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How to write a business plan

Got a brilliant idea for a new business venture? The first thing you need to do is put together a solid business plan. Here’s how to do just that.

Got a brilliant idea for a new business venture? The first thing you need to do is put together a solid business plan. Here’s how to do just that.

Written by
Anna McEntee
Insurance comparison expert
7 MAY 2021
4 min read
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What’s a business plan?

A business plan is a document that describes exactly what your business is and does. It should outline everything from profit forecasts to sales and marketing strategies.

Why do I need a business plan?

There’s a few reasons why you’ll need a business plan. Having a business plan in place can help you:

  • attract investment
  • sharpen your idea and make sure it’s commercially viable
  • anticipate any problems or stumbling blocks
  • calculate all your costs, from staff to equipment to insurance

How long does my business plan need to be?

The length of your business plan will depend on how you’re using it. If it’s just for you and your team, you can afford to make it fairly concise. After all, your reader wants to be able to tell at a glance what you’re doing.

Some companies – particularly tech start-ups – believe in keeping business plans as brief and to-the-point as possible. Brian Chesky, the billionaire founder of Airbnb, famously swears by the one-page business plan.

That said, if you’re using your business plan to attract funding or loans, you may find that potential investors want to see plenty of detail.

How do I create a business plan?

Creating a business plan isn’t as hard as you might think. You’ll find lots of templates online, as well as how-to videos. There’s no particular right or wrong way to do it – it’s a personal thing. How formal it needs to be will depend on what sector you’re in, and where you see your company sitting in the marketplace.

Here’s our step-by-step guide to creating a business plan:

  1. Do your research
    That could mean reading business magazines, enrolling on a university course or talking to other entrepreneurs.
  2. Think about who the business plan is for
    Are you writing it for investors? The bank? Your team? Each of them will want to see something different, so you’ll need to tailor it to their needs.
  3. Who’s your market?
    Your reader will want to know who’s going to buy your product and why. You’ll need to explain why customers will love what you’re offering, and why they won’t just stick with the competition.
  4. Use simple, straightforward language
    People have short attention spans, so don’t make reading your business plan a chore. Whoever’s reading your document should be able to grasp your idea straight away.
  5. Be as specific as possible
    You have a plan, so exactly how are you going to achieve it? Your reader will want to know specifics.
  6. Be honest about money
    How much do you need to set up your business? More importantly, how are you going to turn a profit? Have you considered all the ways you can save cash? You’ll need to ask yourself some tough upfront questions and be realistic about the answers.

What does my business plan need to outline?

However long you make your business plan, there are certain subjects it needs to cover. Among other things, it needs to show your:

  • company goals
  • mission statement
  • analysis of the industry as a whole
  • analysis of your market
  • analysis of your competitors
  • sales and marketing plans
  • plan for success

Creating a business plan: what to watch out for

Whatever traps you fall into when creating your business plan, don’t worry – you can be sure someone else has done the same. Here are some common pitfalls to avoid:

  • Don’t get bogged down in it
    Some people end up spending years on their business plan – don’t! You should be using that time to actually set up your business.
  • Don’t be too brief, either
    If an investor or lender wants to see more detail, you need to provide it. You may find that it helps to have two business plans with varying degrees of detail – that way you can be more flexible. 
  • Don’t forget who the product is for
    Many business plans devote too much space to how brilliant the product or service is, forgetting who their customer is and why they’ll want to buy it. Remember, it doesn’t matter how amazing a product is if there’s no market for it.
  • Don’t forget about your investors
    What do they want? Anticipate any questions your investors will have, and make sure your business plan gives them the answers.  

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Anna McEntee - Insurance comparison expert

Anna’s all about delivering fantastic insurance products at a great price. Value is the most important thing for Anna, as she cuts through the jargon and finds what’s most important and worth your hard-earned money.

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