Your business plan step-by-step

Summary

A business plan is a critical document laying out your company's objectives, strategies, and performance measures over the next few years. It explains your product/service, target customers, competitor analysis, sales and marketing plans, operations, and detailed financial projections. An executive summary briefly overviews the key points to impress readers. Regularly update the living document to track progress towards goals and pivot when necessary. Use appendices to provide supporting documents like market research and financials to strengthen your case to banks and investors.

Takeaways

• 😀 A business plan is like a roadmap, setting goals and strategies to achieve them
• 📝 It shows your business's objectives, how you'll achieve them, and helps measure progress
• 📈 Include info on your products/services, target markets, competitors, marketing, operations
• 💰 Financial section covers cash flow, profit/loss - be realistic!
• 🔍 Do market research and include a SWOT and PEST analysis
• 👥 Explain your staff, systems, compliance requirements and policies
• 🎯 Have a clear unique selling proposition to stand out from competitors
• ✏️ The executive summary comes last, tailor it to your audience
• 📎 Append supporting documents like research, orders, marketing materials
• 📆 Update the plan regularly and use it to track progress and make adjustments

Q & A

What are the key sections that should be included in a business plan?

The key sections that should be included in a business plan are: introduction/company overview, markets/competitors, sales/marketing strategy, operations, financial information, and executive summary.

What is a SWOT analysis and PEST analysis, and where would they be included in a business plan?

A SWOT analysis examines the strengths, weaknesses, opportunities and threats relevant to a business. A PEST analysis looks at political, economic, social and technological factors that may impact a business. These analyses would be included in the markets/competitors section.

What should be included in the sales and marketing strategy section of a business plan?

The sales and marketing strategy section should include details on the target market, how the business plans to promote itself and reach customers, the pricing strategy, a detailed sales forecast with timelines and budgets, and plans for tracking results and measuring performance.

What type of information should be covered in the operations section of the business plan?

The operations section should explain location, premises, equipment, production/storage/delivery of products/services, suppliers and distribution strategies, staff and HR considerations, systems and procedures, IT support, future operational plans.

Why is the financial information section important and what should it include?

The financial information section is important to demonstrate the business has sufficient cash flow to cover costs and make a profit. It should include a month-by-month cash flow forecast for year 1 and profit/loss statements for years 2-3, with realistic forecasts for both income and expenses.

What is the purpose of the executive summary and when should it be written?

The executive summary provides a high-level overview of the key points of the business plan. It should be written last, once all other sections are completed, to summarize the entire plan.

What types of documents should be included in the appendix?

The appendix should include supporting documents like market research, customer letters/orders, examples of previous work, price lists, legal documents, policies and procedures, job specifications, and marketing material examples.

Why is it important for a business plan to be a working document rather than something created and then forgotten?

The business plan serves as an ongoing roadmap for the business's direction and goals. Referring to and updating it regularly allows progress to be tracked and adjustments made as needed to keep the business on course.

What analyses should be included to demonstrate an understanding of the market environment?

Including PEST and SWOT analyses demonstrates an understanding of the wider market environment - PEST covers political, economic, social and technological factors, while SWOT examines internal strengths and weaknesses as well as external opportunities and threats.

How can risks and contingencies be accounted for in the financial forecasts?

Including realistic forecasts with contingency plans for higher/lower than expected sales demonstrates financial prudence - explaining how variances would impact figures and what mitigating actions would be taken.