take out

How much, what for, and from where?

Always consider these three questions when planning your finances, and always be cautious in your answers.

Measuring success and risk

No business is guaranteed to succeed. Investors understand that handing any amount of money over to a startup is a risky decision, but it's important to reassure them. Highlight that you are aware of the risks, have plans in place to avoid pitfalls, and are willing to change course or adopt different methods should you need to.

Types of business risk

• Compliance  - If you fall foul of laws and regulations, your business could fail before it has a chance to properly grow.
• Operational  - Operational risk can come in many forms. It could relate to employee error or a water leak that damages equipment.
• Financial  - Nearly all businesses will get into debt in their opening years, but it is how that debt is managed that is important.
• Reputational  - Building customer confidence in your brand and rewarding them with a quality service is an essential ingredient for all businesses. 

Need a little more help?

You can find additional information and a range of business plan templates and examples on the www.gov.uk website.

Get your business idea off the ground

From the start, you’ll need to think about your approach to running your business and what support you might need to make it happen.

Something else we can help you with?

Support centre, @natwestbusiness.

Branch locator

• Small Business
• Credit Cards
• Personal Finance
• Business Loans
• Business Bank Accounts
• Free Business Bank Accounts
• Business Insurance
• Business Energy
• Business Water
• Accounting software
• How Do Business Loans Work?
• How To Get A Business Loan
• Do I Need A Business Bank Account?
• How To Open A Business Bank Account
• Do I Need Business Insurance?
• Types Of Business Insurance
• How To Switch Business Energy Supplier
• How To Start A Business
• What is an SME?
• How To Go Self-Employed
• How To Grow Your Business

Whether you’re an established business or start-up, see the latest offers from leading business bank account providers

• Personal Loans
• Secured Loans
• Bad Credit Loans
• Guarantor Loans
• Car Finance
• Unsecured Vs Secured Loans
• How to Get a Loan
• Why Can’t I Get A Loan?
• What Are Joint Loans?
• What Is A Bank Loan?
• Am I Eligible For A Personal Loan?
• What You Need To Know About APR
• Paying Off A Loan Early
• Loans For People On Benefits

Compare loans and check your eligibility from a range of leading loan providers

• Best Mortgage Lenders
• Mortgage Rates
• Commercial Mortgages
• Mortgage Calculator
• Stamp Duty Calculator
• Mortgage Eligibility
• What Is Stamp Duty?
• Fixed Vs Variable Rate Mortgages
• What Is A Buy-To-Let Mortgage?
• What Is A Joint Mortgage?
• How Remortgaging Works
• How To Pay Off Your Mortgage Early
• How Long Does A Mortgage Offer Last?
• What Is A Shared Ownership Mortgage?
• What Is A Guarantor Mortgage?
• UK House Prices
• How To Open A Bank Account
• Student Bank Accounts
• How Overdrafts Work
• Can I Open A Bank Account For My Child?
• Regular Savings Accounts
• What Is A Personal Pension?
• ISA Or Savings Account?
• How To Choose A Credit Card
• Do I Need A Credit Card?
• Credit Card Charges And Fees
• Debit Vs Credit Cards
• Breakdown Cover
• Car Insurance
• Home Insurance
• Travel Insurance
• Life Insurance
• Do I Need Breakdown Cover?
• Do I Need Life Insurance?
• Types Of Life Insurance
• What Is Home Emergency Cover?
• How To Maintain Your Vehicle
• Benefits Of Life Insurance
• Can You Have Multiple Life Insurance Policies?
• What Does Car Warranty Cover?

How to Write a Business Plan in 8 Simple Steps

Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here .

8 step business plan checklist

Why should i write a business plan, how to write a traditional business plan, how to write a lean start up business plan, tips for writing a business plan, get your small business off to a great start.

A business plan is a written document that describes your business, usually covering strategies, objectives, marketing, sales and financial forecasts. More than that, it can be a way to provide a clear roadmap designed to take your business from where it is today to where you want it to be in the future.

But if you haven’t created one before, it can be hard to know where to start. That is why we have put together a guide on how to write a business plan, including the elements you might want to include, and the different small business plan formats you may want to consider.

Compare Business Loans

Compare loans for businesses of every size and industry, from top UK lenders, including:

When writing a business plan, there are several factors to pay particular attention to.

• Have you included an executive summary detailing your mission statement?
• Are you clear on both your competitive advantages AND the key risks facing your business?
• Do you have a detailed organisational chart showing the structure of your business personnel?
• Are you on top of trends in your industry, and how your business can stand out?
• Have you explained how you will attract and retain your customer base?
• Are you explicit about how your product or service will benefit its intended audience?
• Do you know how much funding you need, and in what form?
• Have you included your latest financial projections?

