Your business plan is a strategy for your success. Having a realistic and well-developed business plan is critical to getting your business off the ground and making money. If you’re unsure about what business plans are for or how to write one, this guide is for you.
- Why planning is important
- How to write a business plan
- How to use your business plan
- How to enhance your business plan
Whether you’re setting up as a sole trader or a limited company, businesses of all sizes and strengths need a plan. Read on to find out how to make a plan for your business and how Countingup can make it even better.
Why planning is important
Having a business plan is essential because it is the central point for everything in your business.
As you’re setting up and looking to expand, there’s a lot to think about. Having a single space for everything, such as your budget, suppliers and customer demographics, means that you can get an overview of everything going on. This record helps you make a more detailed growth plan and reduces the likelihood of forgetting important business information.
Planning also allows you to use your experience to understand where your business can improve or protect itself long-term.
How to write a business plan
Your business plan is a summary of your business idea, the market and your budget. To make sure you include the key details, follow these four steps:
1. Market research
Market research involves gathering information about your industry, whether from actual research or your experience/expertise in the area.
Consider any competitors your business has (big and small) and find out why they operate the way they do. For example, are there restrictions on manufacturing costs that you also have to work with? From this research, identify how your business is different and where it offers better value.
Market research is also about your customers. Find out more about what sort of people buy your products already; who might purchase them if you market them differently? Where can they be found for advertising: online or via local flyers? Are there any upcoming trends you can capitalise on to differentiate yourself?
2. Conduct a ‘SWOT’ analysis
Following on from your research, categorise your findings into four domains: Strengths, Weaknesses, Opportunities, and Threats. The first two denote internal aspects of your business, while the latter two contextualise external factors the business is subject to. For example:
- Strength: your brand is well developed and your online presence is strong
- Weakness: your business might have a lot of debt and a low sales record
- Opportunity: your supply chain is robust to changes or delays
- Threat: customer interest is seasonal and weather-dependent
Using this breakdown, you can identify areas where you can mitigate and develop to protect yourself or expand your business.
Your budget is a crucial element of any business that acts as both a track record and forecast for your trading. A regularly updated and accurate budget should be able to tell you if you’re making a profit and by how much. A well informed and realistic budget should specify achievable growth.
If you’re starting a business, you’ll need to budget for any set-up costs like equipment, furniture or stock. If you have some existing funding, record any expenses in your budget as necessary. If your set-up costs are higher (and you need to borrow money), having a breakdown of where your budget is going helps investors and lenders have confidence in how you’ll make money.
Generally, your budget should cover things like:
- Workspace furniture and equipment
- Broadband and phone services to accommodate your business’ needs
- Business cards or initial marketing materials
- A dedicated website and email address
- Software subscriptions or updates
We have dedicated guides on budgeting so you can learn more about why budgeting is important to small businesses and how to budget for starting a business.
The last element to include in a business plan is the executive summary. This is (usually) a single-page summary outlining the most important information. Make it short but convincing for investors to read.
How to use your business plan
Your business plan is a versatile tool for many different settings.
Ultimately, it will change – this is normal. Factors like missed targets or a changing business environment will mean that plans have to be adapted. However, having this record allows you to keep on top of everything and make sure your trading is as organised and efficient as it can be.
You should regularly set time aside to consider whether you’re meeting the goals and growth targets outlined in your plan. As time passes, consider increasing the target and adapting your plan to meet it. If you miss it, consider lowering the target or changing your operations to achieve it instead.
Even if your business plan is realistic and achievable at every level, the world around you will change. Therefore, you should update your Threats and Weaknesses to reflect the evolving environment and shape your business has. Between government changes to legislation or trade agreements, new technological developments or other new start-ups entering your industry, business is dynamic and you need to be on your toes.
Additionally, your business plan should be used to make your marketing strategy and investment plans effective. Use your customer demographics and industry knowledge to develop and create new marketing strategies and growth plans.
Finally, your business plan can be used to secure investment and expand your business using the executive summary. This summary should convince readers of your value and potential and grant you access to investment opportunities – so make sure it’s good.
Make it easier to run your business with Countingup
We can’t write your entire business plan for you, but we can handle the budget part.
The Countingup app is the two in one business current account and accounting software, helping thousands of UK small business owners save time by automating their financial admin .
With instant invoicing, automatic expense categorisation and receipt capture reminders, you can rest assured your books are always accurate. You can also take advantage of our real-time profit and loss reporting feature so you can easily understand your business at any time.
If you want to have complete confidence in your bookkeeping and focus on growing your business, find out more here and sign up for free today.