How to write a business plan for your UK business in 8 steps

by Maxine Bremner

Published • 14/12/2023 | Updated • 14/12/2023

Starting a business

How to write a business plan for your UK business in 8 steps

by Maxine Bremner

Published • 14/12/2023 | Updated • 14/12/2023

Starting a business

As an aspiring entrepreneur looking to launch a new business venture, you’re probably eager to take your new idea to market and start attracting potential customers as soon as possible.

However, once you’ve landed on your business idea and are dedicated to starting your own business, one of the most crucial things you can do in the early phases of your journey is to create a business plan.

Your business plan will provide a summary of your business’ short and long-term goals, the methods you’ll use to achieve them, and what the next few years will look like for the company.

Aside from giving you a clearer sense of direction and helping you flesh out your vision for the business, a business plan is central to proving a company’s feasibility to investors and securing the capital you need to get your business off the ground. 

Research by Harvard Business Review found that a business plan can make businesses “16% more likely to achieve viability than the otherwise identical non-planning entrepreneurs”. Naturally, you’ll want to give your new business every chance of survival in the early years, making the decision to begin your entrepreneurial journey with a business plan a no brainer.In this guide, we’ll cover how to write a business plan, what to include, and how to tailor each phase to the unique vision you have for your business.

Step 1: Write an executive summary

The executive summary of a business plan is its front-page overview. It exists for 2 main purposes:

  1. To provide a clear and concise summary of all the key points of the larger document.

  2. To grab the interest of potential investors or partners and encourage them to read on.

The exact kinds of information that should be included in your executive summary will vary from one situation to another.

If you’re writing your business plan for a software start-up, for example, your executive summary should be written mainly for the benefit of angel investors, venture capitalists, and banks who may want to invest in your company. 

If you’re writing a plan for an independent barber shop, on the other hand, your summary will have a much more internal focus, and should be written for the benefit of you and your upper management.

When writing to ultimately pitch your business plan to investors, your executive summary should generally include: 

  • An overview of the business opportunity: A summary explaining the business you’re hoping to develop and the need for such a business in the current market.

  • A mission statement: A description, in a few concise sentences, of your business’ purpose, philosophy, and guiding principles. 

  • An audience profile: A section explaining who your target market will be through detailed audience analysis.

  • Your business model: An outline of the products or services you’re going to be selling, along with the features and benefits that will make them appealing to your target audience.

  • Competitive analysis: A profile of the competition you’ll be facing, and the strategies you plan to use to gain a competitive advantage.

  • Owners and team: A profile of the owners of the business and any other staff on the team, with information about the kinds of unique expertise that they bring to the company.

  • Financial analysis: Your business’ financial plan for the years ahead, including business start-up cost breakdowns and projections for future profits.

  • Action plan: A roadmap showing how you’re going to take the business from the planning stages to launch.

Though no one can write the summary but you, here are some tips to make this section as effective as possible for readers:

Treat it like an elevator pitch

The purpose of your executive summary is to spark people’s interest and convince them that reading the following parts of your business plan will be worth their time.

Though it should hit certain key pieces of information, such as your product, your analysis of the market and competition and why there is a requirement, it should also be written to be brief and memorable, without zooming in too closely on any particular details.

Here’s an example elevator pitch for a fictional restaurant business called Blue Monkey:

Experience the captivating flavours of pan-Asian cuisine at Blue Monkey, a vibrant restaurant in the heart of Brighton. Our expertly crafted fusion dishes, inspired by the authentic culinary traditions of China, Japan, Thailand, Vietnam, and more, will be an adventure for the senses. With a stylish ambiance, extensive menu featuring vegetarian and gluten-free options, and a carefully curated beverage selection, Blue Monkey offers an unforgettable dining experience that blends tradition with innovation. Join us and indulge in the essence of pan-Asian cuisine, right here in Brighton.

Regardless of the particulars of the business, your executive summary should act as a brief and compelling story that can be summarised in just a few minutes with a potential investor.

Keep it as short as possible

Whether you’re opening a cafe or something that no one’s seen before, it can be easy for business owners to get carried away when writing their executive summary.

This is understandable, as you’re more than likely excited, enthusiastic and passionate about your business idea. However, when you’re trying to get investors on board, you need to prioritise the most salient points and communicate them as efficiently as possible.

The document isn’t meant to wow readers with your writing ability, so don’t fall into the trap of over-explaining or over-complicating things. 

