A business plan is a document which captures how you expect your business will grow, according to a large number of factors such as funding, how the market behaves, the people involved in the business, and – of course – how successful you are at selling your product or service.
Some people don’t use business plans at all, or may view a business plan as a document you produce before you start your new business, or something you will only ever need to secure a business loan in the future.
However, not only can a business plan help you focus on your task ahead, but it is also a living document, which you can use to establish how well you are doing, and how closely reality matches your initial expectations.
Also, you will need a business plan if you ever want to secure investment in your business (from business angels, or even friends and family), and certainly if you want to borrow from a bank or other financial institution.
A successful business plan will pay particular attention to cash flow management (to make sure the business continues to function on an ongoing basis), and will document who will do what, and when in order to make the business succeed.
How should you structure your business plan?
Although there are no firm ‘rules’ to writing your business plan, just as there is no rule to say that you have to use a plan at all, there are some industry standards for putting together a business plan.
Here are things things you should include in your business plan:
1. The Executive Summary
This important section summarises the rest of your plan. This is what potential investors, or lenders will look at to gain an initial insight into how you intend to run your business. Rather like recruiters who have a pile of CVs to sift through, you should make this section short, punchy, and to the point. It should be written to impress.
2. Description of your business
You should use this section to outline what your business wants to achieve. What products or services you are going to offer, and which parts of the market you intend to sell to. You should explain who you are, and the background to the business and its management team.
3. Marketing your product or service
Explain more about your product or service, how you expect to market your business, what competition you expect to face, information on your target customers and, and how you will measure success.
You need to describe how you, and your team intend to take your plans and implement them in reality. You should provide timescales, which personnel are responsible, and any contingency plans you have in place.
5. Who are you?
Describe more about you, and your executive team. What skills do you each have, and how will they be applied to the business.
A critical part of your plan will describe how you expect to fund the business at the start, and on an ongoing basis. This should include key accounting documents such as a balance sheet, profit and loss, business ratios, etc.
This brief section should contain some optimistic closing paragraphs on why you expect the business will to succeed.
This is a very high level summary of what information you should include in your business plan. ByteStart’s Complete 8-part guide to writing a business plan explains in more detail how to lay out your business plan and the level of information you need to have in each section.
Our guides on How to write a business plan for you, not the bank? and Business plans for business angels offer specific guidance if your plan is for either of these audiences, while Online tools and resources to help you write an effective business plan will be useful to anyone working on a business plan.