Business planning and writing a business plan are two processes that seems are over-debated, over-analysed and over-complicated. But they’re actually quite simple.
Creating a business plan should be a rewarding experience, not a daunting one. Your business plan should clarify and prove to you - before anyone else - what your business is and what it will achieve. Crucially, it will map how to get there.
What should a business plan include?
There is no one ‘ideal’ way to write a business plan. There is key information a business plan should include, however.
- An executive summary
- A short description of the business
- Your marketing research and sales strategy
- Details of your staff structure / management team
- Information about how the business operates
- Financial forecasts
How long should a business plan be?
If you're preparing a business plan for external consumption - say a bank or investor - you should think in terms of 20-40 pages of information. If the plan is for internal use only - for instance, to structure and focus for your management team - you don't have to go into as much detail and 5-10 pages can be enough.
Tips for a readable business plan
To be a useful document that helps your business thrive, it should be:
- clear – straightforward language, sensible structure
- concise – short enough to keep people's attention
- based on fact and evidence – to provide a firm foundation for decision making
A good plan can be skim-read in about 15 minutes. To help the reader, format your document to make it easy to read:
- use bullet points and clear headings to break up dense text
- have plenty of white space around the margins
- use tables, graphs and pictures of products
Don't want to start from scratch? Find out about using a business plan template.
Business plan contents
1. The executive summary
This is a synopsis of your entire business plan. Its role is to highlight the key points that you go into in greater depth later in the document.
It’s sometimes the only section a potential backer will read - so it has to be enticing and easy to digest, whilst also providing a good understanding of the business.
Typically, the executive summary should cover a couple of sheets of A4 paper / 800-1200 words.
2. Description of the business
This section should cover the basics of the business:
- where it has come from
- where it stands today
- where you plan to take it
Include details of when you plan to start trading or (if already started) when trading began.
You should also provide details of the company current legal structure:
Describe your product and your unique selling points. USPs. In other words why people will want to buy what you're selling. Outline how you plan to develop your product or grow the range you have to offer.
Provide details of any patents, trademarks or design rights you own. If intellectual property - whether in the form of clever branding or unique technology is important to the success of the business - explain how this can be defended.
3. Market research and sales strategy
Provide details of your competitors - direct and indirect.
- Who are they?
- What is their market share?
- What niche will your product or service fill in the existing market?
Our articles on competitor analysis and SWOT analysis can help you identify who you’re up against.
Equally important, you should be clear about your customers.
- If you're a B2C company – that means you’re selling direct to individual members of the public - you should provide details of the target group. Details like age, gender, income, interests, etc.
- In the B2B market – that means you sell to other businesses - you should detail the kind of company you are planning to reach.
In both cases, the plan should explain why your target customers will buy from you. Provide some information about the size of the market and the market share you plan to achieve. We've got lots of articles on market research for startups.
4. Your management team and employees
Investors and financial backers will want to know if you have the people and skills in place to deliver your goals. Provide information on your managers and all members of staff.
- What’s their experience?
- What skills do they bring to the business?
- What role will they be fulfilling?
Include external advisers such as lawyers and accountants as this will also provide assurance that you have the necessary skills in place.
Set out how much time and money each person will contribute and what you plan to pay in terms of salaries. This will help both you and external parties assess whether you have the right cost base in terms of personnel.
5. Your operations
Include details of your current or planned location, costs and why you chose it.
Provide details of the facilities you require to produce your product or service. This should include both in-house facilities and any aspects of the business that have been outsourced.
Management information and control systems are also an important element in the operational mix.
You should explain what systems you plan to use - for instance, stock control, quality control - across the business.
6. Your financial forecast
This is the crucial section. It explains everything you've previously said about the business, but in numbers.
You'll need to include forecasts covering sales, profit and loss and cash flow.
Typically, these forecasts will cover three to five years and cover:
- where the business is now, financially
- where it will be in the short term future
- where you see it going
You’ll need to consider and answer questions like:
- How quickly will sales grow?
- When is the business expected to turn a profit?
- What is the cash flow outlook?
You should include information on:
- the capital you require
- all sources of revenue
- any securities (investment assets) you hold
- outstanding loans
This section can be tricky for new businesses because the figures are all educated guesswork, based on the demand and price point suggested by your market research.
You need a clear idea of your target audience. Once you know that, you can work out how big the market is and how much your customers are spending on similar products at the moment. Factor in your own unique sales proposition and you can put a figure on likely sales.
This does, however, just produce an estimate. Try to ensure your financial projections are realistic. Don’t include over-optimistic / unrealistic figures. And always include details of the research you've carried out to arrive at your forecasts.
Find out more about:
Can I use my business plan to get a startup loan?
Yes, that’s certainly one of the benefits of writing a business plan. You can show it to lenders and investors when you apply for a business loan or startup loan.
Transmit Startups are the UK’s leading delivery partner for Government-backed Start Up Loans, which are designed for anyone thinking of starting a business, or running one that is less than two years old.
With Transmit Startups, you can borrow £500 to £25,000. See how much you can borrow with our startup loan calculator.
Is there a business plan template for startups?
Transmit Startups have a business plan template for people considering starting a business. It will walk you through the process step-by-step, with useful questions and helpful tips. It is specifically designed for people who are at the very start of their business planning journey and covers all of the essentials to get you thinking strategically about your business. Download our startup business plan template
Think your business idea is brilliant but need some money to get started? Find out more about Government-backed Start Up Loans with Transmit Startups.