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How to write a business planHow to write a business plan


A business plan is...

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 look like


(each typed section must be on a new page):


1. Title page

Title of the plan with the date and names of the business and its author.


2. Contents

A list of the sections listed with page numbers, starting with the introduction and ending with a list of any appendices.


3. Introduction

Introduction to the business and purpose of the plan.


4. Executive summary

A clear and concise (one page maximum) summary of the plan’s key conclusions and recommendations.


5. Main section of the plan

Eight sub-sections discussing the reasons for the business’s success (the 8 C’s – see below and business success).


6. Acknowledgements 

Thanks to anyone who has helped with the plan.


7. Bibliography

Alphabetical listing of any books, websites and other references used.


8. Appendices

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


a) culture

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 How to write a business plan

A future business ideal. For example, the aim of Walt Disney (pictured right) was “to bring happiness to millions”.


c) mission statement

A clear and concise (preferably one sentence) statement of your business purpose.



2. Customers


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 market segmentation.


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 quality),
  • place (how you’re going to distribute the product to customers),
  • product (brand image, quality and the solutions/benefits you’re selling to customers).
  • promotion (including advertising)

Find more detail in these sections:



3. Competitors


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 business).


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?



5. Competencies


a) your distinctive capabilities (or core competencies)

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.


 How to write a business plan

6. Commitment

The motivation and passion of the owner(s) and employees.




7. Cash and profitHow to write a business plan


a) cash

Have you enough cash to pay your bills? - include a cash flow forecast (see cash flow management)


b) budgets

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 strategy  

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. overseas customers).


 How to write a business plan


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).


 How to write a business plan


 Show how you will:

  • exploit your strengths and market opportunities. 
  • minimize the impact of your weaknesses and competitors.


e) resources

Show you have the resources to successfully implement your strategy

Resources are usually summarized as the 4 M’s:

  • money. 
  • men (including women!).
  • materials.
  • machines

Have you the best suppliers in terms of quality, price and delivery?


Key quotes explained

 How to write a business plan

“You plan a tower that will pierce the clouds. Lay first the foundation of humility”

- St. Augustine (a Christian philosopher, pictured right).

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.



How to write a business plan

“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 success”,

- 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 Lincoln.



How to write a business plan

“No battle plan survives contact with the enemy”,

- Colin Powell (former American general and Secretary of State, pictured right).

Defeating the enemy (competitors) requires changing the plan to cope with new circumstances (particularly new customer requirements).


Best books


How to write a business plan

Richard Branson, Losing My Virginity (1998)

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.


How to write a business plan


Judi Bevan, The Rise and Fall of Marks and Spencer...and How It Rose Again (2007) - pictured right

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.

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