Jump to Main Content

Guide to preparing a business plan

Your business plan is a management tool that is designed to suit the structure and needs of your particular business. There is no one-size-fits-all business plan or set formula you have to follow.

This leeway to design your own business plan can feel quite daunting at first, but this is easy to solve if you identify why you need a business plan. Reasons could include setting business goals and objectives, establishing performance requirements and assessing whether these have been achieved, or communicating your strategy and business vision to people both inside and outside your company.

The structure of your business plan

A business plan usually serves a number of purposes. It is a good idea to identify the purposes you’d like your business plan to achieve because this could affect how you choose to structure your plan. For example, you’re likely to focus on different information depending on whether your plan is intended as an internal document for your key staff, or for raising finances from lenders or investors.

Review the three possible business plan structures in the table below to select the best structure for your business. Because there is no set way to structure a business plan, the final format is one of personal preference. You might find one outline is more suited to your business than another.

Structure 1 Structure 2 Structure 3
Cover page Cover page Cover page
Table of contents Executive summary Brief statement
Executive summary Table of contents The market
The Business Business overview Personnel skills and resources
Marketing Market overview The benefits of your product
Staffing Business goals/objectives Business goals/objectives
Purchasing Requirements overview Long-term plans and needs
Production Operations overview Financial targets
Finances Sales and marketing overview Business history
Supporting documents Financial overview Supporting documents

If you’re writing your business plan as part of the process of applying for a loan, it’s a good idea to include a one-page cover letter. The letter should briefly cover the following: The type of loan you are looking for. The amount of the loan and the length of the loan period. What you need the money for How you will plan to make repayments.

If you are applying for a loan, you will probably need to include more detailed personal information, including your tax returns, account statements, assets, liabilities and other business interests.

Writing your business plan

Keep your business plan as short and simple as possible. Use simple language and short sentences so that it is easy to understand, and edit your draft to remove unnecessary words. Use bullet points or tables if this makes ideas easier to read or understand.

Start by jotting down points and ideas under each of the headings you plan to include in your business plan. Then sort these ideas so that there is a logical flow. At the same time, look out for any gaps or weaknesses and fill them in with the necessary research.

Present your facts and information so they flow logically rather than jump around, and make sure information in different sections supports other sections. You don’t want to present information that is inconsistent or raises questions about the accuracy of your plan.

Avoid the temptation to overstate market demand or financial predictions in particular, and bear in mind that any figures in supporting documents will need to back up the words in your business plan. Be aware that when you discuss the plan with others such as lenders or investors, they will likely question you closely on tactics, goals and any assumptions you make in the plan. Be prepared to explain and defend your financial forecasts and market research.

Start writing your business plan as soon as possible and keep refining and editing your work to keep it as short and readable as possible.

Writing your executive summary

Your executive summary is an important part of your business plan. It is the first section people will read, so it should provide a brief but complete overview of your entire business plan to encourage them to read further. Because it covers the entire business plan, the executive summary is usually written when you have completed all the other sections and have a clear ‘map’ of the plan in your head.

Your executive summary should be no longer than two pages, simply written and to the point, with an emphasis on the key issues of your business plan and a focus on the areas that will make your business successful in a competitive market. Use your plan’s table of contents to map out your summary, and elaborate on the areas that are important. It is a good idea to end your executive summary with a short statement of why your business is poised to be a success.

The table of contents

The table of contents can appear before or after the executive summary. It’s a simple index to help the reader locate specific information in your plan. Remember to check the accuracy of the headings and page numbers before printing the plan.

The presentation of your business plan

Make an effort with the presentation of the plan as it could be one of the first impressions someone gets of your business. Check that the layout is neat and professional-looking and pages are numbered. It’s a good idea to include a cover page and bind the plan between cardboard or plastic front and back covers so it looks professional. Spending a little extra time on the presentation of your business plan will ensure it presents your business in the best possible light.

Does my business plan need an external review?

Your business plan does not need to be approved or verified by anyone, but it’s a good idea to let a few people review a draft. Ask your accountant and a few business acquaintances or mentors to read through your plan to identify any inconsistencies or gaps you need to correct.

Finally, paying to have your business plan professionally proof read before you print it out is worthwhile because it ensures the plan will be free of embarrassing spelling and grammatical errors.

Learn more about Small Business Banking at Meridian