How to write a business plan

A business plan is an indispensable document every small business owner should invest time into developing. If you want tips on how to write a business plan, we’ve created this quick guide to give you everything you need to craft your own.

If you want to skip straight to writing your own business plan, we’ve included a free and downloadable business plan at the end of this article.

The rest of this article on writing a business plan will acquaint you with the how and why of this important small business task.

What is a business plan?

A business plan is a formal and structured document. It outlines your business intentions, financial targets, marketing plans, and more.

A small business plan will generally consist of the following sections:

• A general outline or description of your business:
  This will include your business details, business structure, NZBN, contact details, website etc.
• An executive summary:

An executive summary is a one-page outline of your small business intentions – essentially a ‘cover letter’ for your busines plan.

• Team and management:

A snapshot of your team structure, employees, positions, and key responsibilities. This is usually laid out in a visual ‘tree’ format.

• Products and services:

An overview of your intended deliverables. Include a description of your intended products and services that will form the backbone of your sales and cashflow. This section will also include pricing, demand, distribution, and unique selling position.

• Operations

Details of your operational intentions. This section will include equipment, premises, technology, suppliers, stock, insurance, and legal considerations.

• Market analysis

A research-based analysis of your target market, demographics, market size. Plus, a breakdown of the competitive landscape and a SWOT analysis (strengths, weaknesses, opportunities, and threats).

• Marketing plan
  How you intend to promote your deliverables and lead consumers down a path to sales. This section will include what your website looks like and your digital marketing and social media strategies.
• Sales plan and business finances:
  A debrief on your sales targets, pricing, profitability, cashflow, budget, funding, and balance sheets.
• Future forecast
  A declaration of your intentions for growth and future profitability. This section will include a mission statement, opportunities for growth and a multi-year roadmap.

Why write a business plan?

Writing a busines plan is important for both internal and external use.

Internally, it’s a guiding document that formalises and articulates how your business will function and the goals and specifics of your intended business journey.

Externally, a small business plan is indispensable for gaining financing or investment. It’s also a central tool when consulting with accountants or business advisors who you enlist to support your pathway to financial success.

By scripting a business plan, you can outline your business processes, keep track of financial goals, formalise your sales and marketing plans and provide a skeleton for you to refer to when building and growing your business in earnest.

To not write a busines plan means you run the risk of early failure through a lack of preparation and structure. You may be missing key elements for success or overlooking weak points in your business proposal.

Starting a business

Starting a business from scratch is no easy feat. The most recognised and intelligent way to go about this is to first create your business plan so you can assess the reality of bringing your offerings to market and understanding where your blind spots are.

Creating a business plan should be one of (if not the) first step you take before investing yourself in your venture. Let’s undertake a quick run through these first steps in starting your business and the key elements of a business plan.

Market research

First up, you need to spend time researching the market.

You’ll have to pinpoint and describe your target customer, how many there are, and analyse your competitors.

By doing so you’ll not only be able to direct your sales and marketing efforts effectively, but you’ll also understand what you need to offer to beat your competition.

If you discover that there’s not a lot of money flowing through your intended market coupled with high levels of competition, you may wish to change course to avoid a steep uphill battle or target a different corner of the market.

Marketing plan

You will build your marketing plan from the results of your market and target customer research. If you performed this diligently, a streamlined marketing plan will be much more easily formulated.

Without a go-to-market plan, your marketing activity will be reflexive and unstructured, leading to missed opportunity and wasted resources.

You need to have a thorough understanding of digital marketing, branding, websites, advertising, promotional activity, unique selling proposition, reporting, software, and associated budget.

Business finances

There’s not much chance of busines success without incorporating your financing intentions into your business plan.

How you intend to fund your business and the amounts of capital required are intrinsic considerations which you’ll need to flesh out professionally before courting financing options.

If you’re approaching a bank, financial institution, or investors, you’ll need a business plan that includes:

• your business budgets
• equipment, stock and set up costs
• a cashflow forecast
• profitability chances and your ability to service debt
• any assets, capital, or collateral you may have.

You must present these aspects alongside the other elements of your business plan, such as market analysis, sales and marketing plans, and risk assessment to gain financing for your fledgling small business.

Tailor your business plan to your audience

Before we get to the business plan template, you should understand your intended audience.

Do you intend to present this version for financing options? Is it for a business advisor? Is it for internal use such as employees or managers?

Different stakeholders will value certain aspects of your business plan over others, so be sure to have multiple versions tailored for different purposes.