This list is not necessarily exhaustive, but highlights some key things to pay attention to as you create your business plan.

There are a range of reasons why you might consider writing a business plan, from clarifying your intentions to securing a business loan.

Clarify your business idea

By writing a business plan you can hone and sharpen your initial business idea, making it a stronger, more detailed proposition.

It will give you a top level overview of what you need to do and, importantly, how much money you need to do it.

Set out your goals

Going through the process of creating a business plan will help you set out tangible goals for different stages of your growth.

Where you want to be after year one will differ from what you want to have achieved by year five, and writing a plan will encourage you to engage with your targets on both a short- and long-term basis.

Spot potential problems

A business plan isn’t only about sharpening your idea and setting your goals. If done properly, it can help you spot potential problems that you may not have previously considered, or that were not obvious until you’d done the research a business plan requires.

Measure your progress

A business plan is only the beginning. Once it is in place, you will have a set of targets to measure your progress against.

These targets can act as points of reference to evaluate the various stages of your organisation’s development.

Securing funding

A business plan will be essential if you’re looking to secure a business loan or other form of credit from a bank. Potential investors will also want to see one before they consider partnering with you.

It can also help convince suppliers, customers and employees to support you in your endeavour.

A traditional business plan is comprehensive and detail-oriented. For these reasons, it is the format most commonly requested by lenders and investors.

Let’s go through the sections you would expect to see in a traditional business plan – but remember, you don’t need to stick to an exact outline. Instead, use the sections that make the most sense to your business and its needs.

Step 1: Draft your executive summary

Outline briefly what your company is and why it will be a success. Include your mission statement, your product or service and basic information about your location, workforce and leadership team. And if you’re seeking funding, lay out your high-level growth plan and financial information.

Step 2: Write your company description

In this section, you can elaborate on the points laid out in your executive summary. Explain the problems your product or service solves, and list the specific organisations, businesses and consumers your company intends to serve.

Furthermore, lay out the competitive advantages that will help your business prosper. Perhaps you have industry experts on your team or have sourced the perfect location for your store.

There is no need to hold back on your company’s strengths.

Don’t be afraid to mention key risks to the business. Any lender or investor will likely identify them for themselves and will be reassured by the fact that you have identified them and have plans in place to protect the business.

Step 3: Detail your management and organisation structure

Who will be running your business? How will it be structured legally? Will it be a limited company, limited liability partnership, or partnership, or will you work as a sole trader ?

An organisational chart may help illustrate who will be in charge of what, and take the opportunity to describe how their credentials will contribute to your venture’s prosperity. You may even wish to include the CVs of key players.

Step 4: Carry out and explain your market analysis

You’ll need a solid understanding of both your target market and your industry outlook. Competitive research will shed light on trends and themes, as well as what other businesses are doing well, and how you could do it better.

Step 5: Define your marketing and sales strategy

There is no single way to approach your marketing strategy because it should evolve and adapt to your business’s individual needs as they arise. The goal in this section is to lay out how you will attract, and retain, a customer base. You’ll also need to describe how sales will actually happen.

You’ll likely need to refer to this section of your business plan later when you lay out your financial projections, so make sure your marketing and sales strategies are described in thorough detail.

» MORE: How to promote your small business online

Step 6: Describe your service or product line

Describe what you’re selling or what service you’re offering, as well as how it will benefit customers and what its life cycle will look like. If you have plans for intellectual property, such as patent filings or copyright, make sure that you share them. And if you’re conducting research and development for your product or service, explain it in detail.

Step 7: Detail your funding request

If you’re looking for funding as part of your small business plan, you’ll need to outline your requirements, preferably with a five-year projection and your future strategic financial plans, such as selling the business or paying off debt.

You’ll need to specify whether you require equity or debt, the terms you wish to be applied and the length of time your request will cover. Describe what your funds will go towards, such as paying salaries, purchasing materials and equipment or covering bills, until such time as revenue increases.

Step 8: Compile your financial projections

It’s a good idea to supplement your funding request with financial projections in order to convince readers that your business will be stable and successful.

If your business is already established, then include balance sheets, income statements and cash flow statements, preferably from at least the last three years, if not the last five. Be sure to list any other collateral you could secure against when applying for a business loan.

Provide a prospective financial outlook for the next five years, including forecast income statements, capital expenditure budgets and cash flow statements. For the first year, be even more specific, and break it down to quarterly, or even monthly, projections. Explain these clearly, and ensure they match your funding requests.