Use short paragraphs, and plenty of subheadings, lists, and bullet points. These will help readers absorb the most important information quickly and easily.

List information by how important it is

Though there are certain components that everyone will expect to see in an executive summary (see list above), there’s no set order in which these should appear.

Once you’ve articulated the different elements of your summary, you’ll likely identify the most important pieces of information, and how you’d like them to be viewed. 

From there, you can structure the summary in a way so that the information you want to get the most attention leads, and gradually decrease the order of importance as the document goes on.

It’s essential to cut to the chase and grab your audience with the right information early on. Otherwise, your business plan might not do your idea justice, and get lost in the crowd of competition.

Step 2: Write a company description

The next phase in writing a business plan is creating your company description. 

Company descriptions serve a similar function to the executive summary, though they’re markedly different in form.

An executive summary is written as a short, simple breakdown of your business plan that can be given as a pitch in a few minutes. 

A business description, on the other hand, aims to provide a more detailed top-level view of the business, and a single place in your business plan which readers can use to understand the various facets of your business.

Here’s a example company description for a fictional barber shop, A Classic Clip to help you get inspired to create one for your own business:

Our barber shop, A Classic Clip, is a contemporary and stylish destination dedicated to providing top-notch grooming services for the modern gentleman. Located in the heart of Bristol, we aim to create an inviting and relaxed atmosphere where our clients can enjoy a personalised grooming experience that combines traditional barbering techniques with a modern touch.

At A Classic Clip, we understand that grooming is an essential part of a man's self-care routine. Our team of skilled and experienced barbers are passionate about their craft and dedicated to delivering exceptional service. From classic fades and precise beard trims to hot towel shaves and grooming consultations, we offer a comprehensive range of services tailored to the unique needs and preferences of each client.

We always strive to create a welcoming environment for our clients. Our barber shop is designed with a contemporary aesthetic, featuring stylish decor and modern amenities. With comfortable seating, complimentary beverages, and a friendly team, we strive to make every visit to A Classic Clip a memorable and enjoyable experience.

To reach our target market effectively, we will implement a comprehensive marketing strategy that includes social media campaigns, collaborations with local businesses, and targeted advertisements in lifestyle publications. We will also prioritise building strong relationships with our clients, leveraging their satisfaction through word-of-mouth referrals to expand our customer base.

As we grow, we plan to explore additional opportunities such as expanding our service offerings to include spa treatments, hosting grooming workshops, and even launching our own line of grooming products. We will continuously invest in training and development to ensure that our barbers stay up-to-date with the latest trends and techniques, maintaining our position as the go-to destination for men's grooming in the area.

Aside from giving you an additional way to pique investors’ interest and convince interested parties that your plan is worth their time, your business description can also make your overall business plan more easily navigable

The business description can act as a point of reference that readers can refer back to and contextualise the individual details of your plan.

As with your executive summary, there are several sections that interested parties will expect to see in your business description.

Business name

If you’re already incorporated, the business name you use in your company description should match the official name registered with the government through Companies House.

Business goals

This section should lay out exactly what you’re trying to achieve as a business. 

The goals you list here should cover your vision for the long-term and short-term future of your business, and include specific, measurable targets that can be used to benchmark your business’ progress after launching.

For example, rather than saying you want to ‘expand brand awareness and find new suppliers’, you might want to list a goal as ‘improving footfall by 15% and forming partnerships with 2 new local suppliers in the next financial year’.

Target audience

Your company description must also demonstrate an intimate knowledge and understanding of the customers you’re going to be selling to.

The section on your target audience should list the core demographic data of your target audience, such as their age group, income bands, and interests. 

It should also leverage any market research you’ve carried out to show that you’ve dug deeper into your target audience’s core needs and motivations, and how your products, services, and marketing will align with these.

This will help to exhibit your understanding of the market to potential investors, and help them visualise the way your business will fare against the current competition.

Business location and launch date

Your company description should also let people know where you’re based. 

The exact format that you adopt with this will depend on the nature of your business, and the relevant aspects of your business location. 

For example, if you’re running an independent cafe, you might want to list the specific mall or high street where your flagship branch is based, highlighting the high level of foot traffic it gets. 

If you’re running a B2B services company, you might want to mention your head office is in a particular district of the city associated with your industry.

You should also include the date you launched, or the date you’re planning to launch if you haven’t already.

Mission statement

The mission statement of your company description is a brief description of why your business exists, summarised neatly in 1 to 3 sentences, no more than 100 words in total. 

