Contents

  1. 1. What is a business plan?

Business Plan Template

June 17, 2021If you’ve ever thought about launching a start-up, running your own business or expanding an existing one, then you've probably already thought about writing a business plan. There's great value in writing down a set plan for your business, and, while some entrepreneurs may be tempted to skip this stage (research has found that a quarter of SMEs don’t have a business plan) and dive straight in, that would be a mistake.  You’re actually 2.5 times more likely to get into business if you do some business planning beforehand.The good news is that if you've ever scribbled down a business idea on a notepad, then you've already done the hard work: coming up with an idea. But now you need to refine it, and create something that will get other people excited and invested in your business. Before you put pen to paper (or fingers to keyboard), you need to have a clear idea of what you need to include in your business plan, who it’s for and why you’re writing it.Read on to find out why a business plan is so important, follow our step-by-step guide to creating your own business plan and download our free business plan template.

What is a business plan?

A business plan is a document that details the goals, aims and objectives of a business. It gives readers and potential investors a roadmap of how you aim to achieve your business goals and make your enterprise a success.This plan shouldn't go into too much detail either, and doesn't need to include every eventuality you can think of, every financial detail or the ins and outs of the business itself. It doesn't even have to be a formal document.Generally speaking, a business plan spans a few pages, but can be longer or shorter depending on the kind of business you're building. You want your plan to be easy to read and understand by someone who isn't familiar with your idea. That means it should most likely no longer than ten or twelve pages, if your business idea is pretty complex.It's a document that you can easily share and update, is simple to read and highlights the important milestones of your business' journey. It also helps you to clarify your business structure and business strategy, subsequently summarising the kind of business you want to build and share with potential partners and investors.

Why is a business plan important?

Building a good business plan is important because it will help you to:
  1. Understand your market
  2. Refine your business idea
  3. Set stretching goals
  4. Make better decisions
  5. Raise funding
  6. Prepare for potential crises 
A well-written business plan is the first thing an entrepreneur should do to get their ideas out of their head and make their start-up a reality. It will show any backers that you have a serious strategy and your business is worth them putting money in to.

How do I write a business plan?

Now you know what a business plan is and why it's so crucial for your company. If you've never written one before, we will walk you through everything you need to know below.In this article, we've created a step-by-step guide to take you through creating your first business plan. We've included the essential sections that every business plan needs to have, from what you'll need to write to making your business plan stand out for all the right reasons.We've also included a handy business plan template for you to fill in to help make this process as stress-free as possible, leaving you to get on with the exciting prospect of launching your business.

What are the must-haves in a business plan?

Business plans vary in length and can have a seemingly endless list of things to include. The last thing you want to do is turn off any potential backers with something that's a chore to read. Here, we will look at what are the must haves for your business plan. We've narrowed it down to nine key components that every business should include that will give any readers of your business plan a clear overview of your business' structure and goals.As an overview:
  1. Executive summary
  2. Company description
  3. Market analysis
  4. Customer analysis
  5. Competitor analysis
  6. Marketing plan
  7. Operations plan
  8. Management structure
  9. Financial plan
This is your business plan, so feel free to tweak it as you see fit. Including these sections will ensure that your business plan presents a dynamic picture of your company without overloading the reader with unnecessary information.Now, let's take a look at each section of this business plan and how to write each part.

Executive summary

The executive summary of your business plan is there to provide an overview. It should summarise the key points of your business plan and get the attention of busy executives and investors.The executive summary should be concise and to the point. As a rule of thumb, it should be no more than two pages long.This may be the only part of your business plan that some people actually read, so catch their interest with an engaging introduction or story behind your business. People care about your purpose, or the "why" behind what you do, so be clear on that.Treat your executive summary like a pitch for your business. Try reading it aloud to a friend. If they're excited about your business and understand what you're trying to achieve, then you're on the right track. If they start to drift off, then it's time to go back to the drawing board.Top tip: even though it appears at the beginning of your business plan, most entrepreneurs write this section last. That way, you can cherry pick the best parts of the business plan to include and check for any mistakes or inconsistencies.

Company description

The company description is the who, what, where, when and why of your business. You should include information like:
    The registered company name.The structure of the business, if you own it outright or if it's a partnership. Include who owns what.The management team – who is responsible for what.The company location.A mission statement. This is a simple sentence that is memorable, builds brand awareness and defines the purpose behind your business.A vision statement, which describes where you want to be in the future.A brief description of your products or services and your target market.Your key goals and objectives. These should be measurable and realistic.
You may be tempted to give your reader chapter and verse on your business, but remember, you can dive into more detail about your potential customers, operations and financials later on. Keep it succinct.If you're struggling for inspiration, why not take a look at what companies write on their 'About Us' or 'Company Profile' pages, like this example from Starbucks.

Market analysis

In this section, you need to show a clear understanding of your market and how you will stand out. What are the trends that affect your market and how large is it. Is there enough room for you and what unique services will you bring to the table.Running a SWOT analysis will give you and the readers of your business plan a good idea of your strengths and weaknesses, and how your business will capitalise on opportunities in the market.To use the SWOT framework, simply write down your:
    Strengths: What does your business do better than anyone else?Weaknesses: Where could your business improve?Opportunities: What opportunities in the market could you take advantage of right now?Threats: What threats in the market could hurt your business?
This section is where you can show off that great market research you've carried out, in the form of data and statistics, surveys and opinions.

