Business Plan – Definition, Template and How to Write

A business plan provides a roadmap for an organisation or business and outlines business goals and information regarding steps that will be taken to attain those goals. Business plan encompasses a written plan from a financial, marketing, and operational perspective. The plan also provides information about the organisation’s team that will be working towards attaining the goal. From an organisations perspective, a business plan helps to assess the achievability of a new business idea in an unbiased, and practical way. The plan helps to provide answers to the following questions:

• Financial perspective – Can the business make profit?
• Marketing perspective – What is the available and addressable market? Who are the key competitors?
• Management perspective – Skill-set of the management team and their ability to grow the business

Drafting a business plan describes the business and covers business intents, sales plan, strategies, marketing and financial forecasts. It helps to set goals, clarify business ideas, measure progress, and identify problems that circumference the business, no matter how small or large business it is. Also, a business plan is required if a business intends to secure investment or loan from a bank

Additionally, a business plan encompasses an operating plan that provides the guidelines to assist while running a business and enhance the likelihood of success. An operating plan helps to:

• Recognise opportunities and circumvent mistakes
• Develop an administrative, production, and marketing plans
• Budget forecast and projections to illustrate financial outcomes

Download Free Business Plan Template

There are various templates available out of which the one which is the simplest to understand and implement is the one that is the most beneficial. Our business experts have all the pre-requisite qualities that makes business plans simple and easy to implement. Here our experts have already defined a template which is applicable for small and large businesses alike. A good template can get your thoughts organized and provide a basic structure on how to plan your business.

Purpose of Business plan

A Business plan aims to set out the action plan and strategy of a business. Key highlights include:

• It usually covers the strategy for a period of one to three years, or in some cases for a long-term period (a typical case with UK Councils and NHS Trusts)
• The plan elucidates the goals and how they will be achieved
• By involving employees while drafting a Business plan helps to build a efficacious, committed team
• A written plan helps to focus and develop ideas – prioritisation helps to save precious time
• A drafted Business plan acts as a benchmark for the business performance
• The Business plan can also be useful to attract new senior management; raise bank or equity finance; positioning a business for sale; attracting business partners, such as agents and distributors

Content of Business plan

A Business plan must focus on what readers needs to know and make sure the plan has no spelling errors. Detailed business plans will encompass detailed market research data; financial projections and assumptions; product or service description or technical specifications. Few important things to cover in a Business plan: start with an executive summary, include a contents page – each page with section numbering, use charts if required. Carefully review the plan and read it from a target reader's perspective. The plan must access risks and measures to avoid any uncertainties

Business and products details

Give details about the history of the organisation or business – when was it incorporated and the progress timeline since incorporation. Also, provide the ownership details and the present ownership structure of the business. A business should also consider the taxes that are involved while setting up a firm and on how to save taxes. The Business plan should describe products and services it details in and what makes it different from its competitors. It can even describe any strategic features of the business. For example, if the industry is controlled by a few large organisations or face any major technological issues such as threat from legacy software etc.

Key Elements of a Business Plan

The elements of a business plan template include

• Executive Summary
• Company Description
• Market Analysis
• Product and/or Service
• Marketing & Sales Pla
• Financial Plan
• Appendix

Executive Summary of Business Plan

An executive summary provides readers a high-level understanding of the business and the market before exploring it in detail (an executive summary is usually put together once the entire business plan is drawn out). An executive summary encompasses:

• Overview: Brief explanation of what the company does, where is it headquartered/located, what the company sells, and who it sells its products and services to
• Company Profile: Brief explanation of the company’s structure, ownership details and owners bios (work experience, skills, key responsibilities)
• Financial reflections: Describe how the business finances are structured and what are the financial projections
• Products or Services: Details about what the company has to offer
• Market: Explanation about the market share and forecast of sales

Company Description

In a company description, elaborate the information provided in the summary section – company operations, business structure, mission statement, ownership details, location details, and details about marketplace and products or services. Also note that a business should also keep in mind the various rules and regulations implemented by HMRC for businesses and sole traders alike.

Market Analysis

While testing a business idea, it is imperative to make sure whether the plan is feasible in the market or not. This is important because the market will eventually decide how fruitful the business will be – What is the target marketplace, and why would users be interested in purchasing a particular product or service. Let’s understand this with an example. Assume a business is selling beddings – here it is vital to understand the target audience. In this case, the business will need to focus on a smaller group initially, let’s say youngsters from middle-income families. Try finding answers to questions such as – How many youngsters from middle-income group are there in the country? What kind of bedding will they usually need? Is the market growing or stagnant? Analysis from both secondary sources and primary research will need to be includes here. The business will also have to present a competitive analysis, wherein, it should be able to answer questions such as – number of other bedding companies that exist in the market and what is their market share; summary of strengths and weaknesses of potential competitors, along with areas that provide the business a competitive advantage

Product and Services

Provide details about products or services the company offers and how can they be of advantage to its customers/potential customers. Provide the strength of your products and services as compared to the ones already available in the market. Talk about the competitive landscape: What other companies are providing and how is the solution different from the ones available. Then, go into details as to how it can help to solve user issues

Management and Operations

This section will outline the business' organisation and management structure – describe the key role and responsibilities of senior executives. This will include brief bios of board members and highlight their appropriate experience and education background – a sound management speaks a lot about the business growth and its future plans

Market and Sales Business Plan

Describe the comprehensive marketing and sales strategy that will be used to sell the products and services. Before a business works out its marketing and sales plan, the business will have to perform a complete market analysis. Important questions include: How to penetrate the market? How to further grow the business? Details about distribution channels? How to communicate with customers? Provision for customer feedback and after sales service. Additionally, answer questions such as what's the sales strategy? Sales team composition and how to grow the sales team in the future? What will be the average price per sale?

