Knowing how to write a business plan is an essential building block for growing your company. To write a business plan, you will need to answer key questions about what your business is, what its goals are and how you’ll achieve this, as well as describing your customers and your financial projections. You can then create a clear document which outlines how you plan to grow the business.
In this guide, we’ll look at the essentials of how to write a business plan, including a simple basic business plan template you can customise to your requirements.
What is a business plan?
A business plan is a document which provides a detailed explanation of your company and how you plan to grow it. It typically contains the following:
- Description of the business
- Business goals
- Marketing and sales strategies
- Financial forecasts
A business plan is essential if you’re asking the bank for a loan, but it is also useful for you to track the progress of your company and clarify your thinking. A business plan should evolve as your company grows and be updated on a regular basis.
The essential elements that make a business successful are largely the same in any industry – you need a unique selling point, a good grasp of your target market and sensible financial forecasts. You might sell air conditioning in Abuja or run a nightclub in Nairobi, but a good business plan will contain the same elements. At the same time, your business plan will also be unique to your firm and target market.
How is a business plan different to a business proposal?
A business plan is a document which describes your company, the kind of work you do and how you plan to grow. In contrast, a business proposal is a document which you present to a client to show how you will complete a specific project for them, why your company is best placed to do it, and a quote for your services.
Five simple steps for writing a business plan
Here’s how to write an effective business plan in six simple steps:
- Define your unique selling point
Describe exactly what it is that makes your business special with a USP. Is it your location? Is it something only you can do? Is it an ingenious idea which no one has ever thought of before?
- Market research
Most businesses need to do some form of market research before launching. Work out if anyone would be interested in your idea and how much they might be willing to pay for it.
- Competitor research
Who are your competitors and how are they positioning themselves? Whether you do research online or visit the neighbourhood where you plan to open a store to assess the local competition, you need to work out how you will make yourself stand out.
Estimate your costs and profits
Sit down with a calculator and estimate all your expected costs – from rent to salaries to electricity to tax to equipment. Then, work out what you’re going to have to charge if you want to turn a profit.
- Set yourself targets
Without a target, you’ve got nothing to aim for. List out 3-5 specific goals you have for the business in the short term, whether it’s related to profit, growing staff or opening new stores. You should also have longer term targets too.
- Turn this information into a ‘living’ document
Once you have compiled this information, you now need to turn it into a ‘living’ document which you can update as the business evolves.
For more tips and advice on growing your company, read our business resources blog.
Business plan template
Here is a simple business plan template to follow when you begin writing your plan:
- Cover page
Include the name of your business, its address, logo, website and contact info
- Executive summary – short paragraph
This should be a short description outlining what the document is and what it contains.
- Aim of the business – half a page
Describe what the purpose of the business is. What do you do or sell, who does it help and how?
- The opportunity – half a page
Drawing on your market and competitor research, describe the opportunity you have spotted, who you think would buy your product or service and how you can offer something different.
- Business growth plans – one page
Explain how you expect to market and sell your products or services.
- Financial goals and planning
Describe your business goals and how you plan to achieve them. Be transparent and realistic here – it will help you avoid disappointment, make sure you spend money wisely and will also make investors trust you.
Include any extra financial data, results from your market research and other relevant information.