How to write a business plan
If you’ve ever considered starting a new business, or growing an existing one, chances are you’ve been advised to write a business plan. If you’re looking for funding from investors, a detailed and persuasive business plan is an absolute must. But even if you’re the only person who ever reads it, writing a business plan is a great way to keep yourself organised and stay mindful of your goals.
What is a business plan?
A good business plan offers a comprehensive but easily digestible overview of a business. It should cover everything from who works there to what you sell to who your market is to your long-term financial goals. Pulling it together may require significant time and effort, but it’s worth prioritisng this task as soon as possible. Starting a business involves a lot of steps, and it can quickly become overwhelming without a solid written plan to refer to.
Your business plan doesn’t just describe your business and its goals, it walks readers through how those goals will be achieved. You’ll detail your marketing, pricing, business model, and logistics.
It’s also perfectly OK to revise your business plan as new developments arise. Though business plans can help you stay focused on top priorities, they aren’t set in stone.
Why write a business plan?
Having a business plan makes tracking your progress far easier. It lays out the steps you need to take and helps you evaluate where you are with where you’re aiming to be.
In addition to the organisational benefits, writing a business plan is essential if you want to meet with investors. When you’re applying for a loan from a bank, for example, they’ll want to see a business plan before deciding whether or not you’re a sound investment.
Generally speaking, anytime you’re expecting financial support from someone, whether it’s an investor, supplier, or customer, having a business plan to hand will be extremely useful.
How to write a business plan
Your business plan, as a reflection and summary of your business, will be unique. That said, most business plans have several basic sections in common.
The first piece of any business plan is your executive summary. Think of it as being like the hook of a newspaper article – it’s where you describe your business in a way that draws your audience in and makes them curious enough to keep reading or listening.
Executive summaries are an overview of everything about your business, which means even though they’re the first thing your reader sees, you’ll write one after you’ve finalised the rest of your business plan.
Writing your executive summary is one of the most important and challenging parts of creating a business plan. It needs to be concise and to the point, but also positive, specific to your audience, and unique.
To make it easier, there’s a 6-paragraph plan you can follow to make sure all the important points are there.
Here’s where you tell the story of your business. Why does it exist? Who are you? What problem are you solving?
It’s best if you break the structure of this section down question by question. It might look something like this:
History: Who you are, how long you’ve been around, and what made you want to start your business.
The problem you’re solving: What you’re addressing, where you see a need for what you’re offering, why people would want it.
The solution: What your business offers, how what you’re offering addresses the need you’ve identified, and how you’re different from other businesses offering similar things.
Your business structure: Who owns and works at your business, what the hierarchy is like, and what your legal business structure is.
You talked a little about your audience in the ‘business overview’ section of your business plan. Now it’s time to expand on that. Use the information you gathered doing market research to describe your customer base.
Things to clarify in this section include:
Who your customers are. What can you say about your market? Which demographics are you targeting? How did you find them and how will you reach out to them? Where does your demographic already shop?
Current trends. What’s going on in the market that makes your business viable? Is the market changing? If so, why?
Your competition. How many competitors exist? Who do they target? What are your strengths and weaknesses in comparison? How will you attract their existing customers?
It’s a good idea to do a SWOT analysis when you’re assessing the market. SWOT stands for ‘strengths, weaknesses, opportunities, and threats’.
Now that your audience knows who you are, what you’ll do, and who your market is, it’s time to get into how it all works. What’s the plan for getting your name out there? What does a day in the life of your business look like?
This section of your business plan will be split into a few parts. Your business strategy should include:
Your team. Who is employed in your business? Are you the only one? If not, what are the responsibilities of your team members? What are their backgrounds and what do they bring to the business?
Your marketing. Where are you advertising (which channels will you use) and how? What selling points are you emphasising when you advertise? Are you selling on the same channels you’re using for promotion?
Your operations. Where are you located/planning to be located? Are you starting a business from home? Will you be there long-term or do you plan to move if you expand? How will you keep accurate day-to-day records?
Finances and projections
This is vital to include so you can set clear goals and have metrics for measuring your success. It’s also instrumental in finding support from investors. Even so, remember that writing a business plan is, first and foremost, a tool for yourself. Keep the numbers realistic and as empirically verifiable as possible.
Figures and diagrams to include here are:
Sales forecasts. How much product do you expect to be selling? How much will you charge and how much does it cost to stock your goods? What’s your overall profit expectation?
A cash flow statement. Cash flow is the amount of money you generate and spend over a specific time period. You may monitor your cash flow from week to week, month to month, or year to year.
Your balance sheet. This summarises all your finances at a specific point in time. It’s the compilation of your assets, liabilities, and the net difference between the two.
Financial projections and the things you’ll need to measure vary with the size of your business. It’s a good idea to talk to an accountant if you’re not sure what to include.
You can write a business plan yourself pretty easily now that you know which essentials to include. There are also templates available to help you structure your business plan.
Business plan templates
A major advantage of using a business plan template is that all the categories are defined for you. There are a wealth of templates out there, so you should be able to find one well suited to your business.
You’ll find plenty of free business plan templates online. Depending on your needs, you can use:
A startup business plan. If you’d characterise your business as a startup, this is a good fit for you. There are variations geared towards specific industries as well, so whether you’re in tech, gastronomy, or consulting, you’ll find useful information.
A one-page business plan. If you want to keep it short and to the point, see if you can limit yourself to a single page. Being concise may be the best way to sell people on your business.
A growth business plan. This type of template can help you describe your business in a way that’s more likely to catch the attention of investors.
These are just a few of the most common business plan templates. If you’re not quite sure which is best for you, you’ll find plenty of simple business plan advice on the UK government’s official website,
Now that you know what a business plan is and includes, and have an understanding of how to write one, you’re a step closer to taking your business to the next level. And thanks to the variety of business plan templates out there, you can easily tailor one to your specific field.
Having an organised business plan makes big tasks seem smaller and takes a lot of the guesswork out of business ownership.
Found this article useful? For more advice and inspiration, continue exploring the SumUp Business Guide.Learn more