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how to write a business plan uk

  • 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.

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Free Simple Business Plan Template

Helena Young

Our experts

Written and reviewed by:.

Our independent reviews are funded in part by affiliate commissions, at no extra cost to our readers.

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.

monday.com-logo

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.

monday.com business plan template

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.

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.

Cover Page

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':

Example of an executive summary in a business plan for a Birmingham restaurant called '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.

Example of a personal summary in a business plan for a Birmingham restaurant called 'The Plew'

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.”

Example of a business description in a business plan for a Birmingham restaurant called 'The Plew'

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:

Example of an product / service page in a business plan for a Birmingham restaurant called 'The Plew'

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' example: market analysis in a business plan

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' example: competitor analysis in a business plan

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:

Example of an cash forecast in a business plan for a Birmingham restaurant called 'The Plew'

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.

Example of a page showing staffing information in a business plan for a Birmingham restaurant called 'The Plew'

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.

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how to write a business plan uk

HELPING SMALL BUSINESSES SUCCEED

MORE DONUTS:

What do you need to know about starting a business?

  • Start up business ideas
  • Set up a business
  • Skills and wellbeing
  • Business planning
  • Financing a business
  • Tax and National Insurance
  • Business law
  • Sales and marketing
  • Business premises
  • Business IT
  • Grow your business
  • Types of business
  • Testing business ideas
  • Product development
  • Is running a business really for you?
  • Start up stories
  • Registering as a sole trader
  • Setting up a limited company
  • Business names
  • Buy a franchise
  • Buying a business
  • Starting an online business
  • Setting up a social enterprise
  • Small business support

Protect your wellbeing from the pressures of starting and running a business and develop key business skills.

  • Dealing with stress
  • Manage your time
  • Self-confidence
  • Write a business plan
  • Business strategy
  • Start up costs
  • Start up funding
  • Setting prices
  • How to work out tax and NI
  • Accounting and bookkeeping
  • Licences and registration
  • Protecting intellectual property
  • Insurance for business
  • Workplace health, safety and environmental rules
  • Looking after your customers
  • Promote your business
  • Your marketing strategy
  • Sales techniques
  • Research your market
  • Creating and optimising a website
  • Commercial premises
  • Premises security
  • People management
  • Recruitment, contracts, discipline and grievance
  • Employment rights
  • Hiring employees
  • Buying IT for your new business
  • Basic IT security
  • Preparing for business growth
  • How to scale up your business
  • Funding business growth
  • Start exporting
  • Personal development

Essential guide to writing a business plan

A group of people working on a business plan

Your business plan outlines what your business does and what you are trying to achieve. It explains what the market opportunity is, what makes your business special and how you will make it a success.

Writing a business plan helps you:

  • check that your business idea makes sense
  • plan your sales, marketing and business operations
  • identify potential problems and how to overcome them
  • set out your objectives and the financial return you expect
  • work out what financing you need
  • convince other people to back your business

Why write a business plan?

How to write a business plan

Your business and products

Your market and competition

Your marketing and sales

Management and personnel structure

Your business operations

Financial performance

SWOT analysis

1. Why write a business plan?

Writing a business plan helps you think about what you are doing.

  • The plan sets out your strategy and action plan for the next one to three years, or sometimes longer.
  • As part of the process, you set concrete objectives and plan how you will achieve them.
  • Writing a business plan helps you focus and develop your ideas. Priorities are identified. Non-priorities are dropped, saving precious time.
  • Putting the plan in writing makes it easier to spot any gaps where you have more work to do.
  • Once written, the plan is a benchmark for the performance of the business.
  • By involving your employees in the planning process, you can build a successful, committed team.

You may need a business plan to explain your idea to other people

  • A business plan is essential if you are raising finance from a bank or outside investors.
  • A good plan can help you attract new senior management, or business partners such as distributors and agents.
  • You should tailor your plan to the target audience. For example, you may want the plan to 'sell' the business to your bank manager or investors.
  • Ask the intended recipient if there are any specific issues they want the plan to address or a template you should follow.

2. How to write a business plan

Base your business plan on accurate, detailed information where possible. But do not include all the detail in the plan. Leave the detail for operational or marketing plans.

Keep the plan short

  • Focus on what the reader needs to know.
  • Cut out any waffle.
  • Make sure there are no spelling mistakes.
  • Detailed business plans are often quickly shelved because they are difficult to use on an ongoing basis.

Include any detailed information you need in an appendix

For example, you might want:

  • detailed financial forecasts and assumptions
  • market research data that backs up what you say
  • CVs of key personnel (essential if you are seeking outside funding)
  • product literature or technical specifications

Base your business plan on reality, or it may be counterproductive

  • Over-optimistic forecasts can lead to increased overheads followed by a cash flow crisis and drastic cost-cutting.
  • Be realistic, even if you are selling the business to a third party. Financiers, business partners and employees will see through over-optimistic plans that ignore weaknesses or threats. Management credibility can be damaged.

Make the plan professional

  • Put a cover on it.
  • Include a contents page, with page and section numbering.
  • Start with an executive summary. This summarises the key points, starting with the purpose of the business plan.
  • Use charts, if helpful.

Even if the plan is for internal use only, write it as if it were aimed at an outsider

  • Include company or product literature as an appendix.
  • Give details about the history and current status of the business.

Review your business plan

  • Read through the plan from your target reader's point of view. For example, try to imagine the impression the plan will make on your bank manager.
  • Check the plan is realistic. Include evidence to back up what you say (perhaps in the appendix) or provide evidence if needed.
  • Make sure you assess the risks. What might go wrong (eg if your main supplier closes down or you lose a key customer) and what would you do about it?
  • Concentrate on the executive summary. People often make provisional judgements based on this. Only then do they read the rest of the plan to confirm their decision.
  • Show the plan to friends, business peers and expert advisers for comments. Which parts did they not understand or find unconvincing?

3. Your business and products

Explain the history of the business.

  • When did it start trading and what progress has it made to date?
  • If the business is just starting up, what is your personal industry background and what progress towards launching the business has been made?
  • Who owned the business originally?
  • What is the current ownership structure?

Describe what your product or service is, avoiding technical jargon if possible

  • In general, what makes your product or service different ?
  • What benefits does it offer? What are its disadvantages and how will you address these?
  • What changes and improvements are you planning?

Explain any key features of the industry

  • For example, any special regulations, whether the industry is dominated by a few large companies or any major changes in technology.

4. Your market and competition

Describe the market in which you sell.

  • Highlight the segments of the market in which you compete. What are the key characteristics of customers in each segment and what influences their purchasing decisions?
  • How large is each market segment? What is your market share?
  • What are the important trends, such as market growth or changing tastes? Explain the reasons behind the trend.
  • What is the outlook for each important market segment?

Describe the nature and distribution of existing customers

  • Do they fit the profile of the chosen market segment? If not, why not?
  • Are sales largely made to one or two major customers?
  • If you are a new start-up, do you have any confirmed orders and who are your best prospects?

Outline the main competition

  • What are the competing products or services ? Who supplies them?
  • What are their advantages and disadvantages compared to you? For example, price, quality, distribution.
  • Why will customers buy your product or service instead? How will your competitors react to losing business and how you will respond?
  • Never openly criticise or underestimate competitors.

5. Your marketing and sales strategy

Where do you position your product or service in the market.

  • Is it high quality and high price?
  • Is it marketed as a specialist product due to a particular feature?
  • What unique benefits does it offer customers? For example, product reliability or customer service.
  • Which of these benefits are you going to highlight?

