Free business plan template with step-by-step advice

If you’re starting your own business, it’s crucial to have a business plan in place.

A well-thought-out business plan can help you define your business goals and better understand your target market and competitors. It can enable you to identify any pitfalls in your business idea, giving you time to assess how to overcome these issues.   

Moreover, a business plan can increase your chances of obtaining business funding. Potential investors want assurance that they stand to receive a good return on their investment and your business plan is an essential part of persuading them to invest. 

How to write your business plan, step-by-step

Crafting a business plan can seem a little daunting if you’ve never written one before. But this guide will take you through the process and the key business plan sections step-by-step.

1. Executive summary

The executive summary should be 1-2 pages long. Its job is to provide an overview of your entire business plan. Although it sits at the top of your business plan, it’s a lot easier to write it at the end of the process. 

Begin with a brief description of what your business does and what your vision is. Explain what product or service your business offers and why you’re launching the business. Use this section to summarise the current market and levels of demand, as well as brief earnings projections.

Follow this with an explanation of the people who will be running the business and what skills they bring with them, as well as a brief overview of how you plan to market your company.   

If you encounter difficulties or are uncertain about what to write in this section, consider the following questions for inspiration: 

• Who is your target market and why would they want to buy your product or service? 

• What is the gap in the market that your product or service will fill?

• How much money do you hope to earn in the next three to six months? 

• Do you plan to use business finance to help you get up and running? If so, how much?

• What does your management team look like and what experience does it have?

• What are your marketing plans – e.g. social media, networking events, advertising? 

2. Company overview

Now you need to expand on what your business does, including the company name and its legal structure (sole trader, partnership, limited company, etc), as well as who owns it. Provide additional detail about what problem your product or service solves and why your business exists. 

Use this section to explain your own background and experience. What skills do you have to help you run the business, and how do you plan to help it grow? What does your team structure currently look like, and what might it look like in the future? You don’t need to include descriptions of every role in the company – just the high-level management.  

Be sure to explain what stage your business is at and how long it will take to bring the product or service to market. Don’t worry if these deadlines are a little way away – it’s important that they are realistic and achievable. 

Next, explain your business objectives. How much revenue are you hoping to make within the first year, for example? 

Crucially, you should use this section to highlight your unique selling proposition and what makes your business stand out from the competition. For example, you might be in the process of setting up a one-of-a-kind cake bakery that guarantees all its products are nut-free.

3. Market analysis

Use this section to provide evidence that you’ve carried out market research and know the industry inside out. What are the current trends in the industry, and how big is the market? How much demand is there for your product or service and is this likely to grow?

An important inclusion here is your SWOT analysis. This outlines your business’s strengths, weaknesses, opportunities and threats in a table format. It can help you identify ways to improve your business and what to watch out for. 

For example, if you’re a nut-free cake baker, your strengths could include increasing demand for nut-free products, while your weaknesses might include high ingredient costs and rigorous, costly procedures to prevent cross-contamination. 

In terms of opportunities, you might be able to team up with other businesses, such as health food stores, and create new recipes. Threats might include increased market competition and the risk of cross-contamination, which would damage your business’ reputation. 

Part of your market analysis should include a deeper examination of your competition. Explore who your main competitors are and what they offer. Then look at how your business plans to differentiate itself and stand out. For example, as a nut-free baker, are you planning to offer a wider selection of products or lower prices than your competitors? 

4. Products and services

For this part, include a detailed overview of the products or services your business offers.  Explain how your target market can benefit from using them and why they might want to purchase them. 

This section should also detail pricing. If you’re offering a service, what type of price packages do you have? If you’re selling products, what’s the price range? Explain how your pricing structure will encourage customers to buy your products or services. 

You can also include a section on how your product range might expand in the future. For example, as a nut-free cake baker, you might later offer a tailored nut-free snack range to selected health food stores. 

Include any necessary patents or trademarks in this section, too.

5. Customer segmentation

Here, you should expand on your ideal customer and how your product or service can help and benefit them. 

For example, as a nut-free baker, your target customers will be those with severe nut allergies who often struggle to buy baked goods due to the risk of cross-contamination in most factories. 

Depending on your business, you might want to explore this further, looking at the different sector types that could benefit from your products and services. 

6. Marketing plan and sales strategy

It’s now time to move on to your marketing ideas, explaining how you plan to promote your products and get your business name out there. It’s important to get this right, as it’s key to helping your business succeed. 

Don’t worry if you struggle with this section. Take your time to brainstorm ideas to see what works best for your business. 

A good place to start is to make sure you have an SEO-optimised website that explains exactly what your business does, how it came about, what it offers and what your goals are. Then think about whether you already know people in the industry that you could approach to help advertise your business. Are there any networking events you could regularly attend to help spread the word about your new venture?

Using social media channels such as Facebook, Instagram and TikTok can be another easy way to advertise what you’re selling, as long as you post regularly. Alternatively, you might want to pay for social media advertising or advertise on the radio or by direct mail. If you plan to hire a marketing manager or PR team, you should also state this here.

In addition, explore any plans for retaining your customer base. Using the nut-free baker example, with a physical premises, you could offer a stamp card and offer a discount to customers when they achieve a certain number of stamps.  

Finally, you should explain where your business operates from and why. Is your selected location cheaper than other options? If it’s a physical premises, is it located in an area that’s likely to attract a high footfall? Are you planning to also operate online? 

7. Logistics and operations plan

This section explores your business operations in more detail. Talk about your suppliers and your production process. Do you already have supplier deals in place? How often can you expect deliveries and how long does it take to fulfil orders? 

You should run through your business’s day-to-day operations in detail, explaining exactly how the process will work and the equipment you need – as well as how you plan to source the necessary equipment and its expected costs. 

Also, explain whether you need permits or certifications – food businesses, for example, need to register with their local authority and with the Environmental Health Team. They also need suitable food safety procedures in place, good food hygiene, and they must dispose of waste securely. 

8. Financial plan

Now it’s time to include your financial projections. This can be one of the most daunting parts of writing your business plan if you’re not a financial expert, and you may find it helpful to seek the advice of someone who is. The easiest option is to hire an accountant.

Explain how much you expect to spend getting your company up and running, alongside ongoing costs and revenue projections.

Your startup costs might include business permits and licences, initial equipment and a tenancy deposit if you’re renting premises. You should also outline ongoing costs, such as utility bills and rent, raw materials, marketing, shipping and insurance.  

Next, state your revenue projections for your first one to two years, alongside how soon you can expect to break even.

In this section, you should explain how you will fund your business (savings, investments, credit card, etc) and whether you need to borrow money from external sources, such as via a business loan. If you do, explain how much funding you require and what you will use it for.

Other important information includes an income statement, balance sheet and cash flow forecast. Our downloadable business plan example includes examples of these, but you may find it easier to include them in an appendix if you’ve used accountancy software to help you.

Your projections must be realistic so it can help to use market research and industry averages to help you with forecasts if your business is new. 

9. Appendix of supporting documents

Use this section to include any supporting documents such as legal documents, permits, licences or patents. As mentioned, you can also attach an income statement, balance sheet or cash flow statement to this section to ensure your business plan doesn’t become cluttered.