How to write a business plan

What is a business plan and why do I need one?

A business plan provides an outline of your business; detailing its goals and how you plan to achieve them.

It’s an essential tool for all types of business, whether a sole trader or limited company, a start-up or an established company.

It will include detailed information on your objectives, marketing and sales, strategies and financial predictions. This makes it perfect for clarifying your business ideas and ensuring they make sense, setting goals, measuring your progress, working out what financing you need and spotting any potential problems that may arise.

If you’re looking to secure investment or a bank loan, then you will need to provide a concise business plan for them to work out the risks and whether they think you’re worth investing in.

It will also be of interest to potential employees, suppliers and customers.

How to write a business plan

Not all business plans need to look exactly the same, however, they usually all have a similar structure and elements.

Basic information about your business
Give a brief history of your business; when it started trading and its progress so far and include all of the basic key information, such as your name, business name etc.

Executive summary
This summarises all the key points you want to make – you want to start this with the purpose of your business plan.

Some people find this easier to write after they’ve completed the rest of the plan and gone through all of their ideas and information.

Products and/or services
Describe what it is that you are providing and what makes your product or service different to others; your USP (Unique Selling Point), if you predict any disadvantages, how you plan to tackle them and what improvements you plan to make.

Your market and competition
This is fairly self-explanatory and requires quite a bit of research into your field and any competitors. Be sure not to waffle on too much in this section.

Marketing and sales strategy
Look at discussing where you position your product or service in the market and make sure to highlight the benefits.

You’ll also need to look at your pricing policy, as well as how you go about promoting your product/service and the cost-efficiency of these methods.

Financials
This essentially wants to explain everything you’ve already discussed, but in the form of numbers, so you’ll need to include information such as:

• Total sales figures
• The gross margin for each of the sales components (i.e. sales of different types of products)
• An up-to-date balance sheet with a profit and loss account
• Financial forecasts, preferably for the next three or more years

The dos and don’ts of writing a business plan

Here are a few general tips on how to present your business plan:

• Include all of the relevant information but at the same ensure that it’s not ridiculously long, and keep it clear, concise and easy to read.
• Make it look professional – add a cover, include a numbered contents section and check for any spelling or grammatical errors!
• Try and avoid too much technical jargon.
• Be realistic! There’s no point lying or presenting over-optimistic information as this could lead to increased overheads and cash flow issues in the future. Plus, any potential financiers or business partners could very well work out that there are holes in the plan which could create mistrust.
• Include evidence to back up what you’re saying – this could be put together in an appendix.

We hope you found this page helpful. If you’d like to sign up or need any further information, please give us a call on 01442 795 100 or you can email sophie.lewis@dolanaccountancy.com. There’s also the option to contact us via live chat.