What is your pricing policy?

  • Explain how price-sensitive your customers are.
  • Look at each product or market segment in turn. Identify where you make your profits and where it may be possible to increase margins or sales or cut costs. Set your pricing accordingly.

How do you promote your product or service?

  • Each market segment will have one or two promotional methods that work best. For example, social media marketing, direct marketing, advertising or PR.
  • If you are considering a new marketing strategy, start small. A failed investment in marketing can be costly.

What sales channels do you use to reach your target customers?

  • For example, do you sell directly to the customer, or through retailers or agents? Do you sell online?
  • Compare your current channels with the alternatives. Note the distribution channels used by your competitors.
  • Look at the positive and negative trends in your chosen distribution channels.

How do you do your selling?

  • Look at the cost-efficiency of each of your sales methods . For example, online sales, in person, through an agent or using telesales.
  • Include all the hidden costs, such as management time when calculating prices or return on investment.
  • Explain how long it takes to make sales (and to get paid for them), what the average sales value is and how likely customers are to give repeat orders.

6. Management and personnel structure

Set out the structure and key skills and experience of the management team and the staff.

  • Clarify how you cover the key areas of production, sales, marketing, finance and administration.
  • Address any areas of deficiency, and your plans to cover this weakness.
  • Explain your recruitment and training plans, including timescales and costs.

Analyse the workforce in terms of total numbers and by department

  • Compare the efficiency ratios with competitors, or with similar industries. Useful figures might be sales, average salaries, employee retention rates and measures of productivity.

Be realistic about the commitment and motivation of the workforce

  • Show how committed you and other members of the management team are. For example, how much you have invested in the business.
  • Consider how you would survive the loss of a key member of the team.
  • Note any unusual upward pressure on pay levels.
  • Spell out any plans to improve or maintain motivation.

7. Your business operations

Look at the capacity and efficiency of your operations, and any planned improvements.

What premises does the business have?

  • Do your business premises meet your current and future needs? What are your long-term commitments to property?
  • What are the advantages and disadvantages of the present location? Should the business expand or move?

What production facilities do you have and how is production organised?

  • How modern is the equipment?
  • What is the capacity of the current facilities compared with existing and forecast demand?
  • Who are your key suppliers? How do you select and manage them?

What management information systems are in place?

  • For example, management accounts, sales, stock control and quality control.
  • Are they reliable? Can they deal with any proposed expansion?
  • A financier will be very concerned if management information systems are inadequate. Management of a business is always limited by the quality of the information available.

Are your IT systems reliable?

  • Is IT a key strength (or weakness) of your business? The development of IT systems to help your business is usually an important issue.

What quality or regulatory standards does the business conform to?

  • For example, ISO 9000 or CE approval.

8. Financial forecasts

Your financial forecasts translate what you have said about your business into numbers.

Set out historical financial information for the last three to five years, if available

  • Break total sales figures down into component parts. For example, sales of different types of product or to different groups of customers.
  • Show the gross margin for each sales component. List what costs are included as direct costs for each component.
  • Show the movement in the key working capital items of stock, trade debtors and creditors. Use ratios such as stock turnover (in months), debtors period (in days), and creditors period (in days).
  • Highlight any major capital expenditure made.
  • Provide an up-to-date balance sheet, and a profit and loss account .
  • Explain the reasons for movements in profitability, working capital and cash flow . Compare them with industry norms.

Provide forecasts for the next three (or even five) years

  • The sophistication of your forecasts should reflect the sophistication of your business. A small business may only need sales, profit and cash flow budgets .
  • A more complex, asset-based business - or one with complex working capital requirements - will need balance sheet forecasts as well.
  • Use the same format as for the historical information, to make comparison easier.
  • Clearly state the assumptions behind the forecasts. These should tie in with what you say in the rest of the plan. For example, if the plan says that the market is becoming more competitive, profit margins should probably be falling.
  • Be realistic about forecasts in new markets. For example, how much resource can you devote to selling, what success rate can you expect and how long will it take to convince new customers ?
  • Look at the overall trends of historical and forecast numbers. Are they believable? Do the forecasts allow for the possibility of problems and delays in payments that could affect cash flow?
  • Consider 'what-if' scenarios. For example, consider what will happen to your cash flow if sales are 20% lower than forecast (or 15% higher).

Put detailed financial forecasts in an appendix at the end

Include a detailed list of assumptions. For example:

  • the profit margin on each product
  • how long it takes to collect payment from debtors
  • what credit suppliers will offer you
  • what financing you are expecting and the interest rate you will pay

Use the cash flow forecast to predict any financing requirements

  • Add an extra contingency element onto the funding requirement shown in the forecast (perhaps 10-20%). Think about what mid-month peaks might be.
  • Identify what types of financing you want. For example, long-term loans or an increased overdraft facility.
  • Include the likely interest or dividend costs of any new finance.
  • Carry out sensitivity tests on the cash required by changing key factors, such as sales or margin. Note the outcomes.
  • Explain why the financing is required and what it will be used for.

If necessary, get help

  • Small business advisers at banks and business support organisations may help you put together financial forecasts free of charge.

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9. SWOT analysis

A SWOT analysis helps show that you really understand your business and the key external factors that you need to deal with.

Set out a one-page analysis of strengths, weaknesses, opportunities and threats

  • Strengths might include brand name, quality of product, or management experience.
  • Weaknesses might be lack of finance, or reliance on just a few customers.
  • Opportunities might be increasing demand or a competitor going bust.
  • Threats might be a downturn in the economy or a new competitor.

Be honest about your weaknesses and the threats you face

  • Spell out mitigating circumstances and the defensive actions you are taking.

Driving your business forward

Identify what makes you better than the competition.

  • Think about what the key ingredients of your future success will be and how you will strengthen your position in the market.

Establish your overall business aims

  • Where do you realistically intend to be in three years' time?

Decide on half a dozen key objectives that will make a significant difference

Many businesses think in terms of:

  • income - more sales, better margins
  • customers - new customers, higher levels of customer satisfaction
  • products - improving existing products, launching new ones
  • human resources - recruiting new employees, developing new skills

Set clear targets

  • You should know exactly what you want to achieve, by when.

Work out how you will reach these targets

  • Look at each aspect of your business in turn and create a step-by-step action plan for it.
  • Get help preparing a business plan and financial forecasts from your local enterprise agency .
  • Find an ICAEW chartered accountant or an ACCA accountancy firm for help with financial forecasting and business planning.
  • Find a trade association relevant to your sector through the Trade Association Forum.

Business partners work on their business plan

Browse topics: Business planning

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Writing a business plan

Your guide to a successful business plan

A good business plan defines what you want to achieve and how you intend to achieve it. Our guide could help you write yours.

Define your business

It’s important that you define what type of small business you are so that everyone you work with understands what you’re trying to achieve. A comprehensive business plan is the best way to go about defining your business.

Your plan should include:

  • What your business will do
  • The products or services it will provide
  • How customers will access your products or services (eg in a shop, online or by phone)
  • Your approach to pricing
  • Your long and short-term objectives – including a series of benchmarks if possible that you can check your progress against

Know your customers

Make sure you know as much as possible about who will be buying from you. For example, if you’re marketing to consumers, here are some questions you might want to ask. Knowing the answers will help you promote your business much more effectively:

  • How old are they?
  • What do they do for a living?
  • What are their lifestyles like?
  • Do they already buy the product or service?
  • Why will they buy from you and no one else?
  • How will you tell them about your business?

