How to write a business plan

Checklist

  1. 1 Clarify the purpose of the plan, and whether it will need to 'sell' your business to outsiders such as potential investors.
  2. 2 Review your SWOT analysis of the business (SWOT: strengths, weaknesses, opportunities, threats); consider including a summary with the plan.
  3. 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. 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. 5 Outline the main competing products and suppliers, how they compare with yours, and why you will be able to compete effectively.
  6. 6 Explain how you market your product - its market position, pricing, promotion, and distribution channels - and how you sell.
  7. 7 Set out the structure and key skills of your management and employees; assess their performance and motivation.
  8. 8 Analyse your operations - premises, production facilities, management information systems - and any plans for improvements.
  9. 9 Provide historical financial information; highlight key figures (such as sales, key operating and financial ratios) and trends, and explain anything unusual.
  10. 10 Provide latest financials - an up-to-date balance sheet and profit and loss and cashflow statements.
  11. 11 Prepare financial forecasts for the next few years; explain key assumptions and any contingency plans covering key areas of uncertainty.
  12. 12 Make sure that the plan is short and focused; move any detailed information (eg market research, extensive financial information) to an appendix.
  13. 13 Write a one- or two-page executive summary at the beginning of the plan.
  14. 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.

Cardinal rules

Do:

  • 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

Don't:

  • waffle or include unnecessary detail
  • base your plan on over-optimistic assumptions
  • ignore competitive threats and weaknesses