1 min read
Whether you’re using it to seek financial assistance or simply to help guide your business towards your goals, writing a thorough business plan is essential for businesses of any size. Through writing a business plan, you’ll be able to better identify your strengths and weaknesses and define the steps you’ll need to take to grow as a business.
If you’re just starting a new business, writing a business plan will help you understand the market and allow you to establish clear, realistic goals and processes.
How to write a business plan
The following business plan template summarizes the key sections of a business plan and what they should include:
Your title page should include the following information:
Table of Contents
Always include a table of contents in a business plan.
The executive summary offers an overview of the business and outlines the organization’s primary mission. It will introduce the business, its owners, and the main product or service you offer.
It helps to write this section after you’ve written the rest of your business plan, as this is a summary of what you’ll describe in detail elsewhere, but the executive statement should always be placed in the first section of the business plan.
Use your executive summary to describe your target market and identify your competition.
Discuss what you will do to maintain market share and what will set you apart from competitors.
Briefly detail your financial targets and projections and, if necessary, make note of any financing requirements.
In this section you’ll discuss the wider industry you’re competing within. Use this section to describe the current state of the industry, using real data and statistics to guide your approach. Consider trends, audience demographics, sociopolitical and cultural significance, and economic standing.
Outline how and why your business fits into the industry and go into further detail about your competition. While your Executive Summary should be concise, you can go into a little more detail here describing what specific areas within the market you’ll target, and unique or improved services you can bring to the table that your competition lacks.
In this section, you’ll provide data and figures to reinforce the demand for your product or service in the market.
You’ll need to provide estimates for the size of the overall market and predict how much you’ll be able to sell to your target market, how likely repeat purchases will be, and how the market might be impacted by volatile conditions.
This section should include detailed sales figures from your competition, describing your competitors’ estimated annual revenue, number of employees, and the price and quality of their product or service. Use a table to lay this information out.
Sales and Marketing
In this section you’ll describe your planned approach to sales and marketing.
First, describe your product or service and how it will benefit your customers. Discuss your pricing strategy, and why the pricing you’ve chosen makes sense for the product and market. Detail the costs of goods sold and the markup you’ll utilize, and compare your pricing to competitors.
Estimate your profitability, and consider using a breakeven analysis to do so.
Describe how you’ll distribute and market your product. Note where you’ll sell your product – whether wholesale, retail, online or otherwise. Explore your plans for packaging, shipping, payment methods, fulfilment, and so on.
List the various forms of marketing and media you’ll use to advertise your product and what promotional methods you’ll use, like discounts, free trials, or loyalty programs, for example.
State your estimated budget for marketing and advertising.
Ownership and Structure
Use this section to describe the management structure of your organization. State the legal status of your business; is it a corporation, partnership, LLP, or otherwise?
Introduce key members of the organization, their roles and responsibilities, and their pay. Describe the balance of ownership among key members, and include succinct details of the management team’s past experience.
Describe any external resources you’ll work with, like consultants or accountants, for example.
Estimate the size of your team and whether you’ll hire employees, independent contractors, or both. Give an idea of the costs involved (salaries, benefits, etc.) with populating your team.
Your operating plan will detail how your business will operate.
Will you require physical office space? What equipment and facilities will you need? Think about timing and how quickly you can manufacture your product, as well as factors like maintenance, utilities, and overheads.
If you will have a physical location, describe any permits or approvals involved, and outline any potential mortgage or rental costs.
The financial plan should demonstrate the profitability of your business by exhibiting your projected revenues, expenses and profits with stats to back it up.
If you’re already in operation, you should provide existing paperwork, and if you’re a new business, you’ll need to provide forecasts or estimations of the following:
It helps to underestimate your revenues and overestimate your expenses; doing so helps you plan and budget for the worst case scenario, and it allows more flexibility when it comes to unexpected expenses.
You want your financial statement to show your business’ potential to grow.
Finally, use the appendix to include any further information that will support the statements and intentions you’ve outlined in your business plan. This might include resumés for key employees, mortgage or lease documents, market research, credit histories, and references, among other useful documentation.
So, there you have it – writing a business plan should be a time-intensive task, but it doesn’t have to be complicated, provided you know what you’re doing.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.