Naming your business

The name you choose for your business should reflect the image you want to project to your market. Pick one that’s easy to pronounce and remember, but do some research first. Make sure your chosen name is not already in use, it’s available as a web address and will work on your business stationery. You may also consider looking into the name’s meaning in different countries and languages – especially if you see yourself expanding internationally in the future.

If you have the facilities, you could test various names to see how people from your proposed customer base react. There are companies that provide this service, or you could do it informally by asking friends and family.

Taking on staff

If you take on employees – even part-time – you’ll need to familiarise yourself with employment law and know how to get the best out of your staff. There are plenty of guides that will help you to understand the law and make decisions to suit your business, such as the number of employees you need, what you should offer them and if they will be contractors or permanent. Here are some key things to consider:

  • What are my responsibilities and what do I need to provide them with?
  • How will I make sure they are properly managed and trained?
  • What should I pay them and does it match with the pay offered for similar roles in the area?
  • Does it comply with the National Minimum Wage and National Living Wage?
  • How will they benefit my business and help me to achieve my goals?

Writing it all down

When you write your business plan, remember to be clear, realistic and concise. It’s important to consider that someone reading it in the future might not be familiar with jargon or more technical terms, so writing it in plain English is advisable. You should use research and, if possible, evidence, to support your conclusions and include an action plan. Nothing needs to be set in stone, however; business plans are dynamic documents – meaning that you should adjust your plan as your business develops. See our in-depth guide to writing a business plan  [PDF, 6.2MB]

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

  • 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.

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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.

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how to write a business plan uk

How to write a business plan

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

A person at a desk in their workshop writing a business plan.

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.

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how to write a business plan uk

Read time:   5 mins         Added:   26/05/2023

A compelling and comprehensive business plan is an important asset for any business. It helps you to understand where you are now and where you want to be - then sets out how you intend to get there. If you need funding for your business, a detailed business plan can help give lenders or investors the confidence to invest.

5 things you’ll learn from this guide:

1. Why you should write a business plan

2. What to include in your plan

3. How to set SMART objectives

4.  How to develop your strategy

5.  The importance of financial forecasts

Why you should write a business plan

What to include in your plan.

  • How to set SMART objectives
  • How to develop your strategy
  • The importance of financial forecasts

The process of writing a business plan forces you to explore your business idea in detail and identify what you need to do to make it happen. It will quickly show up any flaws or potential stumbling blocks, allowing you to make your mistakes on paper rather than in your actual business.

A well-thought-out business plan will:

  • set a direction for the business and help you create an action plan
  • help you and your staff focus on what's important
  • show your commitment to banks, investors, colleagues and employees
  • help you to spot problems early on and tackle them effectively
  • set targets and evaluate your success
  • help you attract better-qualified staff

Business planning isn't just for when you're setting up – you should keep reviewing and updating your plan regularly. A plan is always a useful asset for persuading others to invest time, money and effort in your business, and keep your plans on track.

There are some key elements of a business plan:

Executive summary While this comes first, you should write it last. It’s a concise summary of all the key information in the full plan, and is your elevator pitch on paper.

Mission statement What is the purpose of your business – what problem are you aiming to solve for customers? You need to outline what you want your business to achieve, apart from making a profit.

Objectives How do you want your business to be performing in a year, and five years? You need to define your measures of success, making sure they are SMART.

S.M.A.R.T. Objectives

Objectives should meet each of these criteria:

Specific Outline clearly what is required in a simple statement.

Measurable Include some type of metric that will enable you to monitor progress and know when the objective has been achieved.

Achievable The objective should be challenging, yet grounded in business reality.

Relevant The focus should be on achieving the outcome, not the means of doing so.

Time-Bound There should be a target date by which the objective must be achieved.

Your strategy

Your strategy outlines how you intend to achieve your objectives. It details both the environment you’re operating in, and how you operate in it.

It’s vital that you understand who your potential customers are, and what they want. Alongside that, you should research who your competitors are  - not just businesses that do the same as you, but those that meet your customers needs in a different way too (indirect competitors). Our Understanding your market guide has more information.

You also need to be aware of the external opportunities and threats for your business. Economic conditions, changes in legislation and new technologies can all have an impact on your business. You should identify any which are relevant to your business and outline how you will respond to them.

Lloyds Bank business customers have access to Business KnowledgeBox as part of Internet Banking, which contains guides to setting up and running over 500 types of business and includes key market trends and issues, and trading and compliance considerations. 

Our customers also have access to the Lloyds Bank International Trade Portal which provides a gateway to explore international trade opportunities and detailed market information.

You’ll also need to outline how you’ll operate including:

  • Who your suppliers will be
  • The staff, facilities and equipment you’ll need
  • How you’ll promote your product or service 

Your Budget

Financial forecasts will help you, as well as potential lenders or investors, to understand if you have a viable business. You should provide details of your financial forecasts – how much you’ll sell and what the costs will be. Outline where the start-up funds will come from, and at what point you’ll need further investment for growth. 

Key figures you need to capture are:

  • Sales forecasts
  • Costs and overheads – staff, facility, energy
  • Assets – any significant company property
  • Investments, loans and grants A breakdown of costs, including tables detailing:
  • Start-up costs
  • Projected cash flow
  • Projected profit and loss
  • Projected balance sheet

You can also find more information and a range of business plan templates and examples at www.gov.uk .

We adhere to The Standards of Lending Practice which are monitored and enforced by the LSB: www.lendingstandardsboard.org.uk

Important legal information

Lloyds Bank is a trading name of Lloyds Bank plc, Bank of Scotland plc, Lloyds Bank Corporate Markets plc and Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH.

Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Lloyds Bank Corporate Markets plc. Registered office 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 10399850. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278, 169628 and 763256 respectively.

Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is a wholly-owned subsidiary of Lloyds Bank Corporate Markets plc. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH has its registered office at Thurn-und-Taxis Platz 6, 60313 Frankfurt, Germany. The company is registered with the Amtsgericht Frankfurt am Main, HRB 111650. Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH is supervised by the Bundesanstalt für Finanzdienstleistungsaufsicht.

Eligible deposits with us are protected by the  Financial Services Compensation Scheme  (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.

Small Business UK

Small Business UK

Advice and Ideas for UK Small Businesses and SMEs

how to write a business plan uk

How to write a business plan

how to write a business plan uk

Here's how to nail your business plan

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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 .

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The Step-By-Step Guide Of How To Write A Business Plan

How To Write A Business Plan: Step-By-Step Guide

You may have plenty of great ideas, but understanding how to write a business plan is essential if you want to grow your business, gain funding, and more. .

Yet, a lot of startups don’t take the time to make one or don’t often see the advantage that they can bring. 

Those with a business plan grew an average of 30% faster than those that didn’t. What’s more, they were 2x more likely to get investments or secure loans than those without. 

Ready to learn how to write a business plan? We’ve got the step-by-step instructions you need to write a business plan that works. 

Let’s get started. 

What you'll get from this page:

What is a business plan?

Before we dive into the details of writing a business plan, let’s just recap what one is. 

A business plan is a written document that describes your business. It may not sound like a lot, but it’s an in-depth guide to who you are, what you do, and how your business works. It’s useful for every business, whether you’re registered as a sole trader or limited company. 

A business plan covers all different subjects, such as: 

  • Your business objectives and goals;
  • Your employees and business structure;
  • Your products and how you market them;
  • Your customers, competitors, and industry;
  • Your financial information and funding needed.

Fundamentally, a business plan is there to clarify what your business is, set out your goals, spot any potential problems and set yourself up to grow. 

