How to write a business plan

Executive summary

One page that stands alone: what the business does, who buys, why it will work, how much you need and what for. Write it last, put it first.

The business and its customers

Describe the product or service and the specific customers. 'Office workers within 2 km who buy lunch' is useful; 'everyone' is not. Show evidence they want it: pre-orders, surveys, similar businesses.

Market and competition

Size the market you can actually reach, not the national total. Name competitors honestly and say why customers will choose you: price, quality, location, speed.

Operations and team

Explain how the business runs day to day: location, equipment, suppliers, staff, hours. Show why your team can do it.

Marketing and sales

How will the first customers hear about you and buy? Be specific: channels, costs, expected results.

Financials

Show start-up costs, monthly costs, prices, expected sales and when you break even, with clear assumptions. Banks focus on cash flow and repayment.

• Start-up costs
• Monthly fixed and variable costs
• Sales forecast with assumptions
• Break-even point
• Cash flow for 12 months
• Loan use and repayment

Common mistakes

Plans get rejected for the same reasons.

• No evidence of demand
• Market size that is the whole country
• Forecasts with no assumptions
• Ignoring competitors
• Too long and vague

Write it with DocuForge

DocuForge lists the questions your reader will ask, shows a free page plan, then writes and designs the plan from your numbers. Have an accountant check the financials before a loan application.

How long should a business plan be?

For a small business loan, 10 to 20 pages is common. Lean plans for yourself can be 1 to 2 pages.

Do banks read the whole plan?

They read the summary closely and focus on the financials and your ability to repay.

Do I need a business plan for a small shop?

If you are borrowing money, yes. Even if not, writing one tests your idea.

What is a lean business plan?

A one-page version listing problem, solution, customers, channels, costs and revenue. Good for planning; banks usually want more.