A business plan is a key ingredient for entrepreneurs and seasoned business owners alike. It should define the core of your business, from operations, to finances, to future projections. Doing it right could be the difference between business triumph and failure.
Writing a business plan should take time – it’s important to cover all the key elements in an efficient and accurate way, without delving into too much detail or overwhelming the reader.
Here, we outline the key elements that should be included in your plan to help you get writing and start on your path to success in business.
What is a business plan?
Your business plan should sum up your entire company in a single document, including your current plans and operations as well as the projected growth over the next few years.
It should be a formal document that outlines and explains important points, such as:
- Your business idea and how it fits into the wider market.
- Your goals and how you’ll achieve them.
- Details surrounding costs, sales, and financial forecasts.
Writing a business plan is not a quick process – to do it right will take time. However, the final product shouldn’t be too in-depth, either.
Your document should explain the key factors, so that whoever is reading it can understand the overarching plans and operations of your business. Anything you want to expand on in more detail can be included in the appendix.
Why is a business plan important?
A proper business plan will:
- Help you understand and shape your company
By creating a business plan, you can take all the ideas, dreams, and plans you have for your business and put them onto the page. You will have a physical document that you can refer to, change, and use to reflect on your progress.
- Get people to take you and your brand seriously
It’s important to have a well-written plan that you can show to investors, potential business partners, and prospective staff members.
It will allow them to understand your vision and your overall plan for getting there, and leave a professional and organised impression. You might need to adjust your plan, depending on who you are presenting it to and what your aim is.
- Help you to plan for the future
Plotting out the details of your business will allow you to get a feel for its potential rate of growth, so you can set goals and targets, allowing you to plan for the future. It should also allow you to spot gaps or potential areas of weakness, so you can problem solve and work out what you need to do to overcome any setbacks.
How to write a business plan: What should it include?
What your business plan includes will depend on your sector and your individual way of working. It should have a professional presentation with an organised structure. Use bullet points, charts, spreadsheets, and other visual aids where necessary, and make sure to cover the key areas.
- Executive summary
This section is the first thing that potential investors, staff, or customers will see. It should be a brief but complete summary of your business. Outline:
- The way your business works.
- Where it fits into the wider marketplace.
- What your goals are and how you will achieve them.
- How the financial structure will work.
- Any other vital points that define the character of your business.
It’s also an opportunity to explain what you want and why your business is worth the time and money of the current or potential stakeholder who’s reading it. Write this section after you’ve completed all the others, as you’ll have a concrete idea of which important points to include.
- Business description
Explain the product or service you plan to sell, including:
- What it will be.
- How it will work.
- What your USP is. (Read this guide to find out how to create a USP for your business.)
- Where your products or services fit into the wider market.
- If and how you plan to develop your offering.
Depending on who you are presenting your plan to, you also might want to include a brief bio, where you outline:
- Who you are.
- Why you want to start this business.
- Why you’ll be good at it.
Make sure to outline any previous work experience or training that makes you qualified, and consider attaching your CV in the appendix.
- The marketplace
In this section, you should introduce the reader to the wider marketplace that your business will be active within.
- Target audience
Outline everything you possibly can about your potential customers. Be specific, using research and consumer profiles to give a detailed summary of who they are, what they want, where they live, when they shop, and why they will choose your business.
- Market research
Present an overview of the current state of the market you’re trying to enter, based on stats and facts, as well as real feedback from potential customers. Include things like current sales figures, consumer attitudes, what direction the market is going, and how your business fits in to all of this.
- Competitor analysis
Give a rundown of your closest competitors, including how they conduct operations, what works well, what weaknesses they have, and why you think your business can stand up against theirs.
- Strategy and operations
In this section, you should explain how your business will run day-to-day, as well as outline how you plan to promote yourself to grow your customer base.
- Operations: Explain what’s involved in the actual running of your business, including information about logistical things such as:
- Where it will be located.
- Any equipment or services you might need to outsource (including things like IT, delivery).
- How you will take and process payments.
- Any legal and insurance-related restrictions.
- Your staffing structure.
- Marketing strategy: Give an overview of how plan to promote yourself, including details about:
- Traditional advertising (e.g. TV, radio, exhibitions).
- Digital marketing (e.g. social media).
- Your website.
- How you plan to conduct sales.
This section can feel complex, and so it can be a good idea to ask for help from a financial expert, or use resources the government provides specifically for entrepreneurs and business owners. Read about how to find the best accountant for your small business, for more advice.
When explaining your business finances, you should be honest, realistic, and transparent. This section should give the reader a comprehensive overview of the money side of things, without bombarding them with too much detail.
- Costs and pricing
Outline how much your services will cost you to provide, including all business costs such as marketing, equipment, rent, utilities, and admin. Based on this, explain what price you will charge customers and what your expected profit margins are.
- Financial forecast
Give an overview of how many sales and how much money you think you will make on a monthly basis, taking into account variables such as seasons and events that will impact your business. Outline your reasoning for higher or lower predictions.
This section shows how much money is moving in and out on a monthly basis, including any incomings (like sales or business loans), and outgoings (the cost of running your business). It should help you to showcase a predicted breakeven point (how many sales you need to make to cover the overall cost of running your business).
- SWOT analysis
This section gives you an opportunity to outline any strengths, weaknesses, opportunities, and threats (SWOT) that your business may face. It’s a chance to identify issues that could arise or changes that could impact your success, and offer solutions for how you can address them.
A good business plan is like the ultimate manual for running and growing your business, helping you to visualise your current plans and future goals. Explore our guides for more in-depth advice about how to make your business a success and compare card machines to find the payment solution that suits your needs.