This statement isn’t about getting into the specifics, and should be thought of more as copywriting for an audience of investors. 

It should be a short, yet compelling chunk of text that explains what your business does and the values that guide it.

Products and services

The products and services section should give readers a snapshot of your products or services. 

This look at your product(s) should have particular emphasis on the features and benefits that set them apart from close competitors, for example a ‘won’t be beaten’ price guarantee or a commitment to buy only from local suppliers.

Business structure

The company description should also specify your business structure, whether that be a sole trader, partnership, limited company, or limited liability partnership. 

If relevant, this is where you should also list directors and shareholders who are involved in the running of your company.

Company description example

To provide a better idea of what a company description should do, we’ve written one for our previously mentioned fictional pan-Asian restaurant, Blue Monkey.

If you’ve covered all the aspects listed so far, you should have a company description that reads something like this:

Blue Monkey is a casual restaurant and takeaway that serves the best pan-Asian cuisine to hungry and adventurous customers in Brighton, East Sussex. Blue Monkey aims to provide an authentic experience for foodies and travel junkies who want to explore exotic new dishes, but don’t have the time or know-how to prepare meals that hit the spot.

Blue Monkey’s pan-Asian menu is inspired by genuine recipes sourced in person by our owner Mark Horton during his travels throughout Asia. Its unique menu offers authentic tastes from Korea, Indonesia, Thailand, and other nations, all using the highest-quality organic ingredients.

Blue Monkey aims to improve their revenue by 15% and form partnerships with 2 new local suppliers in the next financial year. We are also looking to open a new branch in Camden Town. We are seeking an investment of £350,000 in exchange for 20% equity in the company.

Step 3: Outline your business goals

Now, you’re ready to expand on the earlier points raised in the business plan, which starts by outlining your business goals.

Business goals are the predetermined targets that your company will set out to achieve within a specific time frame. 

These can include short-term goals, with time frames covering a matter of weeks or months, and long-term goals, which outline where you want the business to be in 5 years, 10 years, or longer.

Whether simple or complex, short-term or long-term, your business goals should always qualify as SMART goals (Specific, Measurable, Achievable, Relevant, and Time-Limited).

Carry out the following steps to create effective business goals:

1. Analyse and establish objectives

The first step is to carry out a thorough analysis of your business, as well as the wider market and industry, and macroeconomic factors that may affect your business’ success. 

One of the most popular ways to assess your business’ position in the wider market is through a SWOT (Strengths, Weaknesses, Opportunities, and Threats) framework. 

This method makes it easier for the company leadership to assess what’s working at the business and what needs to be improved. 

At the same time, this framework can give you a greater sense of direction when making decisions about the future of the company, such as the untapped markets you can expand into or new products and services you may want to offer.

More than anything, this look at your business’ current position will help you determine the kind of goals that you can realistically achieve, and those that will be out of reach until you’ve hit earlier milestones.

Having carried out your analysis and got a good sense of your company’s position, you should find it easier to turn this into realistic and measurable objectives, e.g increase autumn and winter sales by 30%.

2. Establish time frames

While articulating the goals that you want to achieve for your business, it’ll quickly become clear which ones are short, medium, and long-term goals. 

Beyond this though, it’s important to set specific time frames for each goal, considering both your analysis of the market and your own business’ resources.

When deciding on time frames, it can be hard to decide what’s realistic, especially for larger, complex projects. 

It’s often helpful to break the task down to as small a unit as possible, assigning each individual sub-task that goes into the goal its own value in hours. 

Using these smaller units to build up to something more top-level will give you a succinct roadmap to success, while giving assurance that your estimations are based on granular, accurate data. 

Even when you’re used to long-term planning in a commercial setting, setting goals for a business plan can be a challenge. 

You may find the Objectives and Key Results (OKRs) goal-setting methodology helpful for breaking down your business goals into smaller, more actionable steps.

3. Think about measuring

With measurable objectives and a time frame for each one, you need to establish a plan for how you’re going to measure your success.

This involves setting out how you’re going to access the relevant metrics to measure your success (standard financial reports, marketing analysis tools, etc.) and when and how this data will be reported up the chain. 

At this stage, you should also decide who’s going to be held accountable for each goal, and the expectations you’re going to set when it comes to the frequency of reporting, and the level of detail they should be delivering.

4. Integrate

Next, spend some time thinking about how your goal is going to fit into your organisational structure and resources. 

