How to Write a Business Plan
Whether you are starting a new business, or growing an existing venture, a business plan is an essential tool on the road to success. A business plan sets out your business strategy, and helps you define the priorities of your business and prepare for the future. i It’s also an essential requirement for businesses looking to get financing from investors or a small business loan from a bank.iv In this article we explain what to include in your business plan and some tips for writing a great one.
What to include in your business plan
A business plan is a detailed document that covers your business’ goals, operating plan, marketing plan and financial position. Below you’ll find a list of sections that are usually included in a business plan. Remember your business is unique – so adapt the sections below to suit your business, and add any additional information that may be required by your industry and circumstances.
The business summary is a one-page overview of your entire plan, sometimes called a “plan on a page.” ii v It should capture all the essentials of your plan in a way that is easy to read and understand. It can help to write your business summary at the end when you have a good understanding of your plan as whole.
Business Mission, Vision, and Goalsv
This is the aspirational section of your business plan that outlines the purpose and direction of your business. It consists of three parts:
- Mission statement: A statement explaining the fundamental purpose of your business.
- Vision statement: A statement explaining where you want your business to head.
- Business goals: Concrete goals that outline what your business is planning to achieve, such as market expansion or building your customer base.
Your business description includes all the basic information about your business, such as its registration location and premises..ii But it should also include information about your business’ operating plan, such as staff, products and services, distribution and supply chain, and how you plan to deal with business risks.v
Market Analysis and Marketing Plan
This section usually consists of three elements.
- Market or Industry Analysis Any market research you have undertaken, as well as a general description of your industry’s size, trends, target market and customer profiles.ii
- Competitor Analysis: Your major competitors, how you differ from them, and how you plan to compete against them.v
- Marketing Plan: Your marketing plan, including your unique selling proposition and marketing goals, budget and promotional strategies.ii You may also wish to outline your customer service and retention strategy.v
Financial Strategy and Forecasts
In this section you should include your financial goals, and financial forecasts. This can include operating expenses forecasts, sales forecasts, cash flow forecasts and a profit and loss statement.v
If you’re trying to secure funding it is essential to make sure this section is polished and accurate.
Tips for Writing Your Business Plan
Do your research
To write your business plan, you’ll need a detailed knowledge of your business, your market, your customers and your competitors.iii
This research can help shape your goals and targets, and provide necessary details to lenders and investors. Make sure your information is current and accurate before you share your plan.
Determine the purpose of your plan before you write it
Before you get to work on your plan it is important to know what, and who, it is for.iv
A business plan written for staff of a growing business is going to look very different to a business plan for a start-up seeking funds from a bank. Think about who will be reading your plan, and what details and information they might expect to see, and create your plan with this in mind.
Invest in presentation
Your business plan is a vital business document that will be read both by staff within your business, and the outside world. It’s worth investing the effort to make it look and read like a professional document, so your business can put its best foot forward.iii Proof read your plan and make sure it is error free.
Use a template
Select and use a business plan template to make sure you don’t miss anything important. You can use this free template
Keep your plan up to date
As your business changes and grows, so too should your business plan. ii Keep improving and revising your business strategy to make sure your business continues to head in the right direction.
This article contains general information only about topics of general interest to small businesses and does not, nor does it purport to, provide financial product advice. Readers should make their own enquiries, which may include but not limited to the resources noted in this article, and to seek advice from the relevant professionals before making any decisions about the subject matter of this article. To the extent that there is financial product advice on this website, any such advice does not take into account your objectives, financial situation or needs. Terms, conditions, limits and exclusions apply. Before making a decision about a financial product please consider the relevant Product Disclosure Statement for that financial product.
i ,Business.gov.au, Why Do I Need a Business Plan?, accessed August 2018, https://www.business.gov.au/Info/Plan-and-Start/Develop-your-business-plans/Writing-a-Business-Plan/Why-do-I-need-a-business-plan
ii Business.gov.au, How to Write a Business Plan, accessed August 2018, https://www.business.gov.au/info/plan-and-start/develop-your-business-plans/writing-a-business-plan/how-to-write-a-business-plan
iii Business.gov.au, Tips for Preparing or Updating Your Plan, accessed August 2018, https://www.business.gov.au/Info/Plan-and-Start/Develop-your-business-plans/Writing-a-Business-Plan/Tips-for-preparing-or-updating-your-plan
iv John Rampton, Entrepreneur, 7 Steps to a Perfectly Written Business Plan, 2016, https://www.entrepreneur.com/article/281416
iv Small Business Development Corporation, A Guide to Using the Business Plan Template, accessed August 2018, https://www.smallbusiness.wa.gov.au/sites/default/files/A-guide-to-using-the-business-plan-template.PDF