Your appendix can be filled with supporting documents and any other materials that have been specially requested. Items commonly added to the appendix include:

• product pictures
• credit histories
• letters of reference
• legal documents

This less traditional business plan format has a solely high-level focus. It is quick to write and contains only key elements. For these reasons, you may prefer a lean start-up business plan if you wish to explain or start your business in a short timeframe, or if your business is relatively simple.

It may also be a good format to use if you envisage regular change for your business or your business plan being regularly redefined.

These kinds of business plans are most applicable where you are building a business based on a new concept or product and people can understand that it is impossible to project exactly how it will develop at a more granular level of detail. However, many lenders will not consider such a high- level plan sufficient for the approval of a loan.

A lean start-up business plan is a useful summary of your infrastructure, value proposition, finances and customer base. As with the traditional business plan, it has commonly used elements, but they are not essential; you should mould your plan to your business’s particular needs.

Value proposition

You need to make a concise and compelling statement regarding the unique value that your company will deliver to customers, including the products and services you’ll be offering.will bring to the market.

Key partnerships

Make note of the other companies you’ll work alongside in bringing your business to fruition, be they suppliers, manufacturers, sub-contractors or other strategic partners.

Key activities

List the main ways your business will gain a competitive advantage in the market, from customer relations to revenue streams. highlighting It will highlight such factors as selling direct to consumers or leveraging tech to tap into the sharing economy.

Key resources

List any resource you’ll use to maximum advantage in creating value for your customers. Your key assets may include capital, staff and intellectual property.

Customer segments

Specify your target market and remember: your business won’t be for everyone. Who are your most important customers? Enter into your small business plan with a clear sense of who you will actually serve.

Customer relationships

Lay out how your customer base will interact with your business. Will it be automated, face -to -face or online? How will you grow your customer base and retain customers? Consider the customer experience from start to finish. Explain how you will find customers and retain them.

Cost structure

Will your company focus more on maximising value or reducing cost? Define your strategy, then list the key resources and most significant costs you’ll face.

Marketing and communication channels

How do you intend to talk to and communicate with your customers? How do your competitors communicate with their customers? And what are the most cost-efficient ways to do this? Most businesses make the most of a combination of marketing channels and optimise them over time.

Revenue streams

How will your company make money? What are your customers willing to pay for the value you’ll add? Will it be through direct sales, advertising space or membership fees? If you envisage multiple revenue streams, be sure to list them all.

» MORE: How to create a small business budget

When writing your business plan, it is worth keeping the following tips in mind to ensure you get the most out of the process.

• Have a clear goal: since there are many reasons why you might be writing a business plan, it is best to know exactly what you hope to get out of it before starting, as it will inform how you go about creating your document. For example, your aim may be to get funding or to convince potential hires to join.
• Know your audience: just as there are different reasons why you might write a business plan, there are different audiences who will be reading it. By keeping a target audience in mind from the beginning, you can tailor your plan towards the right people.
• Do your research: this cannot be overstated. The more research you do, the more detailed your plan can be, creating a stronger foundation for your business to launch from.
• Keep things concise and consistent: while it is important to do your research, you don’t want to swamp your reader in unnecessary detail. Make sure your plan is to the point and consistent in tone throughout.
• Check your spelling and grammar: it sounds basic, but poor grammar and spelling may undermine your business plan in the eyes of potential investors and partners. So make sure to give it a thorough read through – you may even want to consider hiring an editor or proofreader to review your plan.

A well-written small business plan can be critical in helping secure funding and bring on new business partners. Remember, investors need to feel confident that they will see returns. Your business plan is the perfect tool to convince people to work with you, so put in the time, research and effort that your business deserves.

Not only will a plan help you be taken more seriously if you’re starting a business with little funding, but it will also help you understand every element of your business, better preparing you for the market.

Image source: Getty Images

About the Authors

Nic Redfern is Finance Director at NerdWallet and an accomplished business and finance strategist with over 26 years' experience. Nic has been instrumental in the growth of several regional and…

Connor is a lead writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and…

Dive even deeper

How To Start a Candle Business

Are you a candle lover who waxes lyrical about starting your own business? Our guide will answer all the burning questions you need to consider before getting your candle business off the ground.

What is a VAT Loan?

The quarterly obligation of paying VAT returns to HMRC can be challenging for VAT-registered businesses for several reasons. VAT loans are a source of financing companies can use to avoid incurring late payment penalties by missing deadlines.

Top 6 Crowdfunding Sites UK

Raising money through crowdfunding could help you to start a business, launch a new project or expand the business to the next level. But determining the best crowdfunding platform for your business is a step that can turn crowdfunding failure into success.