This means developing business strategies pertinent to the goals, with plenty of smaller milestones you can use to track how each goal is progressing. 

If you’re a solo entrepreneur, then integrating the goals into your business will fall to you. 

Having established the broader, overarching goals for the company, let these goals seep into the other facets of your business and become a guiding principle of every task you do, no matter how big or small.

5. Communicate

Finally, communicate the goals you’ve established throughout the entire organisation

This will give you a baseline you can use to effectively assign the roles and responsibilities that feed into your larger business objectives.

Even if a lot of your employees are in roles that seem pretty far divorced from the goals you’ve established, it’s important that everyone gets a look at the big picture objectives guiding the whole business. 

This will help to contextualise the smaller goals they’ve been set, and understand how the work done in their role affects the larger business.

Step 4: Describe your product or services

The next section your business plan will need is a product or service description. 

This is your chance to fully explain the offering that’s going to drive sales and build a healthy base of customers or clients. 

It will also need to cover the key details around buying, manufacturing, packaging, and selling so that readers can see how you’re planning to bring your product or service to the end customer.

For an audience of investors, your product or service description can also act as an important anchor for new business owners who will be inundated with work soon after launching. 

When the going gets tough, referring back to a singular vision of what your product or service is meant to look like can help you shut off outside influences and stay true to the original vision you had for your business.

Even if your product is especially technical, it’s important that you explain it in layman’s terms, avoiding complex jargon that could risk alienating readers

Remember that you’re not necessarily writing for someone with experience in your industry or niche, and certain concepts may need explaining in order to effectively communicate the value of the product.

For more common and familiar products or services, it’s still important to aim for clarity and accessibility to frame your product in the best light possible. With these kinds of products, remember to stay focused on the benefits the product offers and the problems it solves, rather than the intricacies and details of the product features.

Some key best practices to bear in mind include:

  • Put the customer first: A product or service won’t find success unless it can satisfy the end user. Try to place emphasis on the customer’s wants and needs in your product description, and clearly articulate how your offering is going to better the end customers’ lives.

  • Cut to the chase: The product or service section of your business plan can be as in-depth as it needs to be. However, the more technical details of the product should come later, once you’ve placed your product’s core value front and centre. 

Start by stating the USP (unique selling point) up-front, then elaborate later in the section with any necessary details to show how the product or service delivers this value.

  • Focus on what makes you different: Unless your product or service is completely revolutionary, there are going to be a lot of big-name competitors out there that readers will naturally think of. 

Make a point of emphasising how your product or service is different from what’s already on the market to avoid unfair comparisons and associations.

Additional sections for your product description

To make drafting this section of your business plan a little easier, here’s some commonly-used subsections of a business plan product description that you may want to include:

Product comparison

A breakdown of the features exhibited in both your product or service and its close competitors. This can be formatted as a chart to make it easier for readers to understand each product’s capabilities in different areas.


The stage of development where your product or service is at the time of writing your business plan. 

  • Is it still just a fleshed-out idea? 

  • Do you have a functioning prototype or a minimum viable product (MVP)? 

  • Have you sold a small number of units and are now looking to grow your operation?

Certifications and intellectual property 

Including this section in your business plan will help demonstrate your commitment to quality, legal compliance, and protecting the unique assets of your business long-term.

  • Has your product undergone necessary testing and received important certifications? 

  • Have industry journals and experts had a chance to try out your product? 

  • Is your intellectual property protected by a patent, trademark, or copyright?

Price point

The section where you spell out what you’re going to charge the end user for your product or service, along with data on how this compares to the current market. 

The other areas of your product or service description should justify this pricing with a thorough exploration of its features and benefits, and how these compare to competitor products.

Sales and distribution

Will you be selling your product in a physical store, through an online store, or a combination of the two? 

If you’re selling through more than one channel, what will your ratio be? 

Are you going to be selling through your own properties and online assets, or will you be selling to vendors too?


An overview of how you’re going to fulfil the demands of customers, including details of how products will be produced and how much of this will be handled by third-party entities such as suppliers and logistics firms.


If your product or service is going to require any kind of specialised equipment or software development technology to be produced or distributed, it’s important to go over this in a separate equipment section.

Cross selling

Do you have plans to expand your business’ range with products that will complement your core stock? Outline your post-launch plans here.

Photos and graphics

Last, but not least, many business plans can benefit from including high-quality photography of your product prototype, or graphical representations of what the product will look like when it’s produced. 