Why do I need a business plan? 

The most common reason why you need a business plan is to ask for investment.

If you want to get an investment from your business, you’ll need a business plan to show to your lender or investors. This is to show them exactly what the money is for, how it will be used and, more importantly, how it will make enough money to pay back the initial investment.

Your business plan is proof that you can be trusted with the investment and that you will pay it back. It’s peace of mind for your investors that you’re worth giving money to, and depending on the type of funding, that your business will be a valuable project for them. 

Without a business plan, you’ll find it hard to secure funding that doesn’t come from personal sources. That’s one of the reasons why understanding how to write a business plan is so important.

In addition, business plans are a great way to really solidify what your plans are and how you’ll grow. It forces you into asking some hard-hitting questions about your business, allowing you to solve problems because they cause big roadblocks for your company. 

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How to write a business plan

Right, now we’ve hammered home why you need a business plan, it’s time to start writing. But, before you open the document and get alarmed by the blank page that’s in front of you, here’s some advice. 

There’s no right or wrong way to write a business plan. This process is designed to help you uncover information about your company and guide you, not dictate every decision you’ll ever make from this point. So, breathe, relax and let us guide you through it. 

Generally, there are two types of business plans that exist: 

  • A traditional business plan
  • A lean startup business plan

Traditional business plans are more common and might be what you’re more familiar with. These can be dozens of pages long that list in detail about every aspect of your company. 

On the other hand, lean startup pages are only a page long. They’re not often used to secure investments, but as a way to summarise a business plan into the key bullet points. If you’re looking for a way to get the basics out of the way quickly, this type of business plan might be for you. 

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If you’ve never written a business plan before, it can be a good idea to start with a lean startup plan to get an overview of your business and goals. You may also want to write a traditional plan afterwards to help you focus more clearly on these objectives and map out your roadmap in more detail. 

Even if you aren’t showing these documents to investors at this stage, they’re good internal documents to look back on to keep you on the right path. 

Once you’ve decided which type of business plan you need, scroll down to the right section to follow our step-by-step instructions of how to write a business plan. 

How to write a traditional business plan

Traditional business plans are the norm and still widely used around the globe.

A traditional business plan is a more in-depth document that details almost every aspect of your company. If you want a thorough overview of your business or are trying to secure investment, this is the plan that you need. 

It’s made up of the following sections: 

  • Executive summary 
  • Company description 
  • Market research 
  • Organisation and management 
  • Product or service 
  • Marketing and sales strategy 
  • Funding requests
  • Financial forecasts 
  • Appendix 

Okay, that list may look daunting. But to help you through it, we’ll guide you through the business plan section by section, telling you what it’s about, what you need to include, and examples to give you the right idea. 

Right, let’s get started. 

1. Executive summary 

One of the first things we need to cover in our guide to how to write a business plan is the executive summary.

An executive summary is a high-level overview of your business. 

Its purpose is to describe your company to those that don’t have time to read your entire business plan, enticing them into finding out more about your company. 

It should include information about: 

  • What your business does in a nutshell;
  • What your product or services are;
  • Who you sell to;
  • What makes you different.

You’ll go into these factors in more detail later on, so don’t try to get everything in your executive summary. If you’re using your mission statement to apply for funding, it’s also a good idea to include a summary of the amounts here too. 

Although you don’t have any set word counts for any part of your business plan, you don’t want to go past a page for your executive summary. The key is the word summary here. Keep it short, sweet and easy to read. 

And because it’s a summary, it’s sometimes helpful to write this section last. That way you’ve had a chance to really think about everything in detail and hone in one the most important parts you want to portray here. 

Example executive summary 

Lick O’ Paint is an interior design and home decorating company. Its services include interior design work, home renovations, painting and decorating, and custom artwork. 

Customers  

Lick O’ Paint is for design-conscious home-owners who want to create a magical space for their home but are dissatisfied with the ordinary designs from other home decorating companies. 

Unique Selling Point 

Unlike other decorating companies, Lick O’ Paint was founded by an award-winning artist that not only can find pieces to fit a room but design and produce artwork bespoke for the space. 

2. Company description

Whether you sell cakes or law counselling, you have to describe your company in the business plan.

This is your section to provide detailed information about your company and what you do. 

A company description is made from these key elements: 

  • A mission statement;
  • Your history;
  • Your goals and objectives;
  • Your principal members.

If you’ve never written a mission statement before, this a 1-2 line description of why your business exists. It’s not simply a summary of what you do or what you sell, it’s the reason why you sell these products in the first place. 

For example, Nike’s mission statement isn’t to create sportswear . It’s to “Bring inspiration and innovation to every athlete in the world”. Powerful stuff. 

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Example company description 

  • Mission statement 

To transform houses into stunning homes full of life and personality. 

History  

Lick O’ Paint was founded in 2020 by award-winning artist Andie Bootstraps, after life-long friend Mark O’Chopping paid for, and was disappointed in, a recent home renovation. Stepping in to help recover the bland and lifeless space with bespoke art, Andie and Mark realised a gap in the market for those that want stunning and personal homes, without having to do everything themselves. 

Goals and objectives 

  • Gain a glowing reputation as the best interior design company in the Midlands. 
  • Complete at least 6 full renovations during year one, and 10 one-room makeovers. 
  • To double revenue in the first 2 years from £250,000 to £500,000. 

Principal Members

  • Andie Bootstraps – owner and head designer 
  • Mark O’Chopping – business manager/sales 
  • Gary Cannon – decorator and trades specialist 

3. Market analysis 

One of the most important points in your business plan is the competition analysis, also known as market analysis.

This is where you go into detail about your particular industry and where you sit within it. To do this section, you’ll need to carry out competitive research about other businesses that are similar to yours and the advantages or weaknesses you have over them. 

When doing comparative analysis, ask questions such as: 

  • What are your competitors doing well?
  • Do they offer any services that you don’t?
  • Do you offer services that they don’t?
  • What do customers say about them?
  • How do they market their company?
  • Who are their customers?

And so forth. 

Competitive analysis isn’t the time for blind-ego. Don’t just use this space to claim you’re better than anyone else. Instead, take a more honest look at the companies around you and what you can learn from them. 

This section is also the space to expand on your target customers in more detail. 

Example market analysis 

Industry  

Lick O’ Paint is within the design and home trades industry. During the 2020 coronavirus pandemic, home renovations and DIY projects took a 200% increase, increasing revenue by £3.4 billion in the UK, proving an incredibly lucrative industry and time to invest in a company.  

Lick O’ Paint’s biggest competitors are The DIY-ers, which specialises in completing home renovation work, and The Home Designers, a team of interior designers that have won the ‘Best Designed Home’ award for the last three years running.

Unlike Lick O’ Paint, none of the competitors is founded by an award-winning artist who can design bespoke artwork as part of the home renovation packages. 

Detailed description of customers 

Lick O’ Paint customers are between the ages of 30-60 with a household income of £50,000+. 

They are design-conscious home-owners who want to create a magical space for their home, but are dissatisfied with the ordinary designs from other home decorating companies.

Working full time, our customers don’t have the time nor desire to complete DIY projects themselves and would rather use their home to relax after a long day. Instead of decorating themselves, they would rather outsource the work for a professional finish. 

Company advantages 

Lick O’ Paint’s biggest advantage is that we provide both interior design, home renovations and bespoke artwork by award-winning artist and founder Andie Bootstraps. 

In addition, Lick O’ Paint stands out due to:

  • Fully bespoke/unique designs for each client. 
  • Artwork that is created for the space, not found to ‘dress’ it afterwards. 
  • In-depth consultations before every project to really get a sense of the home-owners personality. 