Business Financial Plan

To conclude, outline the financial plan in detail, including the set-up cost, financial projections, and request for additional funding if the business is pitching to investors. Example of a profit and loss statement is stated below:

Particulars	Mar’15	Mar’16	Mar’17
Income
Sales
Sale of goods/services	£ -	£ -	£ -
Sundry Income (e.g. Commission earned, franchise fees etc.)	£ -	£ -	£ -
Total Sales	£ -	£ -	£ -
Less Discounts/Commissions
Sales Discounts given	£ -	£ -	£ -
Sales Commissions paid	£ -	£ -	£ -
Total Discounts/ Commissions	£ -	£ -	£ -
Total Net Income	£ -	£ -	£ -
Cost of Sales
Opening Stock	£ -	£ -	£ -
Stock Purchased	£ -	£ -	£ -
	£ -	£ -	£ -
Less Closing Stock	£ -	£ -	£ -
Total Cost of Sales	£ -	£ -	£ -
Gross Profit	£ -	£ -	£ -
Expenses
Bank charges	£ -	£ -	£ -
Credit card commission	£ -	£ -	£ -
Consultant fees	£ -	£ -	£ -
Office Supplies	£ -	£ -	£ -
License fees	£ -	£ -	£ -
Business insurance	£ -	£ -	£ -
Total General & Administrative	£ -	£ -	£ -
Marketing & Promotional
Advertising	£ -	£ -	£ -
Promotion - General	£ -	£ -	£ -
Promotion - Other	£ -	£ -	£ -
Total Marketing & Promotional	£ -	£ -	£ -
Operating Expenses
Newspapers & magazines	£ -	£ -	£ -
Parking/Taxis/Tolls	£ -	£ -	£ -
Entertainment/Meals	£ -	£ -	£ -
Travel/Accomodation	£ -	£ -	£ -
Laundry/dry cleaning	£ -	£ -	£ -
Cleaning & cleaning products	£ -	£ -	£ -
Sundry supplies	£ -	£ -	£ -
Equipment hire	£ -	£ -	£ -
Total Operating Expenses	£ -	£ -	£ -
Motor Vehicle Expenses
Fuel	£ -	£ -	£ -
Vehicle service costs	£ -	£ -	£ -
Tyres & other replacement costs	£ -	£ -	£ -
Insurance	£ -	£ -	£ -
Registrations	£ -	£ -	£ -
Total Motor Vehicle Expenses	£ -	£ -	£ -
Website Expenses
Domain name registration	£ -	£ -	£ -
Hosting expenses	£ -	£ -	£ -
Total Website Expenses	£ -	£ -	£ -
Employment Expenses
Permanent	£ -	£ -	£ -
Salaries/Wages	£ -	£ -	£ -
PAYE	£ -	£ -	£ -
Superannuation	£ -	£ -	£ -
Other - Employee Benefits	£ -	£ -	£ -
Recruitment costs	£ -	£ -	£ -
Total Perm. Employment Expenses	£ -	£ -	£ -
Casual
Salaries/Wages	£ -	£ -	£ -
PAYE	£ -	£ -	£ -
Other - Employee Benefits	£ -	£ -	£ -
Recruitment costs	£ -	£ -	£ -
Total Casual Employment Expenses	£ -	£ -	£ -
Workcover Insurance	£ -	£ -	£ -
Total Employment Expenses	£ -	£ -	£ -
Occupancy Costs
Electricity/Gas	£ -	£ -	£ -
Telephones	£ -	£ -	£ -
Property Insurance	£ -	£ -	£ -
Rates	£ -	£ -	£ -
Rent	£ -	£ -	£ -
Repair & maintenance	£ -	£ -	£ -
Waste removal	£ -	£ -	£ -
Water	£ -	£ -	£ -
Total Occupancy Costs	£ -	£ -	£ -
Other Expenses
Total Other Expenses	£ -	£ -	£ -
Total Expenses	£ -	£ -	£ -
Month Net Profit / (Loss)	£ -	£ -	£ -
Total Year to Date Net Profit / (Loss)	£ -	£ -	£ -

Key points while drafting a Business plan

Be Concise

It’s imperative that prospective investors can comprehend what the business is all about by taking a quick glimpse at the plan – the business overview should cover all the key details along with financial highlights. Executive summary should encompass the business overview, financial highlights, business strength and opportunity areas, and key strategic initiatives – use a simple language all through

Be Specific

Writing a Business plan that is specific is as essential as writing a concise plan. The details provided in a Business plan will help to understand the plan will be actually delivered

Have Knowledge About the Market

The success of a business depends a lot on the business target audience. While preparing a Business plan, make sure that it clearly states what the target market is – who will be purchasing the products or services and what is the competitive landscape (how many other companies are dealing with similar products)

Understanding the Finances

It is important to understand the revenue model of the business. If the business isn’t sure about its earning, it will become difficult to sustain the business in the long run. Make proper use of the business plan – the plan will act as an incredible source of information when it comes to seeking investments and loans