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Step 5: Market research

Following your product or service section, most readers will expect to see a section on market research. 

This should provide a detailed look at the market you’re going to be entering, with objective data to back up any claims you’re planning on making. Traditionally, this data is listed and credited in the appendices of the document. 

However, assuming that readers are going to be viewing your plan from a computer or other device, you’ll be able to add links throughout for fast, easy navigation.

Aspects of market research

Here are some of the key subsections to include in your market research. By covering these bases, you’ll make it easy to understand for potential investors and maximise the chances that they’ll be receptive.

Industry description

Provide an overview of the industry you’re going to enter with both quantitative and qualitative descriptions, explaining the factors that make it an attractive market for your business idea. These could include the industry’s size, trends, growth rate, and macroeconomic outlook, all of which can prove useful here.

Target audience

A detailed profile of the ideal customer for your product or service, including the size of the market, their purchasing power, and the motivations that drive this audience. For this section, be sure to gather datasets on this audience such as their age, gender, typical income bands, and any other measurable factors that will define your business relationship with them.

Competitor analysis

Use competitor analysis this section to list some of your close competitors, their current market share if you’re able to find it, and the strengths and weaknesses they’ve been able to exhibit. 

Here, you should acknowledge potential roadblocks which might make it harder for your business to enter the market, and how you plan to overcome them.

Original testing

If you’ve conducted any original market research that’s tested how your product or service is likely to be received, it’s also a good idea to include this in your market research section. 

Though potential investors will want to know the details of how you carried out this research, it’s still important to keep this section as simple and as readable as possible. 

Start with a brief overview of how you conducted your research, then include more details later in the document to outline exactly how you gathered your data.

Lead time

For some businesses, particularly in markets dealing in expensive, bespoke products, it may be pertinent to include projected lead times for your business. 

Outline how long it will take from an order being placed to fulfilment, with different projections for small, medium, and large-sized orders. 

Tips for writing up market research

When researching and writing the previous sections, be sure to bear the following best practices in mind to keep it readable and engaging:

Start with a bird’s eye view

Starting your market research with a top-level summary of the whole section before you get into the finer details is a great way to help with engagement in this part of the plan. 

This will not only help potential investors to quickly understand the research section as a whole, but will also help them to zoom in on the most important points.

Have thorough research

Many business plans fall flat simply because they’re not backed up by sufficient research. The investors reading your business plan will want to see detailed, granular data from your own research drives. 

With this in mind, it’s essential to distribute surveys, run focus groups, and leverage any other methods possible to build robust market research.

Market research will help you gain insight into areas where you can differentiate your business from competitors and offer a distinct USP. As a new business owner, conducting research is a great way to hone your industry knowledge and identify key opportunities.

Use effective visualisations

While it is unavoidable to use the data to effectively communicate your plan, it’s important to make sure that the navigation isn’t overwhelming. 

To make the relevant data clear and easy to digest, be sure to make good use of charts, graphs, and any other visualisations that will help to better illustrate the points of your market research.

Check your sources

When you’re leveraging third-party sources in your market research, make sure they’re up to date and cite reputable sources. 

New market research is happening all the time, and trends that were taken as gospel just six months ago may have now been debunked by new emerging studies. 

Where possible, it’s also important to dig into the methodology of the research you might want to cite, and see how thorough it is when measured up against comparable studies.

Step 6: Outline your marketing plan

The next section you’ll need to write is your marketing plan. This acts as a framework for the various marketing strategies you’re going to use to make sales and develop your brand equity. 

While a marketing strategy for a small business will provide a detailed breakdown of how you’ll accomplish a particular marketing goal, looking at the different channels, content, and tools involved, a marketing plan provides a summarised, top-down view to help people gain a more executive-level understanding of the business’ approach to marketing.

The key aspects of any marketing plan are:

Your marketing mission

Like the mission statement of your overall business plan, your marketing plan needs an articulated mission to guide all marketing activities. 

This part of the plan should be specific to your marketing activities, but not so specific that you box yourself in. If, for example, you’re opening a restaurant that caters specifically to people who eat organic vegan foods, your marketing mission might be something like ‘to attract eco-conscious foodies, help them discover new dishes, and convert them into regular customers’.

The key performance indicators (KPIs) of this mission

With a clear mission in place, you’ll need to articulate how you’re going to track your marketing team’s progress as they work to accomplish it. 