4. Organisation and management 

It is also important to describe how your company is organised, more specifically hierarchical bonds.

This is where you list how your company is structured and who will be running it. 

For this section, you might want to include CV’s of your key personnel to help paint a better picture of your company. These CV’s can be uploaded to the appendix so the reader can quickly jump to and find the information they need. 

5. Product or service

So, what does your company actually sell? 

This is the section to lay down exactly what services or the types of products you offer. You don’t need to include your entire category, but give an overview of everything that your company does and extra information such as a product lifecycle, production, and distribution, or any research and development into future productions. 

This is also the section to include your pricing structure and how much you charge for each service. 

Example product or service 

Product/Service 

Services include: 

  • Interior design planning and services;
  • Design consultations;
  • Painting and decorating services;
  • Bespoke room design and planning;
  • Custom Andie Bootstraps interior artwork;
  • Full home renovations.

Pricing structure

Prices are determined on a case-by-case basis dependant on the level of work involved. As a base price, Lick O’ Paint charges: 

  • £500 for a one-day consultation;
  • £1,000 for 3D interior design plans;
  • £5,000 per room renovation.

6. Marketing and sales strategy 

You might have the best product in the world, but if you can't sell it, your business will fail. Make sure you have a strong marketing strategy.

Customers make a business. 

Without customers, your business is just an idea. So, this section details exactly how you plan to get and sell to your customers. 

It should outline what strategies your company will use to generate leads and sales and how you plan on making people loyal customers that will always turn to your brand. 

With marketing, remember that there’s no single way to sell your product. Marketing strategies aren’t something that you should set in stone either. They always grow and evolve with your company and as you try out new things that work or don’t work. 

Want some tips for your marketing strategy? Why don’t you read our guides to find out how PPC advertising and SEO can drive traffic to your website , how to market a small business on social media , and more on our blog. 

Example marketing and sales strategy 

Marketing and sales at Lick  O’ Paint is led by Mark O’Chopping, who has over 10 years experience in sales. 

Lick O’ Paint’s marketing and sales strategy will leverage the following tactics to attract customers. 

  • Word of mouth;
  • Reviews and ratings on local directories;
  • Local PPC and social media ads;
  • Print advertising at relevant art events and galleries;
  • Social media, including leveraging Andie Bootstraps existing 50,000 Instagram followers. 

Because interior design is a visual industry, we will be relying heavily on social media profiles and presences to visually showcase the bespoke designs we create. In addition, we’ll also take advantage of Andie Bootstrap’s unique links within the art world to advertise Lick O’ Paint at relevant art shows and exhibitions. 

The sales process will work as follows: 

  • Mark O’Chopping will contact leads, getting information about their project and setting up a consultation with the design team. 
  • The team will have a consultation with the client, talking through initial ideas and plans. 
  • The team will design and present plans to the client and arrange a contract for the completed work. 

7. Funding request 

If you’re learning how to write a business plan to apply for funding, this is the section you’ll need to pay the most attention to. 

For this, you need to clearly explain how much funding you’ll need for the next five years and exactly what you’re going to use it on. Be as specific as possible in your request and outline and outline how this investment will lead to more revenue from your company. 

8. Financial projections 

Finances and accounting are not for everyone but they are paramount to make any company profitable. Make sure you analyse thoroughly this section of your business plan.

If you’re applying for funding, financial projections are an essential piece of information that you’ll need to supplement and back up your request. 

But even if you aren’t applying for funding, financial projections are an important one to include because they convince the reader that your business is stable and will be a success. 

Financial projections show to your reader that you’ve done the math and that you predict that your business is using a profitable model that will be sustainable. 

If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, here’s where to list it.  

Just be careful to make your financial projections realistic. People will see through optimistic plans that don’t account for the possibility of any disaster. What’s more, over-optimistic forecasts can lead to increased overheads. This will cause a dramatic problem with your cash flow and may even result in drastic cost-cutting down the line to put it right. 

Need some help with your finances? Find out 5 ways you can reduce your business costs here. 

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8. Appendix 

The appendix is the place to put any supporting documents or materials that were requested or support the statements that you’ve made. 

This can include: 

  • CV’s of key personal;
  • Credit histories;
  • Product pictures or portfolio of work;
  • Letters of reference;
  • Licenses or permits related to your business;
  • Legal documents or patents that you hold.

And that’s it! That’s your first business plan written and ready to go.  

How to write a lean startup business plan 

One sheet is all it takes to write a lean startup business plan. Don't go into much detail and cover all aspects of your business.

A lean startup business plan is the quicker, less detailed business plan option that you can write. It’s great for those that just need a high-level overview of your business that can be scanned. 

If you’re planning on applying for funding, you may want to scroll up to see how you can get started writing a traditional business plan instead. 

There are many different types of lean startup business plans. This is because it’s a less formal overview of your business, meaning you can pretty much swap and change up the sections to suit your business. 

However, to get you started we’d recommended including these sections: 

  • Company overview 
  • Unique selling point 
  • Target customers  
  • Market analysis 
  • Products or services 
  • Marketing strategy  
  • Key personnel 
  • Goals and objectives

Don’t be alarmed by the number of sections here. You’ll only need a quick sentence or two for each of them, meaning your overall document will be just a page long. 

Right, ready to get stuck in? 

1. Company overview 

This is a description of your company in a nutshell. 

Example: Lick O’ Paint is an interior design and home decorating company that offers designs by award-winning artist Andie Bootstraps. 

2. Mission statement 

A mission statement is an overall problem that your company is trying to solve, or the core reason that you were founded. This is another one-line description of your company, but instead of saying what you do, you need to say why you do it. 

Example: To transform houses into stunning homes full of life and personality. 

3. Unique selling point 

What do you do that your competitor's can't do? This is your value proposition or unique selling point!

Your unique selling point should showcase the value that you provide, that no other business else can offer. Also known as a value proposition, this is what makes your business different from the other companies in your industry. 

Example : Lick O’ Paint is the only interior design company founded by an award-winning artist who can design bespoke artwork as part of the home renovation packages. 

4. Target customers 

Who are the ideal customers of your business? Think about the people that would buy your product or service and summarise them into 1-2 sentences. 

Example: Lick O’ Paint is for design-conscious home-owners who want to create a magical space for their home but are dissatisfied with the ordinary designs from other home decorating companies. 

5. Market analysis 

This is where you list what industry your company is a part of, as well as your biggest competitors. As this is a summary, you won’t go into detail about these sections, but they are a massively useful tool for your business to utilise if you haven’t already done so. 

Example: Lick O’ Paint sits within the design and home trades industry, which has increased 200% during the 2020 pandemic, increasing revenue by £3.4 billion in the UK. Our biggest competitors in this industry are The DIY-ers and The Home Designers. 

6. Product or services 

This is where you list what your company sells. This is either a physical product or a service that you provide. Because this is a summary, you don’t want to list every single product that you sell. Just give an overview of the type of products that you offer. 

Example: Lick O’ Paint provides interior design plans and consutaltions, home renovations, painting and decorating and custom Andie Bootstraps artwork. 

7. Marketing strategy 

Now, you don’t have to list your entire marketing strategy here. This will be more of a summary of the channels that you’ll use to attract new customers into your business. After all, without your customers, there is no business. 

Example : Lick O’ Paint will primarily use social media profiles and presences to visually showcase the bespoke designs we create. In addition, we’ll also take advantage of Andie Bootstrap’s unique links within the art world to advertise Lick O’ Paint at relevant art shows and exhibitions. 