Customer analysis

No business can survive without customers. It's unlikely you'll be selling to anyone and everyone. For your business to survive and thrive, you'll need to have a target customer and understand how to reach them.To get an idea of your ideal customer, ask yourself these questions:
    Who is your ideal customer?How many customers fit this description?What problem are you trying to solve for your customers?How much money do they want to spend?Where are they based?How will they find your business?
You also need a clear understanding of how your customers make the decision to buy your products or service. What drives them to make a decision and what motivates them to finally make that purpose?Top tip: When it comes to customers, the buyer is not always the same as a user. For example, an executive may decide to buy a software for other people at his company to use, or a person buying an engagement ring is usually buying it for their partner. Think about how you will reach the buyer, as well as satisfy the user.

Competitor analysis

Unless you have an extremely niche or novel idea, it's unlikely that you've thought of something no one else ever has. As such, your business will have some competition – and that's OK.What matters is that you have a sound understanding of your competitors and know how to make sure that your business stands out.When getting the lowdown on your competitors, have a think about the following:
    What are their strengths and weaknesses? How much money do they make and what's their market share?Where do they operate? Does it matter if they're nearby?What do you do better than them?What unique service do you offer that they don't?What are their aims and objectives?How do they advertise?How will you react if a new competitor enters the market?
Top tip: visit your competitors with the mindset of a customer. What do you love about what they do? Did they solve your problem or leave you wanting more?

Marketing plan

Next, you need to show how you'll reach your target customers and persuade them to buy your products and services.Take a look at how your competitors reach their customers. Is there anything you could replicate, or do better? Make a list of the top three marketing channels you want to use for your business, and their key strengths and weaknesses. Include your marketing budget and any promotions you want to run.You'll also need to describe your products or services as well as your pricing strategy. How much will it cost you to sell your product and how does this influence your pricing?This is also a good place to list the key features of your product or service as well as what makes it unique in the market.

Operations plan

This section details how your business will work.Key things to include here are:
    Where you'll operate. For example, you might use a home office or external premises.The equipment and facilities you need to run your business.The staff you need to hire.Suppliers.Any legal or regulatory aspects, like insurance.
This section will vary from business to business, but it will give you and your readers a good outline of the expenses and requirements needed to run your business day-to-day.This is also where you'll put your key milestones that you want to achieve, both on the short-term and long-term. Write down where you expect the business to be in six months, a year, three years and five years.

Management structure

Your people are the key to making your business succeed. List out their responsibilities and how their skill sets will contribute to the business.Split this section into categories, such as sales and marketing, production and administration and group your management team in these sections. You can use the resumés of your management team to inspire your writing, but don't be tempted to copy-paste their entire CV. If anything, you'll run out of room!If you have any gaps in your management team while writing your business plan, that's OK. Just include what roles you need to hire. This is also a good prompt to include your plans for human resources. Explain how you plan to recruit new people going forward, and what you expect your staffing costs to be.

Financial plan

Now, you need to think like a capitalist and explicitly show how you'll make money from your business. This is the most critical section for investors and they'll need to be confident that they'll get a return on their investment (ROI).If you're starting a brand new business, then you'll need to show hard evidence alongside your financial projections. If it's an existing business, then you can use historic figures to power your future financial data.Be realistic with your projections. Even if you think you've got the next million pound idea, investors will feel more confident about realistic numbers backed up by evidence than pie-in-the-sky projections promising the world on a stick.Include your financial goals and where you expect the business to be financially over the next six months, year and three years.If you need to raise funding for your business be clear on exactly how much you need, but don't get greedy! Detail what you will spend the money on. The more information you include, the better lenders can determine if you're a sound investment.

Top tips for creating your business plan

    Keep it succinct – avoid flowery language and keep to the point. Try reading sections of your business plan aloud to a friend to see if they can follow your vision.Revisit and check on your goals. Your business plan isn't a static document and you should keep it up to date as things change.Make sure your goals can be tracked and measured. You can use the SMART goals acronym when writing your goals to make sure you're on the right path. SMART goals are, Specific, Measurable, Achievable, Relevant and Time-bound.Check, check and check again. Typos and spelling mistakes are a bad look. Double and triple check your business plan before sending it out, or have a friend proof read it for you.Know your competitors. Be honest about what makes them better than you. Talk about what makes you better as well, but don't bad mouth them.Tailor your business plan for your reader. You may want to edit your pitch if your reader is a potential partner or investor.

Summary

Starting a business plan can feel overwhelming, but it doesn't have to be a big chore. By writing an effective business plan you can not only win over key partners and investors, but also crystallise your own thinking and get your business out of your brain and into reality.Using the sections detailed in this article and our free template, you'll be able to structure your business plan, present a clear, concise plan to your readers and get set for the exciting stage of launching and running your business. Good luck!
Daniel Hogan
Daniel HoganCOO & Co-Founder

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Business Plan Template

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