Your business plan is the document that will take you from idea to execution. You’ll likely depend on your business plan to organise your thoughts, strategise for success and stay focused. A business plan is also handy in getting funding for your business.
If you want to write a winning business plan, read this comprehensive guide. We’re sharing step-by-step tips on how to write a business plan.
In this article:
Why do you need a business plan?
- Create your executive summary
- Describe your company
- Introduce your team
- State your company goals
- Detail your values and mission statement
- List your products or services
- Do market research
- Create your marketing and sales plan
- Set financial projections
- Add an appendix
Tips for writing your small business plan
What is a business plan?
A business plan is a document that details your strategy for your business’ future. The business plan includes an overview of your business, its goals and your marketing strategy. The document will also include financial forecasting.
Why do you need a business plan?
Writing a business plan requires you to outline your business goals and the strategies to achieve them. This is an essential step in turning your idea into something real, into an actual business. For more on this topic, check out this guide on starting a business in Australia - you can use it to learn more about the entire process of having a new business.
Your business plan helps you create something tangible from your ideas.
By putting ideas on paper, you’re giving yourself the opportunity to properly think through your plan and assess its likely success.
Outside of your personal reasons for writing a business plan, you will need this document if you need to convince banks or investors that your business is legitimate and likely to return a profit.
Investors will expect a well-thought-out business plan demonstrating market awareness and financial planning.
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How to write a business plan
If you’re ready to get stuck in and write your business plan, the next steps will greatly help. You want to be thorough at every step, especially if you expect to share the plan with potential stakeholders.
But remember, this is your business; your plan must be true to you first and foremost.
1. Create your executive summary
Your executive summary is essentially your first impression to investors. In a few sentences, it needs to grab readers’ attention and explain what you/your business does, so they’re compelled to read on.
Many people wait to write this summary until after they’ve completed the other sections.
It may be hard to know what you’re going to say until you’ve said it.
2. Describe your company
Your business plan will begin with a description of your company:
- What you do
- Who you do it for
- Exactly what problem you are solving
Think about your elevator pitch as you are writing your company description. Be very clear here.
You’re unlikely to be the first person to create a company solving a particular problem for your audience, so try and detail what it is that makes your company stand out.
3. Introduce your team
If you have any particularly credible or expert team members, be sure to introduce them in your business plan. Write a short bio for each person that highlights their key credentials and how they will contribute to your new business.
4. State your company’s goals
Every business needs goals and deciding exactly what yours are might not be so obvious.
Yes, your company needs to make a profit, but your goals need to be broken down into more measurable and actionable steps.
Start with your desired business goals (number of products sold over a certain period, etc). Then decide what you need to achieve to meet each goal. For example:
- How many sales do you need to make for your company to meet your projected revenue goal?
- What marketing tactics will your business use to hit your business goals?
Some businesses include goals that address the greater good. For example, you may choose to set a goal for reaching net-zero carbon targets by a particular year. Or you could commit to using 75% locally sourced materials in your products.
Related: Craft a killer mission statement in 4 steps
5. Detail your values and mission statement
Of course, your business is here to make money and provide the lifestyle that you want.
When writing a business plan, it’s easy to get wrapped up in the data and the money.
But your why is the lifeblood of your business.
Take some time to create a page that digs into the meaningful element of your business.
- What larger problem are you trying to solve?
- What values will you hold the business to?
- What does this business mean to you?
This section should be very useful for you as a business owner because this is what will keep you going.
It can also be used to help you onboard a team later and to define your target market.
6. List your products or services
When you write your business plan, you want to explain your products or services.
Within this section, write:
- What your products or services are
- How they help your customers
- How they stand out in the marketplace
For product-based businesses, include:
- A brief introduction to your costs (you’ll expand on them later in your plan)
- Where your products are sourced
- The quantity of products you currently own
7. Do market research
Every business must conduct market research. You need to think both about your local market and, if you’re starting an online business, the digital market. You may have different competitors in each marketplace.
It’s crucial that you do market research that shows a deep understanding of your competitors and your place among them.
Your market research will help you determine if your business venture is justified. It can also act as support for your proposition — which is especially useful when pitching to investors.
The market research section of your business plan will help you see where the gaps are between your business and competitors, as well as where you hold an advantage.
It will form the foundation of your sales and marketing plan as you strategise to close the gap on your competitors.
8. Create your marketing and sales plan
Your marketing and sales plan will generally be built from your competitor research. You can use competitive data to get a feel for what’s working. However, it’s important to remember that your brand and your audience are unique.
You are better off doing less better than trying to do more poorly.
Your marketing plan should support your overall business goals and provide clear strategies to help you achieve them.
You are not necessarily expected to know the ins and outs of marketing, so if you need support here, you can get it.
You may need to reach out to your marketing team or other professionals who can help you decipher what your business needs to succeed.