8. Key personnel 

All companies are made of people, so don't forget to mention the vital elements of your team.

Who’s involved in your business? List all the key people that are part of the package and their roles within the company. 

A quick bullet point list here will do. 

Example: 

9. Goals and objectives 

What are the key goals that your business is trying to achieve over the next few years? This is the space to list them in a quick bullet list. 

The key to setting goals is to be optimistic, but realistic. You don’t want to downplay your business by already thinking you can’t achieve a certain thing. In the same vein, you don’t want to blindly set a goal to be the best in the world. It needs to be something that’s measurable and realistic. 

How To Write A Business Plan: Key Tips 

No matter what type of business plan that you’re writing, we thought we’d lay out some of the key tips to make sure it’s the best it can be. 

  • Be concise. A business plan isn’t the place to ramble on about yourself. It’s a summary that’s built to provide investors, partners, or yourself with the key information about your business. So, make it easy to read by sticking to the important facts and dropping all the fluff. 
  • Make it simple. When writing business documents, there’s a preconception that you need to use complex words and language to make yourself sound smarter or more important, which is rubbish. Using complex language and words inside your business plan will just make it harder to read. And when you’re looking for investment, the last thing you want to do is make this process even harder. So, keep it simple. 
  • Be specific. Business plans aren’t the places to be vague or to guess. They need to be precise and specific, so give exact figures and calculations where possible. 
  • Do your research. One of the biggest factors for any business is to really know who your target audience is and your market. It’s no good just guessing at this information, you need to know exactly what your industry is and who your competitors are. If you haven’t done the research, it will show in your business plan. 
  • Know your finances. Finance isn’t the easiest subject for everyone. But, it is an essential one if you’re to work out how your business can be successful and make money.

Finance is a big part of building a business plan. So, if you’re unsure of your finances, talk to an accountant or expert for their advice planning before you start to write yours. It will make the process a lot easier, and give you a much clearer picture of your financial future. 

If you’re handling your finances yourself, why not free up some of your time by investing in some of the best accounting software around. 

By following our advice and step-by-step instructions, you’ll have a business plan that you can use to secure investments and help drive the growth of your business. 

Want more tips and advice on how to run your business? Keep an eye on our blog for more news and helpful articles. 

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How to Write a Business Plan in 8 Simple Steps

Nic Redfern

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 .

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.

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8 step business plan checklist

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.

Why should I write a 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.

How to write a traditional business plan

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

How to write a lean start up business plan

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

Tips for writing a business plan

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.

Get your small business off to a great start

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…

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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.

how to write a business plan uk

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Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice. 

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

  • Product goals and deadlines for each month
  • Monthly financials for the first two years
  • Profit and loss statements for the first three to five years
  • Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

  • Executive summary
  • Description of business
  • Market analysis
  • Competitive analysis
  • Description of organizational management
  • Description of product or services
  • Marketing plan
  • Sales strategy
  • Funding details (or request for funding)
  • Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

  • What is the vision and mission of the company?
  • What are the company’s short- and long-term goals?

See our  roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

  • What business are we in?
  • What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

  • Who is our customer? 
  • What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

  • Who is the competition? 
  • What do they do best? 
  • What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

  • What is the product or service?
  • How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

  • Who is the target market (if different from existing customer base)?
  • What channels will you use to reach your target market?
  • What resources does your marketing strategy require, and do you have access to them?
  • If possible, do you have a rough estimate of timeline and budget?
  • How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts. 

Start by answering the following questions:

  • What is the sales strategy?
  • What are the tools and tactics you will use to achieve your goals?
  • What are the potential obstacles, and how will you overcome them?
  • What is the timeline for sales and turning a profit?
  • What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

  • How much capital do you currently have? How much capital do you need?
  • How will you grow the team (onboarding, team structure, training and development)?
  • What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years. 

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

  • How and when will the company first generate a profit?
  • How will the company maintain profit thereafter?

Business Plan Template

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy. 

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

  • Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company. 
  • Add a Company Overview Document the larger company mission and vision. 
  • Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
  • Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
  • Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
  • Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
  • Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
  • Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
  • Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting. 
  • Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates . 

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

  • Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
  • List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
  • Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
  • Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
  • Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.). 
  • Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
  • Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
  • Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Lean Business Plan Templates for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of  startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

  • Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
  • Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
  • Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
  • Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
  • Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships. 

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

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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.

An empty notepad with a pen next to it symbolising the start of any business plan

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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.”

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Setting up a business as a sole trader

Your step-by-step guide to setting up your business as a sole proprietorship..

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In this guide

Step 1. Should sole traders write a business plan?

Step 2. how to register as self-employed in the uk, step 3. set up your space, step 4. open a business bank account, step 5. setting yourself up financially, step 6. you may need small business insurance, step 7. can sole traders employ people, step 8. begin marketing your business, and hopefully profiting.

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If you’re launching a business by yourself, setting up a sole proprietorship is your simplest option. It’s far less complicated than setting up a corporation.

However, there are still a number of essential steps to take. In this guide, you’ll learn what these essential tasks are and how to complete them.

Technically, you don’t need to write a business plan, unless you’re seeking outside investment. However, this remains a hugely beneficial task for sole traders either way.

A business plan helps you to understand why your business will be profitable. When written properly, it will help you identify and overcome potential hurdles before they pop up.

Your sole trader business plan should include the following sections:

  • Business name and address.
  • Your mission statement. Why does your business exist? What do you hope to achieve? What is your vision for the future?
  • Your target market. Include as much detail as possible. Write down why you have chosen to serve this demographic. Is there a gap in the market?
  • Products and services . A full list of what products and services you offer. How much does it cost to deliver each of them? How much will you sell each product and service for? What is the net profit?
  • Competitors. Who are they? Why would customers choose you instead of them. What is your unique selling point?
  • Marketing plan. What platforms will you use to market your business? What is your budget for each platform?
  • Financial plan. What are the estimated monthly running costs of your business, including the cost of launching? What are your monthly sales forecasts and how much profit will that attract? It’s good to have a minimum target, base target and stretch target.

It’s recommended to review and tweak your business plan at least once every quarter.

Sole traders should register as self-employed with HMRC at the earliest possibility. You can do this by visiting the government’s online registration portal .

You’ll need to decide on a business name, although most sole traders choose to use their own name.

After filling out your details, HMRC will post you a 10-digit Unique Taxpayer Reference (UTR) and login details for your online account. Keep hold of these, as you’ll need them to fill out your self-assessment form online.

Most sole traders are able to work without having to rent office space. Still, if you need a dedicated place of work, there a few cut-price options. Investigate whether a virtual office, co-working space or a serviced office could meet your needs. These are typically all cheaper than renting traditional office space.

No matter what your business is, an online presence is crucial in 2023.

As such, you’ll need to set up:

  • A professional website with web hosting and a unique domain name
  • Social media profiles
  • A presence on Google Maps and other listings websites in your niche

A business bank account basically works like a personal one – the main difference is that it’s dedicated to your business’s finances. You should therefore expect the same features, such as a debit card, the ability to make and receive payments, an overdraft option, a banking app and so on. You can compare business bank accounts here .

It may cost you a fair amount to launch your business, especially if you have a lot of equipment to buy. Our guide on business financing can help you find the best way to fund this if you don’t have money saved up.

Perhaps you’ll choose to set up a business bank account with an overdraft, or a business credit card to help set yourself up.

Make sure to keep accurate accounts of your spending and your income ready to submit to HMRC for the end of the tax year. Remember that most business expenses are tax-deductible .

