What should a business plan include?
If you’re in the process of starting your own business, you may have been advised to draw up a business plan - but what is this and what does it look like?
What is a business plan?
As the name suggests, a business plan is a method of planning out what your business will become going forward. This includes looking at what type of business you’re looking to build, what actions you’ll need to take to get there and what your brand will stand for. Whether you’re setting up an estate agency or becoming a wholesale trader, it’s likely you’ll need a business plan.
Often, business plans are used at the funding stage, acting as a document that succinctly explains your business’ unique selling points, structure and aims to potential investors. However, it can also be advantageous on an internal level as an exercise to help you figure it all out before you start involving third parties.
Business plans also function as a starting point to come back to when you start thinking about branding, marketing and your business’ image in the public sphere. Think of it as a useful resource to help you, your employees and third parties understand exactly what your business is all about.
What to include in a business plan
Ideally, your business plan should be tailored to suit the needs of your business. No two businesses look exactly the same, so no two business plans should either. However, there are a number of sections every business owner should consider including to make the most of their business plan.
1. Cover page
Cover pages are sometimes overlooked because of their simplicity, but don’t fall into the trap of thinking they aren’t useful. Whatever your business specialises in, it’s important to have contact details in a prominent position so that investors or potential collaborators know exactly how to contact you.
2. Executive summary
Think of your executive summary as an elevator pitch - this is where you outline your business goals, objectives and projected successes. If you’re looking for investment, this is the ideal place to mention how much financial support you’re looking for. Don’t go into too much depth - you’ve got the rest of the document to get down into the nitty gritty details.
3. Company overview
Now you can start going into more detail about your business. In this section, you should explain where you’re based, when your business was first formed and the type of legal entity your business is classified as. This is also a good opportunity to discuss any previous achievements your business has made, such as awards, accreditations or endorsements, and outline your business insurance coverage.
4. Industry analysis
The title of this section is self-explanatory - it’s where you provide an overview of the industry you’re competing in. You should talk about the size of the market and note any trends or fluctuations your analysis has picked up.
5. Customer analysis
Here, you should identify your ideal customers. Who are they? What needs do they have that you’re fulfilling? Be specific when it comes to the psychographic and demographic make-up of your customer base. You could even include buyer personas and ideal customer profiles to help illustrate your point here.
6. Competitive analysis
This is where you look at your competitors and how your business aims to compete with them. You should identify specific competitors and assess their strengths and weaknesses as well as noting how saturated the market is for your niche. If there’s a gap in the market that your business fills, now is the time to explain how that will give you a competitive advantage. Perform a SWOT analysis - look at strengths, weaknesses, opportunities and threats.
7. Marketing plan
In this section, you should explain how your business will actually interact with consumers. You should include details of your brand image, your products and/or services, as well as which media you intend to use to promote content to new customers. It’s also a good idea to detail how your customers will buy from you - in store, online, over the phone, in the post or a mixture of multiple options.
8. Operations plan
Your operations plan should be focused on what actually needs to happen on a day-to-day basis within your business. This could include things like manufacturing products, completing services, producing content or sending out marketing materials. It’s important to specify what a successful day would look like, as well as setting goals for the next few years.
9. Management team
You don’t have to mention everyone you have on the payroll, but including a section on your key managerial employees can help to prove your business is set up for success. Highlight their accomplishments and qualifications - and don’t be afraid to admit to recruitment gaps you’re working to fill.
10. Financial plan
This is possibly the most important part of your business plan in the eyes of investors because it details how you’re going to spend their money and how you’re going to earn profits. You’ll want to outline the assumptions powering your financial projections and make it clear how much revenue you expect to generate, as well as including information about how any funding will be used to do that.
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