This means determining your KPIs: the specific metrics that will be used to measure the success of your marketing campaigns.

With KPIs in place, you’ll be able to set specific short-term goals for your marketing team to work towards and contribute to your business’ overall mission, while creating accurate reports on its progress which can be shared among the business’ leadership.

Think about our example marketing mission earlier. As part of the mission is to ‘attract eco-conscious foodies’, you might want to track new table reservations that have come through links you’ve posted to social media groups aligned with sustainable, vegan foods. This will count as one KPI you’ll use to measure marketing performance.

List your buyer personas

Buyer personas are fictional characters inspired by your demographic(s), used to provide a detailed picture of the wants and needs of people you’re trying to attract through your marketing campaigns.

These personas should include the usual variables that go into articulating a particular target audience, such as: 

  • Age 

  • Gender

  • Geographic location

  • Income bracket 

On top of the essentials above, it’s wise to consider other factors in their purchasing decision, such as access to budget, seasonal influences and other pain points that might distinguish them from other personas. 

It’s essential that the buyer persona reflects both your current business’ outlook, and its potential for expansion into new target markets.

With this in mind, it’s important to formulate buyer personas using reliable data, and to ensure that your business’ key stakeholders are in agreement with the personas you’re going to use in your marketing plan. 

You can create personas based on real life customers, and how they could be homogenised to share similar purchasing traits that your business could appeal to.

Outline your marketing channels and strategies

There are many different marketing methods and channels you may want to use to grow your business and hit your targets. 

Your marketing plan should include a top-level look at each of these channels, and the strategies you’re going to adopt for each one to maximise your chances of success.

If one of your channels is going to be content marketing, for example, then your section on this strategy might include:

  • The share of content types you’re going to use, for example videos, ebooks, blog posts, and evergreen content.

  • The volume of content you’re going to create, with specific targets for output on a monthly, weekly, or even daily basis.

  • The platforms and assets you’ll use to distribute your content, whether that’s your website, your social media profiles, or industry blogs and journals.

  • The KPIs that you’ll use to measure the success of your content, such as shares, likes, and organic traffic to the pages this content is being used to promote.

State or project your budget

No matter what kind of channels you’re planning to use to promote your business, there’s usually going to be a cost. 

Think about the capital you’ll be able to invest in your marketing budget, and what is normal for the industry. Generally, we would recommend a healthy business should be investing 20% of profits back into marketing, though this does vary across different industries.

With this information, you can plot how this will be distributed among the most relevant channels, such as print advertising, digital advertising, fees for freelancers, or salaries for full-time marketing professionals. 

By allocating budget to different facets of your marketing plan, you’ll instil more confidence in potential investors, lending some ‘how’ to the ‘why’ of your marketing strategies.

List your competitors

Like the broader business plan, your marketing plan needs to demonstrate a keen understanding of who your competitors are. 

This time around, however, you’ll need to adopt a stronger focus specifically on marketing, and how your marketing resources and methods compare to the competition.

When you research your competitors’ marketing, you’ll soon find that different companies will present different marketing challenges. 

One competitor may have a large budget for traditional marketing and dominate the billboards in your local area. Another might have a strong organic search presence, and be ranking highly for the keywords you’re targeting online.

Step 7: Financial analysis

The next step focuses on one of the most important sections of your business plan: its financial analysis.

This section is a given across all industries and business types. For many small business owners, it can be the most challenging part of drafting a business plan, but it can also be a deciding moment for potential investors reading your plan. 

It’s recommended that you enlist the services of an experienced business accountant for this part.

If you’re setting out to draft a financial analysis for the first time, it’s worth creating a start-up checklist to ensure it’s serving your business plan well, and avoid the potential pitfalls of oversight. 

As a new business owner, apply the following best practices:

Enlist outside help

With any other section of your business plan, you’ll feasibly be able to tackle it yourself with the right amount of research and care. 

When it comes to financial analysis, however, it’s recommended that you call in an expert to ensure this section is created accurately and to a high standard.

For new entrepreneurs, accurately anticipating the expenses to launch a business can prove difficult, especially during the early stages when minimal data is available and cash flow fluctuates. 

Trying to make accurate projections of revenue is tricky business, as optimism will almost certainly be higher than experience. With that in mind, it’s important to be absolutely clear on the numbers, as readers are going to be looking for robust financial analysis.

Unless you have a professional background in finance, it’s strongly recommended that you secure the help of a financial expert to outsource the bulk of your analysis. 