Here is a list of small business insurance products you may need as a sole trader.

  • Public liability insurance (PLI). Protects you against claims resulting from customers or employees injuring themselves due to the activity of your business.
  • Professional indemnity insurance (PII). Protects you against legal claims for damages if your business negatively affects a customer.
  • Product liability insurance (PLI). Protects you from paying for damages to property or personal injury caused by your products.
  • Business contents insurance. Protects you from covering the cost of lost or stolen contents.
  • Personal injury or sickness insurance. Pays you a monthly income if you become injured or too sick to work.

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Yes, sole traders can employ people. When doing so, you’ll have the same responsibilities to your employees as a corporation does.

These responsibilities include:

  • Registering as an employer with HMRC
  • Paying taxes on your employee wages
  • Creating an employment contract
  • Setting up a payroll system to automate payslips for your employees and deduct the right amount of tax from their wages
  • Setting up your employees for pension auto-enrolment

It will help to read up on various aspects of employment law, including the rules surrounding working hours, minimum wage, maternity leave, hiring and firing regulations, employee discrimination and so on.

With an effective marketing strategy outlined in your business plan, there should be no reason not to start marketing from the day you launch.

An effective marketing strategy should start attracting customers immediately.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use . When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

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Matthew Boyle

Matthew Boyle is a banking and mortgages publisher at Finder. He has a 7-year history of publishing helpful guides to assist consumers in making better decisions. In his spare time, you will find him walking in the Norfolk countryside admiring the local wildlife.

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How to write a business plan

Rebecca Goodman author photo

Why will your business thrive and be successful when so many others fail? The answer will be found in your business plan.

Man writing a business plan, filing accounts for a small business

You’ve got your idea, you know you’re going to start your business, so how do you take it from that brilliant concept in your mind to a fully functioning business? The first step is to write a business plan. 

It’s the basis for any successful business and it’s an important first step before you get going. A good business plan is not only key for securing funding to your venture, it can also help you organise how it will all work, from the initial ideas to an actual company where you can sell your goods. 

Here we look at everything you need to know about writing a brilliant business plan to get you started. 

What is a business plan? 

The first step in the creation of any new business is an idea. One that is original, inspiring and crucially one that will be profitable. 

Once you’ve got your business idea, it’s then time to think about the business plan. 

Creating a business plan is a critical step and it needs to be carefully thought and out created so you can give yourself every chance of success. 

It should cover the following topics:

Description of your business

Your objectives

Strategies to achieve success

Sales and financial forecasts

A marketing plan

How much funding is needed 

You need to pack a lot into the plan, but it also needs to be well structured and organised. It will explain every aspect of your business and encourage potential investors to part with their money. 

It’s not something you can knock up in an afternoon either, it should take a few weeks to create, according to the experts at the Prince’s Trust. 

Why you need a business plan

To apply for funding from a bank, investors, or other source such as a government start up loan, you will need to have a business plan. 

It can also help you to… 

Organise your thoughts

Clarify your business idea

Highlight any potential problems

Outline and update your goals

Measure your progress

Convince customers or potential employees to support you

How to make a business plan

Business plan

Your business plan needs to be structured and include all the relevant information needed. It can’t just be a jumbled collection of your thoughts. 

A good place to start is to look at a sample business plan, and there are lots of free ones online including from the Prince’s Trust website . There is also a free business plan pack you can download which will guide you through every step of creating a plan. 

Business planning is completely unique to your company but the following points are all worth including.

Executive summary and quick pitch - This will be the first part of your plan anyone will look at and perhaps the only section if they are busy. It needs to be succinct, organised and not too detailed. This is where you’ll lay out the basic facts and key points about the business and how it works. It’s a summary of your business, so you should write this part last.

All about you - Here is where you’ll explain why you want to start your business, what qualifications you have, and any relevant work experience, training and hobbies. Include a CV and give reasons for why your background will help you to make the business a success.

What will your business sell? - Now it’s time to talk about the goods or services you’ll be selling or maybe your business will be a combination of both of these - such as a cake company offering training courses. Remember that the person reading your plan may not be familiar with the items you’re offering, so give a basic introduction and avoid any jargon they might not understand.

Who will your customers be? - Customers make a business but who will yours be? It’s time to describe who will pay you for your products and to show you fully understand them. Include details about your target market but don’t be too vague. For example, if it’s a cleaning business, will you be hoping to attract local businesses and households first? If so, include this specialised group, rather than listing all the customers you’d like to reach eventually.  If you’ve already started selling, include details about existing customers.

Who are your main competitors? - Where are your potential customers currently buying your product from, how many businesses supply it, and how well are they doing. This is your chance to show you’ve done your market research and you know who your competitors are and most importantly, how you’re going to be better than them.

How will customers pay and receive your products? - Moving away from the ideas and concepts of your business, you also need to talk about the nitty gritty of day-to-day operations. This includes where you’ll make your product and how it will be sent to customers. You’ll also need to include details about payment, will they pay in cash, by card, or by cheque? Can they buy directly from you or through a third-party website? To make sure you include all the details, imagine you’re making a first sale and walk through every step of the journey, from advertising the item to it arriving at your customer’s doorstep.

How much will it cost? - You can’t price your products until you know how much it costs to make and deliver them. You’ll also need to include things like paying for your time, any employees you have, renting out storage space, energy bills, insurance, and delivery costs.

How much money will you make? - Include a forecast of how many sales you would like in your first year, and how much money this will raise. You can then include a cost forecast, which shows how you will spend the money you’ve made in your first year.

What is your plan B? - Things don’t always go to plan so it’s well worth including details of a back-up plan. What happens if you’ve just launched your chocolate business, for example, and there’s a world-wide shortage of cocoa? While it’s impossible to predict everything, it’s worth considering any potential pitfalls that could derail your business so you’re as prepared as possible. 

These unsecured and secured loans could help you grow your business, cover running costs or even fund a new company.

What you don’t need to include

Be careful not to overload your business plan. Here are a few things to consider leaving out.

Jobs, experience, or training that isn’t relevant to your business

Vague or unrealistic financial projections

Non-specific research into your market and your customers

Anything unrealistic that over-hypes your business

Confusing or unplanned thoughts or research 

Business plan templates to use

You can download a free business plan template from the government’s Start Up Loan website or from the Prince’s Trust website . There are also lots available online and on social media - just be wary you’re choosing one from a genuinely successful business.

Top tips for creating a business plan 

Every business plan will look slightly different and that’s because it’s completely specific to the business being created. While business plans are helpful for showing you what you need to include, it’s up to you to really narrow down the details of your plan and to make it as tailored to you as possible. 

Here are some quick tips to follow for your plan:

Write the executive statement and quick pitch when you’ve finished your plan

Don’t include everything you’ve ever done, you don’t want to overload it

Be specific, use real-life examples and details of actual customers

Don’t over-exaggerate your financial goals, be realistic 

Always check and re-check your figures 

Avoid statements you can’t justify

Include potential reasons for your business to fail - and how you’ll overcome these

What to do with your business plan 

Business plans are crucial for any kind of business, and you’ll need to show one if you are applying for funding of any sort. 

You will need to make sure yours it up to date and has relevant information in, so it’s worth reviewing it at least once a year or more regularly if there are big changes to your business, or to external factors such as the economy. 

