How to write a business plan
- 1 Clarify the purpose of the plan, and whether it will need to 'sell' your business to outsiders such as potential investors.
- 2 Review your SWOT analysis of the business (SWOT: strengths, weaknesses, opportunities, threats); consider including a summary with the plan.
- 3 Begin the plan with background material on the history of the business, and an outline of your product or service and its USP(s).
- 4 Describe the market segments in which you compete, market trends and key drivers and the nature of any existing customers or key targets.
- 5 Outline the main competing products and suppliers, how they compare with yours, and why you will be able to compete effectively.
- 6 Explain how you market your product - its market position, pricing, promotion, and distribution channels - and how you sell.
- 7 Set out the structure and key skills of your management and employees; assess their performance and motivation.
- 8 Analyse your operations - premises, production facilities, management information systems - and any plans for improvements.
- 9 Provide historical financial information; highlight key figures (such as sales, key operating and financial ratios) and trends, and explain anything unusual.
- 10 Provide latest financials - an up-to-date balance sheet and profit and loss and cashflow statements.
- 11 Prepare financial forecasts for the next few years; explain key assumptions and any contingency plans covering key areas of uncertainty.
- 12 Make sure that the plan is short and focused; move any detailed information (eg market research, extensive financial information) to an appendix.
- 13 Write a one- or two-page executive summary at the beginning of the plan.
- 14 Read through the plan to ensure that it sets out a realistic strategy and action plan in a professional manner; ask advisers for their comments.
- clarify the purpose of your plan before you write it
- focus on the key information the reader will want
- highlight future plans as well as describing the current situation
- be realistic
- waffle or include unnecessary detail
- base your plan on over-optimistic assumptions
- ignore competitive threats and weaknesses