Refer to the rest of your plan

When conducting financial analysis for a business that hasn’t started trading yet, there’s going to be a fair amount of unknowns that you’ll need to fill with assumed projections.

It’s important that these assumptions aren’t wild guesses. Rather, they should be aligned with the hard facts and data you’ve been able to draw from previous parts of the business plan, such as your market research and marketing plan.

As an entrepreneur growing a fledgling business, investors won’t expect you to have all the answers. They will, however, expect a level of consistency throughout your business plan. 

Make sure you check any projections you make in your financial analysis against relevant sections of your business plan, and that the different sections align with each other for a more cohesive document.

Know the basics

Assuming you don’t have a background in finance, most of the heavy lifting for your financial analysis is going to be done by an experienced third party. 

However, this is still your business plan, and you may be called on to explain and explore the data within it when you field your business plan to interested parties.

It’s important that you go in with at least a basic understanding of each element of the financial analysis, including how the data has been gathered from various sources and what each figure means.

Use plenty of visuals

Just like your market research, the financial analysis of your business plan might overwhelm the people it’s intended for. 

You can simplify the experience for those reading it by expressing your statistics, projections, and so on using charts and graphs.

To maintain a concise and well-paced business plan, it’s recommended that you only include the most important overarching points of your business analysis in the form of visualisations. 

More granular points about your finances can be explored as separate visualisations in the appendices.

Sections of financial analysis

Whether it’s based on educated estimates for a totally new business, or past data from an established company, your financial analysis section should include certain specific elements. These include:

A balance sheet

Your balance sheet will serve as an overview of various business financials, whether recorded or projected. 

This should cover your assets like equipment and intellectual property, as well as an explanation of how liabilities and equity are distributed within your company. 

In many cases, the assets and liabilities in your sheet will exist outside of recurring sales and expense figures.

Any business equipment, from card readers to larger delivery vehicles will be classed as assets with a financial value that can be assigned to them. 

The same goes for a business premises that you own, any unsold inventory, and unpaid invoices that are owed to you.

When it comes to liabilities, you’ll need to account for all of your outstanding debts as a business entity, from long-term business loans to any invoices that you haven’t paid.

The balance in the balance sheet refers to the final figure calculated by subtracting the sum of all your liabilities from the sum of all your assets (everything you own minus everything you owe).

Cash flow

Your cash flow section focuses on the projected cash coming into your business based on previous forecasts and research, minus any projected expenses you’ve accounted for.

When writing a business plan for your start-up, you’re not going to have any historical data to reference for solid cash flow projections. However, you can still make intelligent cash flow estimates using your sales forecast and expenses budget.

It’s important to consider the kind of business you’re starting when drawing up cash flow projections, and how this might affect the overall accuracy of your reporting. 

In some industries, revenue will typically trail sales, for example in contracts where you may not pay invoices for items until 30, 60, or 90 days after they’ve been received.

Be sure to research the norms of your business type thoroughly, and account for any delay when you’re projecting exactly when you’ll take your revenue.

Profit-loss analysis

Another financial sheet specifically focussed on subtracting the costs of running the business from projected earnings. Generally, this analysis is done either on a quarterly or yearly basis.

Drawing on the data from your expenses budget, sales projections, and cash flow analysis, you can come up with educated projections on your expected profit and loss across the time period that your business plan covers.

Potential interested parties will expect to see a profit-loss analysis that accounts for three years, with separate figures for each individual year as well as one for the entire three-year period.

Break-even analysis

Your break-even analysis is used to show the point at which your operating costs will be covered by your sales.

At this point in your business plan structure, you should have been able to collate accurate projections in relation to your sales and expenses. 

You can then use this data to mark a date when your business is likely to break even - that is, when there’s more money coming in than there is leaving.

Remember that as a start-up, you probably won’t be profitable right out of the gate, and your break-even point is likely going to be a long way off. However, it’s important not to try and rush the process of breaking even by omitting or manipulating your analysis. 

Interested parties will want to see a logical line between the careful, considered projections you’ve made and the date when you expect to break even. 

Using these to support your break-even projection will maximise the whole plan’s attraction as an investment opportunity, and ensure it’s as well received as possible.

Expenses budget

Finally, you’ll need to show a breakdown of any costs you’ll need to cover in order to get your idea off the ground. If you’re starting a business from home using a simple model, you may be able to start your business with no money at all. However, it’s essential to consider how things might develop for your business in the near future, and any new expenses you may need to account for.