9. Set financial projections
When it comes down to it, finances determine a successful business from an unsuccessful one.
If you’re seeking investment, your financial forecast is everything. One thing that investors need to know very clearly is the financial estimations and performance of your business over time.
In your projection, plan for:
- Sales
- Expenses (including wages)
- The pricing of your products and/or services
- A contingency plan for unexpected finance needs.
10. Add an appendix
It’s not enough to simply write a business plan; every claim you make within it needs to be well-documented. So, include an appendix.
Your appendix is a compilation of supporting documentation and/or evidence. Items that might be included in your appendix include:
- Resumes of your key team members
- Documentation of your market research and analysis. If your plan summarises findings, include your marketing research and data
- Legal documents, such as incorporation papers, patents or trademarks
- Marketing materials, such as websites, brochures or social campaigns
- Customer testimonials or case studies. New businesses might not have these, but if you have conducted focus groups, you can include those findings
- Product prototypes or lab tests if you have them
- Any other relevant supporting materials that were referenced in your business plan
Related: How to use a free website builder to make a website
Business plan format
There are three types of business plans:
- Traditional
- Lean
- Not-for-profit
While this article focuses primarily on the most common business plan format — the traditional plan — it helps to know what might be involved in the other formats.
Traditional
The traditional format provides a detailed business overview and is useful for presenting to investors or lenders.
In a traditional plan, you will likely write more than you would in a lean plan.
Some businesses might opt for a traditional plan and then create a lean version for specific uses.
Lean
The lean business plan format is, as you would expect, a simplified version of a traditional business plan. The lean business plan format includes the most critical aspects of the business.
If you’re writing a lean business plan and you want to pitch to investors, then you must include key sections like market analysis, revenue forecasts, etc.
Not-for-profit
The not-for-profit business plan is similar to the traditional business plan but includes items that are required to run a not-for-profit organisation.
For example, if you were writing a not-for-profit business plan, you would likely include all elements of the traditional plan, plus fundraising and development, governance and financials.
You may also have research from the local area you’re serving to help with your market analysis section.
Your aim will be to prove that there’s a public need for your not-for-profit organisation.
Tips for writing your small business plan
Before you start writing your small business plan, read through these tips — some might not be so obvious.
Use a business plan template
Business plans are not new, so why not start with a tried and tested template? There’s plenty of space to turn the template into something unique that feels like yours. Using a template avoids providing too much information to readers and it provides structure.
Check out this free business plan template you can download and customise in a cinch.
Write for yourself (not just investors)
Your business plan is yours. Writing it is your chance to organise your thoughts and understand what the business means to you.
Upon completion, you should feel satisfied with your roadmap to success.
Of course, consider your audience and investors when writing it and give them everything they need, but don’t forget to satisfy your own intent.
Remember the business plan formats; you can always start with a traditional plan for yourself and then provide your investors with the lean version.
Demonstrate what makes you unique
You’re likely to be joining a busy marketplace, and you want to go in ready to disrupt and stand out.
- Clearly articulate what sets your business apart from your competition (e.g., quality of service, product uniqueness).
- Explain why customers should choose your products or services (e.g., x% of proceeds go to a worthy cause).
Use concrete data and examples
Writing your business plan takes your dreams and helps you turn them into something tangible and achievable.
You should be able to support your ideas with concrete data and real-world examples. You need to prove to yourself — and investors — that your business is viable.
Be realistic with your projections
Because writing your business plan is about creating something that’s achievable, you must be realistic with your projections.
While being optimistic is exciting — and you can still be privately optimistic — you must be realistic in your plan. So, keep your projections modest.
Realistic projects are better for you mentally, too. If you’re more likely to achieve your goals, you’re less likely to get overwhelmed.
Plus, goals that are not realistic will heap pressure on you and your team, and that’s the last thing a new business needs.
Business plan Frequently Asked Questions
Here are your most asked questions, answered.
How do I write a simple business plan?
You will write a simple business plan if you keep focused and aim to be thorough but concise.
Cover all the important aspects — give special attention to your executive summary — and don’t over-plan.
Focus on shorter time frames and be realistic about what can be done.
Rely on research and data to help shape your projections.
Can I write a business plan myself?
Yes, you can write a business plan yourself. That said, if your plan covers areas of business where you’re not so strong, you might need support. Feel free to consult with financial and legal professionals.
How long should a business plan be?
Your business plan will be as long as it needs to be, but the aim is to create something thorough yet concise. As a guide, aim for around 15 to 20 pages.
How long should it take to write a business plan?
Writing your business plan will probably take a few days, but you’ll need to do a lot of research behind the scenes.
You will also need to step away from your plan after you write it, and then return and revise it to ensure that it’s accurate and error-free.
A business plan should take you three months to research, write and review from beginning to end.
