Example Layout and Format of a Business Plan

Financial charts from a business planWith the pressures of today's commerce increasing, and banks not lending as freely as they once were, the demands of having a professional business plan have only strengthened.

Having such a plan will improve your chances of success with your bank and help your prospects over the longer term.

The examples below are extracts from our range of products available to download online.

The Contents Required in Every Plan

The structure laid out below is what you should have as a minimum in your plan. It's unwise to go overboard with the volume of your document.

Anyone that receives your plan is unlikely to have little concept of you or your business idea, so you need to be concise and get to the point fast.

For most new businesses, 20 pages are sufficient to explain the journey of how you're going to get started and reach your profit objectives and fall into four distinct areas:

  • Information about your business strategy together with details about the product or service specifications.
  • Marketing analysis with sales development strategies.
  • Your personal background story with details on your team's knowledge and qualifications.
  • Details about your financial projections to reach your profit objectives.

If you require a bank loan, then include the timings on repayments. Many people forget to add this section that often presents a big hole in the cash flow forecast, which may lead to the rejection of your loan application.

The Basic Structure

Below are the main headings required by lenders. Each section requires one or two pages of A4. Add appendices at the end of the document for any detailed analysis that adds clarity to your projections.

Executive Summary

The executive summary is the first page of a plan summarising the following the subsequent pages. It's effectively a concise and condensed version of the entire document and is usually the final section completed.

External Analysis

The external analysis includes economic, competitor and market size together with the latest market research and trends. Most of this data is freely available from credible sources. Alway quote the source of any material that's referenced to aid credibility.

Internal Analysis

Your internal analysis contains information about your business, products, costs and profit margins.

SWOT Analysis

The SWOT analysis is the summary of the preceding two sections highlighting relative internal strengths and weaknesses together with external opportunities and threats.

Commercial Aspects

The Sales and Marketing section details the exact plans you have for your sales team and the marketing activities you'll undertake.

Staff and Management Team

The staffing and management team section lists the people behind the brand so add in biographies of the key players.

Financial Plans

Financial statements contain detailed forecasts for the first 12 months then yearly for years two and three. You should include a Profit and Loss Account, a Balance Sheet and Cash Flow Forecast in this section.

You should write the executive summary at the end once all other elements are in place. More detail should be developed for your first 12 months because these are the most critical. If you can't succeed in the first year, then it's unlikely that years two and three matter as much.

The Important Elements

For most banks, they'll read the executive summary first and then look at the detail of your numbers. They'll probably have most questions about your finances so make sure they stand up to scrutiny.

If financial projections are not your forte, then get qualified help. In all cases, you should ensure you can adequately demonstrate the construction of the forecasts so you can answer questions about them. If required, take along an accountant to any investor or loan application meetings.

Getting Help

Help and adviceAlthough planning can seem a chore, it pays dividends further down the line to complete this exercise.

As it's your business with your ideas, it's always better to manage and execute the process yourself rather than use a third-party.

There will be many questions asked if you're applying for finance and if someone else has constructed your plan you may not have the answers.

There are software packages available to help speed you through the process. All banks offer basic free software although most have limited help to complete the sections required.

Once you have a draft copy, get people you trust to critique your work. Read the contents out loud as though it were a company presentation. Get people to ask you questions then you'll be more prepared than most other businesses requiring finance.

Obtaining External Data

Not all the data you require will be readily available for free. However, many industry reports are available online by spending time wisely. Some of the largest brands post proprietary research in their annual reports, and many research companies post summaries of their findings online.