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It’s important to know how to write a business plan, because it helps you answer questions about your business and recognise potential obstacles before you set it up properly. Our guide explains more, plus you can download a free business plan template too.
While not all new businesses start out by writing a business plan, for many it’s an important step. It acts as your guiding document, helping you establish and grow your business, and it has a life well beyond just setting up or applying for finance.
But how to make a business plan, exactly? The first thing to know is that it doesn’t have to be detailed – and in fact being too long and descriptive can put your readers off. You should be able to explain your idea clearly, structuring your plan into sections including:
Our article below explains how to write a business plan. Why not download your free business plan template, which you can fill in as you work your way through our step-by-step guide?
Keep in mind that a business plan can take several weeks to write. It’s worth doing it properly – let us know how you get on, and if you have any questions.Download
Starting a business is exciting. You’re bursting with so many ideas, you might be tempted to rush your plan to get to the fun stuff.
But a business plan isn’t something you write down when you’re setting up and never look at again. You’ll refer back to it often, making sure you’re hitting your goals and getting the best from the brilliant ideas you come up with at the beginning.
And if you’re looking for funding, your business plan needs to convince people to back your idea.
So it’s not an overstatement to call your business plan the ‘bible’ you’ll use to help establish your company.
And while business plans come in different formats, most of them include the same core sections. If you want to read an example business plan before you get stuck in, find out where to get one below.
Before you start writing, it might be useful to get some inspiration from other business plans.
Once you’ve got an idea of how other businesses have written their business plan, it’s time to start writing your own.
The executive summary goes at the beginning of your business plan. As it’s a snapshot of your plan, it’s often best to write it last.
This section is common in many business documents, from client reports to business proposals for new projects.
It’s designed to hook readers with your idea, giving an overview of your plan – including what makes you different, how you’re going to market your ideas, and how much money you expect to make (and spend).
As the executive summary is at the beginning of the document, it’s important to make a good impression on your readers. We’ve got a guide on how to write an executive summary, with a quick six-paragraph plan you can use to structure yours effectively.
This is where you jump in and start talking about your idea. This section should include:
Here you explain industry trends and the competitors you’re up against. It’s where you include the market research you’ve carried out.
This research can be quantitative (based on measurable data and statistics), qualitative (based on gathering individual experiences and opinions), or ideally both. This section should answer:
SWOT stands for strengths, weaknesses, opportunities and threats. This is a very important part of your business plan, because it helps you drill down into your idea. You usually format a SWOT analysis in a grid on one page – four squares, one for each section. Then you make notes in each square.
Formatting the SWOT analysis in a grid helps you see how the different elements of your idea interact. For example:
Completing SWOT charts for your competitors too should help you see how to win business from them.
Now that you’ve done some analysis, in this section you can explain how you’re actually going to run your business.
Here you’ll include a number of sub-sections:
Here you detail the numbers – especially important if you’re looking for investment. The financials need to be realistic, accurate and watertight.
Here’s what to include, presented in raw figures and charts:
The detail you need here depends on what stage you’re at with your business, as well as the size of your business. You might want to ask for expert help and advice on crunching the forecasts.
While the business plan itself shouldn’t be long and complicated, there might be information you choose not to include in the body of the plan itself that people should refer to.
This can include graphs, tables and notes. You can signpost the relevant appendices people should look at throughout the body of the business plan.
When you’re using business plan templates, keep the following in mind.
Know your audience. Remember who you’re writing for – is the business plan primarily for your own use, or are you looking for a loan, or even equity investment? Keeping your audience in mind will help you stay on track.
Keep it concise. Keep your plan snappy. While you don’t want to miss out crucial detail, you should also bear in mind people’s attention spans. Don’t turn in a 100-page plan.
Keep it simple. It’s likely your plan will be seen by people who don’t have intimate knowledge of your industry, so you need to make sure that it’s written in language that’s accessible to people without specialist experience.
Don’t forget the presentation. Tables, graphs and charts can help you get information across better than blocks of text. It’s also worth thinking about how to ‘pitch’ your plan to investors, potentially in a presentation that gives the toplines from your plan.
It’s important to look at business insurance when you’re starting out, because it helps protect you if anything goes wrong.
Most businesses should consider public liability insurance, which covers you if a member of the public gets ill or injured and blames your business.
Read more articles about starting your business:
Sam has more than 10 years of experience in writing for financial services. He specialises in illuminating complicated topics, from IR35 to ISAs, and identifying emerging trends that audiences want to know about. Sam spent five years at Simply Business, where he was Senior Copywriter.
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