Your expenses budget will not only account for the cost of the products or services you’re providing to the end customer, but also any overheads needed to operate as a company.

The exact way you format your expenses budget will depend on the specifics of your business. At the very least, however, potential investors will want to see your expenses broken down into fixed and variable costs.

  • Fixed costs are predictable outgoings that will be the same in any given period, for example the rent on a premises, insurance, or subscriptions for marketing tools. 

  • Variable costs will fluctuate somewhat from one period to the next, for example advertising costs, seasonal staff salaries, and others.

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Step 8: Appendix

The final step in creating your business plan is writing up your appendices.

The appendix is used to organise any supporting data or documentation for the key parts in your business plan, e.g case studies referenced in your market research, or more granular projections from your profit-loss analysis.

While the tables and visualisations provided throughout the earlier parts of your business plan should act as summaries for the relevant data, your appendix is the place where you can present your data in much more granular detail.

Sections of your appendix

Like the rest of your business plan, the appendix should be concise and easy to digest. 

Before you get into the more substantial information left for your appendix, it’s important to include 2 things at the very start:

A table of contents: Depending on how much you want to elaborate on in your appendix, you may be including several different documents. 

By including a table of contents, you can make it easy for your reader to navigate between sections or come back to refresh themselves later.

A statement of confidentiality: If your appendix is going to include things like intellectual property applications or certificates, data on an individual’s credit history, or other sensitive information, it’s important to make a note of this and remind anyone reading that they should not share or discuss this information.

Here’s some examples of the supporting information you may want to include in your appendix:

Detailed financial projections

When your ability to raise capital from private investors or apply for loans hinges on your business plan, your projections will need to be as detailed as possible. 

Consider using the appendix to put your cash flow, balance sheets, and income statements into a higher resolution.

Documentation around intellectual property

If you’ve alluded to any patents, trademarks, or copyright-protected assets, it’s often a good idea to collate the documentation proving this in your business plan appendix.

Management team overview

Many investors like to see a brief profile of the business’ key stakeholders or senior leadership team. 

This can include their job descriptions, certifications, advanced qualifications, and anything else which shows that they’re the right people for the job of running your business. 

If you already have several people lined up for these positions, it’s also a good idea to format this document in a way that outlines the organisational structure of the leadership team.

Customer lists

If you have a B2B customer list already, this can be helpful for demonstrating your ability to maintain healthy, profitable relationships across multiple customer accounts for an extended period of time.

Customer testimonials

If you’re already running your business in a smaller capacity, or you’ve spent time as a solo contractor in a closely-related niche, then consider including any positive testimonials you’ve earned over the years.

Further market analysis

The importance of understanding how to do market research for a small business shouldn’t be understated. If you came across any pieces of market research in the previous stages which you thought were interesting, but not quite pertinent enough to include in your top-level analysis, it may be worth including it as part of your appendix. 

This is particularly true if you have studies that have a direct relation to the ones you’ve previously mentioned, and give more weight to their hypotheses and findings.

Company history and professional background

Oftentimes, investors will need just a little extra information to get them over the line. This will be especially true if your business plan describes how you’re going to make an entry into a particularly competitive industry. 

To provide extra confidence, consider including a section on the history of your business, or on the professional backgrounds of yourself and the key players in your senior leadership team. 

This can make your idea more real and personable in the eyes of investors, while also giving you a final opportunity to articulate how your business is going to carve out its place in the market and distinguish itself from the competition.

Individual credit history

If you’re a first-time entrepreneur with little or no experience in how business credit works, consider including a summary of your own credit history, as long as it’s largely positive. 

Though it doesn’t have a direct bearing on how you’ll manage your business finances, a healthy credit history can be a positive sign in helping to secure funding from potential investors.

Plan for success

Aside from giving you the key to presenting your business idea to potential investors and other interested parties in a polished, professional way, writing a business plan can be a great way to consolidate your disparate ideas and organise your own thoughts.

We hope that this guide has given you a better understanding of the sections of a business plan, and made the journey from a blank page to a finished plan a little less daunting.

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Especially – in the early days of running a business. Be sure to check out our new Free Business Account and learn how it can make managing your start-up’s finances that much easier.

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Disclaimer: The contents of this page are intended for informational purposes only and should not be construed as professional advice. For matters requiring legal or financial expertise, it’s recommended to seek guidance from qualified professionals.


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