How to write a business plan

Business Advisory

November 8, 2018

Every business needs a business plan and writing a plan provides a structured way in which to think about your business.

Having a current, living business plan is just as important for established businesses as it is for new enterprises.

The key sections of a business plan include:

Business description. What are its products or services? Where is it located? What are the staffing requirements? What is the business structure?
Marketing and sales plan. Define the market. Who are your customers? Why? Who are your competitors? What advantages or disadvantages do you offer? What is your pricing policy? How will you promote your business and what sales methods will your use?
Your future. What is your vision and how big do you want to grow? What are your business goals and key milestones?
Management and personnel. What is your management structure? What specialist skills do you need? Are they best provided by employees or contractors?
Finance. How will the business be funded? What sales will you achieve, or need to achieve to cover your costs? What are your likely costs? What will the profit and loss statements for the next three years look like? When will you break even?
SWOT analysis. What are the businesses’ strengths and weaknesses? And yours, personally? What opportunities have you identified, and what are the threats that could negatively impact your business?

Important points to remember

Be realistic. In the excitement of starting up a new business it’s easy to be overly optimistic. The financial projections for a new business will need to be based on a number of assumptions. Detail what these are and why they are realistic.
Decide who the business plan is for. Is it for internal use only, or for potential external lenders or investors? A professionally presented business plan can, of course, serve several purposes.
Seek qualified input. This can come from a trusted mentor, business-owning friends or family members, or an accountant. Ask for reality checks.
Communicate the plan. Senior managers in your organisation will likely have been involved in writing the plan and will have primary responsibility for implementing it. However, relevant goals, direction and attitudes need to be communicated to your entire team if the plan is to fully benefit the business.
Review regularly. All too often, the daily demands of a business see business plans consigned to forgotten corners of computer hard drives or to bottom drawers. If this happens, all the effort put into creating the plan generates little benefit. One way to counter this is to make a periodic review of the business plan an agenda item at management meetings.