How to write a business plan
A business plan
It explains to its audience (often a bank for a loan) how and why the business will be successful (in
particular, how well it can satisfy its customers)
So also read these sections:
(because a business plan should be presented clearly, concisely and enthusiastically).
What a business plan should
(each typed section must be on a new page):
Title of the plan with the date and names of the business and its author.
A list of the sections listed with page numbers, starting with the introduction and ending with a list of any
Introduction to the business and purpose of the plan.
A clear and concise (one page maximum) summary of the plan’s key conclusions and recommendations.
5. Main section of the
Eight sub-sections discussing the reasons for the business’s success (the 8 C’s – see
below and business success).
Thanks to anyone who has helped with the plan.
Alphabetical listing of any books, websites and other references used.
Detailed reference material (e.g. statistics and spreadsheets).
Put the key points of this material in the plan and then refer the reader to these appendices.
Main section of the business plan (the 8 C’s)
1. Culture and purpose
The business’s key values and how they are put into practice (e.g. customer satisfaction,
respect for the individual and the pursuit of excellence).
b) vision statement
A future business ideal. For example, the aim of Walt Disney (pictured right) was “to bring happiness to
c) mission statement
A clear and concise (preferably one sentence) statement of your business purpose.
a) your market research - showing:
- who your customers are (numerous enough to make a satisfactory profit).
- the market segments, or niches (e.g. rich/poor, male/female, old/young) – see
b) customer profile
(describing a typical customer in terms of needs, income, social class, etc).
c) your unique selling proposition (USP)
Unique and superior benefits and solutions you can offer your customers.
d) your 7’s
(strategy, structure, systems, staff, skills, style of management and shared values, or corporate culture)
How effectively they are geared towards delighting your customers.
e) your marketing strategy
- price (based upon how much customers are willing to pay which is linked to
- place (how you’re going to distribute the product to
- product (brand image, quality and the
solutions/benefits you’re selling to customers).
- promotion (including advertising)
Find more detail in these sections:
a) who your competitors are
Don’t define your market so narrowly that you ignore key competitors (e.g. film and TV are in the entertainment
b) beating competitors
How you will avoid their strengths and exploit their weaknesses.
c) the level of competition
Can competitors easily imitate your product or do your innovation and product
distinctiveness give you the edge?
d) your competitive advantage
What can you give customers your competitors can’t? – see competitive advantage.
4. Change, learning and innovation
Are you continually prepared to innovate, change (quickly adapting
to changes in customer requirements), improve and learn from your successes and failures?
a) your distinctive capabilities (or core
These make you better than your competitors e.g. innovation and customer service.
b) your skills in key activities
Marketing, innovation, operations (or production), finance and leadership/management.
The motivation and passion of the owner(s) and employees.
7. Cash and profit
Have you enough cash to pay your bills? - include a cash flow
forecast (see cash flow management)
These show planned sales and costs for the next 12 months (see budgeting and cost control).
c) profit performance
Are your sales revenue (turnover), profits and profit margins rising in the next five years?
See analysing accounts.
d) your break-even point
How much you need to sell before you make a profit.
See costing and break-even analysis.
8. Corporate strategy
a) the objectives of your
Your business can beat competitors either on price (through lower costs) or
superior quality/image (called product differentiation).
b) communication of objectives
How strategic objectives are clearly communicated to employees.
c) Ansoff’s matrix
Use Ansoff's matrix (see below and corporate strategy) to show how future
sales can be increased by changing products and/or the markets in which they are sold (e.g.
d) a SWOT analysis
Use a SWOT analysis (see below and corporate
strategy) to identify the business’s:
- internal strengths and weaknesses
- external opportunities (e.g. unsatisfied customer needs) and threats (particularly competition).
Show how you will:
- exploit your strengths and market opportunities.
- minimize the impact of your weaknesses and competitors.
Show you have the resources to successfully implement your strategy
Resources are usually summarized as the 4 M’s:
Have you the best suppliers in terms of quality, price and delivery?
Key quotes explained
“You plan a tower that will pierce the clouds. Lay first the foundation of
Augustine (a Christian philosopher, pictured
Successful implementation of a business plan requires the humility to accept your
ignorance and other people’s skills and advice so that your customers are totally satisfied.
“Our goals can only be reached through the vehicle of a plan, in which we
must fervently believe and upon which we must vigorously act. There is no other route to
- Pablo Picasso (Spanish
artist, pictured right).
Be passionate and proactive but prepare yourself, too.
“Give me six hours to chop down a tree and I will spend the first four sharpening the
axe” said the American president, Abraham
“No battle plan survives contact with the enemy”,
- Colin Powell (former American general and Secretary of State, pictured
Defeating the enemy (competitors) requires changing the plan to cope with new
circumstances (particularly new customer requirements).
Richard Branson, Losing My
How Branson (pictured right) turned Virgin into a global success through a business plan based upon customer
satisfaction, constant innovation, employee commitment, cost control and Branson’s charismatic leadership.
Judi Bevan, The Rise and Fall of Marks and Spencer...and How It Rose Again
(2007) - pictured
The story of the successes and failures of the British retailer, Marks and Spencer, which shows
the importance of continually changing your business plan to satisfy new customer requirements.