Aside from securing funding, they have other benefits too including the following:

Attracting customers and suppliers

Depending on the nature of your business, a business plan could be a good way to secure new customers. If it’s brand new, customers may be interested in where the business is going, how it’s funded, and how secure it is, before they part with their money. This applies to suppliers too, a company will want to know you will have the funds to pay them before they agree to ship your products, for example.

Finding new partners or employees

You may be running everything on your own, or you could be outsourcing jobs to other people or companies. If you’re hiring employees or even considering selling your business, you’ll need to be able to show how it works, how secure it is, how much money it makes, and its future.

Working out your budget

Keeping the books balanced is critical for any business and within your business plan, you should have detailed sums showing how yours is funded. This will give you an idea of pricing for whatever you’re selling and also what to do with the money you receive. There are lots of questions you can answer by looking at these calculations, such as: Will it go straight back into the business, can you take a bonus, or will you put any extra money towards a new investment?

Spotting potential problems early

No one wants to think about their business failing but by doing this you can pre-empt things going wrong. A thorough and well-researched business plan should give you an idea of any areas you need to be wary of, and any potential problems that could arise. 

Related guides

  • 6 easy ways to get finance for your business
  • How to get a business loan
  • Business loans guides

About Rebecca Goodman

Business Plan Template.

While your company’s goals might be crystal clear in your head, going in without a formal business plan could make things tricky. If the idea of creating one seems daunting, don’t worry. With a free business plan template, you can be up and running in no time. 

Discover more about how to create your ideal business plan and download free templates to get started here. 

Download Your Free Business Plan Template. 

Download your own free business plan template and jump right into planning your next venture. You can download a free business plan template with Adobe.  

how to write a business plan uk

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What you'll learn:

•   What is a Business Plan?

•   Why is a Business Plan important?

•   How to Write a Business Plan.

•   Download Your Free Business Plan Template.

What is a Business Plan?

Business plans define core business objectives and the strategies to achieve them, in the form of a written document. They’re key for all types of businesses - whether they’re small and medium-sized businesses (SMEs), start-ups or individual entrepreneurs.  

Generally, a straightforward and simple business plan template can be divided into the following five sections: 

  • Executive summary
  • Business description and structure
  • Market analysis and strategies
  • Organisation and management
  • Financial documents.

Why is a Business Plan important? 

A good business plan can be a vital tool, as it can act as a guide through each stage of starting your company. When you’re lost, it can be your compass to get back to the right track and help you and your team realign with the original vision. Think of it as a map pointing you from now to the future.  

It can also be a helpful document for the relevant external parties, such as investors or lenders.  

Here are some key benefits: 

  • Outline and Clarify Goals . Using a business plan template can help you to define and set goals, helping you to easily pitch them when required. It can serve as an excellent touchstone, too. 
  • Identify Issues . By clearly outlining plans ahead of time, you may be able to identify issues early - whether in the planning stage or based on the reality of deliverables versus the plan. 
  • Secure Financing . Being able to confidently lay out your goals, analysis, forecasted spending, personnel requirements and business structure is a great way to build confidence and potentially secure financing. 
  • Measure Progress . By comparing progress against your goals, you can get a sense of a project’s timescale and forecast for any potential disruptions or changes. This means you can stay on track and better adapt to any unknowns. It may help you plan for the future, too. 

How to Write a Business Plan.

Building upon a business plan template may seem daunting - but when you break it down, it’s no more intimidating than planning a trip. Just like a holiday, it requires preparation and organisation, but can be exciting. It’s a chance to see all your ideas come together into something coherent and actionable. 

Important Sections to Include in Your Business Plan Template.

  • Business, Products and Key Objectives . This lets you set an overall scope for your business plan and serves as a fundamental part of your company. 
  • Target Market and Competition . Analysing your target market and competition lets you make informed business decisions and can help to justify your plan. 
  • Sales and Marketing Plans . Detailing your sales and marketing plans can help you to arrange KPIs in the future and show how you’re utilising the data from your market research. 
  • Operational Plans . This section details the day-to-day running of your business, giving an in-depth outline of strategies for specific teams or supply chains. 
  • Personnel Structure . Writing a personnel structure gives you a sense of key responsibilities and requirements within the wider business. This can be an excellent place to take note of the skills that roles might require, what you already have and what you might need. 
  • Financials . Breaking down the operational costs and funding required for your business can help you to set future goals and secure backing if required. 

Having a PDF printable business plan template makes things easier when it comes time to format, print and share it with potential stakeholders. If you want to change the file format of your business plan, you can easily convert PDF to Word   and back again. 

Sharing your business plan as a PDF also allows for easy collaboration, with no subscription required and the ability to add comments, highlights and notes with our free online PDF editor tool .  

Top Tips for Your Business Plan.

Writing a business plan template is easier with these top tips, so you can get off to a smooth start - whatever your project. 

  • Be Realistic . Being realistic about your business plan means you can make informed decisions and will have minimal friction as the project progresses. 
  • Understand Your Market . By demonstrating an understanding of your market, you can better inform decisions and plan. It also makes your vision an easier sell. 
  • Keep it Concise . Don’t waffle on or obscure important facts in jargon. If you want to add additional detail, create an appendix to expand on areas. 
  • Stay Professional . This is key, as your business plan serves as a reference point both for internal operations and potential business. 
  • Review Your Business Plan . During the process of creating a business plan, certain details may change and mistakes can be made. Review your plan to ensure everything is correct and to double-check if anything needs to change with any new information during the process. You can easily edit business plans in PDF with Adobe Acrobat PDF editor online . 

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COMMENTS

  1. Write a business plan

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  6. Free template: How to write a business plan

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    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.

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    A well-thought-out business plan will: set a direction for the business and help you create an action plan. help you and your staff focus on what's important. show your commitment to banks, investors, colleagues and employees. help you to spot problems early on and tackle them effectively. set targets and evaluate your success.

  13. How to write a business plan

    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.

  14. How To Write a Business Plan in 9 Steps (2024)

    Keep the tone, style, and voice consistent. This is best managed by having a single person write the plan or by allowing time for the plan to be properly edited before distributing it. 6. Use a business plan template. You can also use a free business plan template to provide a skeleton for writing a plan.

  15. How To Write A Business Plan: Step-By-Step Guide

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    Mission statement A strong mission statement sets out exactly what your business is and stands for, providing focus for your activities and giving everyone, from investors to staff and customers, a reason to support you. In a nutshell, it captures the company values and vision in powerful language that motivates you and your team to do more. Goals

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    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.

  20. How to Write a Simple Business Plan

    Write the Executive Summary. This section is the same as in the traditional business plan — simply offer an overview of what's in the business plan, the prospect or core offering, and the short- and long-term goals of the company. Add a Company Overview. Document the larger company mission and vision.

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    marketing financial forecasts At the start of your business plan, you should also include an executive summary - a shorter section that condenses the overall report and highlights key points. Why do you need a business plan? Business plans have obvious external uses.

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    Your objectives Strategies to achieve success Sales and financial forecasts A marketing plan How much funding is needed You need to pack a lot into the plan, but it also needs to be well structured and organised. It will explain every aspect of your business and encourage potential investors to part with their money.

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    Sharing your business plan as a PDF also allows for easy collaboration, with no subscription required and the ability to add comments, highlights and notes with our free online PDF editor tool. Top Tips for Your Business Plan. Writing a business plan template is easier with these top tips, so you can get off to a smooth start - whatever your ...

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    How to write a business plan: A step-by-step guide . A comprehensive and well-thought-out business plan demands careful thought, detailed research, and a clear understanding of your business landscape. That's why we've laid out the steps to help you get started. Step 1: Understand the purpose of your business plan