George Harrison
Hannah Nemeth
So you’ve come up with an idea for a business and made the courageous decision to strike out on your own. You’ll get to work on your terms, become your own boss, and hopefully turn a profit by doing something you’re passionate and knowledgeable about.
Perhaps you can already picture this future business clearly in your head, but before you’ve committed it to text in the form of a business plan, your business idea is just that: an idea.
And those rosy visions may not necessarily reflect the harsh realities of a competitive market, the difficult choices that lie ahead and the challenge of navigating an unpredictable economy.
A business plan won’t guarantee that you can weather the inevitable hardships that come with running your own business, but it will allow you to sense-check your assumptions and form contingencies that will give you the best chance of success.
As long as you can provide a realistic picture of where your business is heading, and you can back it up with facts and figures, your business plan can serve as a useful roadmap for the months and years ahead.
We know that writing a business plan may sound daunting, which is why we’ve also developed a simple new business checklist to help you wrap your head around all the steps involved in getting a new venture off the ground.
But while our checklist is a great place to start, you may also need to develop a more formal business plan along the way. For example, if you plan to approach investors or go to a bank in the hope of securing a business loan, there is every chance you’ll be asked to prove the clarity of your vision by presenting a business plan. For start-up businesses, this is even more likely.
Plus, by forcing yourself to think critically about the specifics of everything from your marketing strategy to your financial projections, you can spot limitations and areas for improvement in your business before they become a problem.
While businesses can succeed without a plan, a 2016 study found that founders who take the time to write a business plan are 16% more likely to end up with a viable business than those who press ahead without planning.
Below, you’ll find our business plan template, along with a brief guide to what information each section will require, and our top tips for filling it in.
Download our business plan template
To help your business journey run smoothly, we’ve come up with a handy checklist for you to download, which should take the guesswork out of starting your own business. From how to hone your business idea to sorting out your business finances, this guide will steer you through the first steps as you get your new business off the ground.
How to use our free business plan template
Our business plan template is broken down into eleven sections. Take your time to fill in each section to the best of your knowledge.
In some cases, you’ll just have to provide factual information about you and your business. Other sections will require you to conduct in-depth market research and make informed assumptions about your likely costs and takings.
These sections are inherently speculative, and that’s OK. As long as you can provide a realistic picture of where your business is heading, and back it up with facts and figures, your business plan can serve as a useful roadmap for the months and years ahead. It may also help to secure crucial start-up funding.
1. Executive summary
This is a concise overview of your entire plan, giving the reader a snapshot of what they can expect in each section.
Summarise all the most salient points, and aim to keep your summary to under 1,000 words or a couple of pages of text.
Although this will be the first thing a reader will see of your business plan, it’s a good idea to write this section last. Feel free to skip this step for now and come back to it at the end.
2. Your background
This section explains who you are and why you’re starting this business.
You should include your personal details, professional experience, and qualifications, as well as how you will plug any skill or knowledge gaps that will help you achieve your goals.
By explaining the relevance of your professional and personal background to the business idea, you’re demonstrating to investors that you’re a credible candidate for funding.
3. Products and services
Here, you need to explain exactly what product or services you’re bringing to market, any insurance or legal requirements you need to meet to do so, and your launch strategy.
Will you be launching new products at a later date? If so, write about your plans in this section.
4. Costs and pricing
Detail the cost of your products and service by unit, and work out your mark-up and profit.
This will help you to ensure the economics of your pricing strategy makes sense.
5. Market analysis
Describe in detail who your target customers are, their needs, and the size of the market.
6. Market research
Conduct, and explain:
- desk research (looking at industry challenges and opportunities)
- field research (customer questionnaires/market testing)
7. Marketing strategy
Determine which marketing channels you will use, justify why you’re choosing them and establish how much they will cost.
8. Competitor analysis
Identify your direct competitors (businesses offering the same products or services) and indirect competitors (businesses offering similar products or services) and conduct a SWOT analysis.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Thinking about things this way will help you align your hopes and plans for your business with the real-world environment in which you’ll be operating.
9. Operations and logistics
Explain how production and delivery will work at your business day-to-day. Think about the following, and for every relevant point, provide details relating to your business:
- suppliers
- payments
- premises
- equipment
- staffing
- insurance
10. Financial projections
This is perhaps the most complicated section. We’ve created a number of template tables for you to detail your sales and costs, your cash-flow forecast, and your personal survival budget.
- Sales assumptions: Your sales assumptions template allows you to estimate a year’s worth of sales and costs broken down by product and service type.
- Cash-flow forecast: Your cash-flow forecast is exclusively for business income (revenue) and expenditure (rent, wages, utilities). Your revenue estimates should be realistic and supportable. It’s wise to be conservative for your first few months of trading.
- Personal survival budget: Here you should include only your personal average monthly income minus costs and expenses. This proves to potential investors that you can meet your loan repayments. You can use personal bank statements to estimate your typical monthly incomings and outgoings.
11. Back-up plan
Things don’t always go according to plan. Here you need to break down your short and long-term proposal for meeting any outstanding debt repayments in the event that you experience financial hardship.
This can include quick ways to raise cash, savings or a support network you could draw upon, or a plan to renegotiate your payment terms with suppliers.
How do I write a business plan?
There is no one way to write a business plan, and the information you put into your plan doesn’t have to necessarily be set in stone.
When you write your business plan, bear in mind that it is a living document, liable to change as your plans and circumstances change.
If you’re struggling with writing a business plan, using a free business plan template, like the one you can download in this article, should make this task easier.
While you’re following the above steps, bear these additional tips in mind to make sure your business plan makes sense to you and to anyone else who reads it:
- Be concise… Keep your business plan relatively short by only including necessary information and being precise in your language. Not only will this make it easier to write but it will encourage you to be analytical. After all, it’s easy to dress up an empty idea in flowery language.
- … but be detailed. However, make sure to include the right level of detail about the things that matter, especially when it comes to financial forecasts and competitor analysis.
- Be realistic: It’s fine to dream big, but keep your expectations and projections achievable and grounded in evidence. You can always rework them if your circumstances change.
- Seek feedback: Find someone to read over your business plan whose opinion you value. Ideally, this should be someone who has experience in business, like a mentor.
What is a business plan?
A business plan is a document describing your business and setting out how you intend to achieve your business goals.
Business plans are a useful way to organise your idea in your own mind, and the process of writing a business plan may throw up problems and solutions which you wouldn’t have otherwise considered.
A business plan may also be needed to secure external funding, like a start up loan. In this case, presenting a business plan to a prospective lender shows that you have thought about your business idea and that you’re serious about making a success of it.
If you’re struggling to write a business plan, then our free, downloadable business plan template can help.
Image source: Getty Images
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