How to do a business plan: steps, tips and template

Published Thursday 26 February 2026

Table of contents

• What is a business plan?
• Why do you need a business plan?
• Prepare to write your business plan
• Choose the right business plan format
• 1. The executive summary
• 2. Identify your target customers
• 3. Identify your growth opportunities
• 4. Understand the competition
• 5. Build a simple financial plan
• 6. Include an outline marketing plan
• 7. Plan your operations
• 8. Outline your management team
• 9. Keep it simple and focused
• 10. Use templates and tools to simplify the process
• Review and refine your business plan regularly
• FAQs on business plans

Key takeaways

• Prepare thoroughly before writing by gathering financial records, conducting market research, and involving your team to create a more efficient and comprehensive planning process that typically takes 20 to 40 hours to complete.
• Choose between a traditional business plan (20-40 pages for formal investors and bank loans) or a lean business plan (5-10 pages for internal use and simple businesses) based on your specific purpose and audience.
• Build a simple financial plan that includes startup costs, ongoing expenses, and revenue projections, while creating a 12-month cash flow forecast and considering potential downturns of 15-20% in your risk management strategies.
• Review and update your business plan at least annually or whenever significant changes occur, treating it as a living document that helps you track progress, adapt to market conditions, and maintain focus on your priorities.

What is a business plan?

A business plan is a written document that outlines your business strategy, goals, and path to profitability. It explains how your business operates, who your customers are, and how you'll make money.

A business plan differs from a business proposal, which pitches a product or service to a prospective customer.

Why do you need a business plan?

A business plan helps you clarify your ideas, secure funding, and stay focused as your business grows. This is critical when research shows small businesses can face regulatory compliance costs ten times higher than large companies.

Here's why a business plan matters:

• Clarify your ideas: Writing forces structure and substance into your thinking, making ideas clearer on paper than in your head.
• Identify problems early: Documenting your business idea reveals gaps you may have missed.
• Gather feedback: A written plan lets trusted advisors review and improve your strategy.
• Secure funding: Banks, investors, and accountants need proof you're serious before they support you.
• Stay focused: A plan keeps you on track as day-to-day work becomes a distraction.

These steps will guide you through each section of a complete business plan.

Prepare to write your business plan

Gathering information before you start writing saves time and improves the quality of your plan. Preparation helps you write more efficiently and ensures you don't miss critical details.

Here's how to prepare:

• Gather financial records: Collect expenses, revenue data, and funding requirements.
• Conduct market research: Understand your industry, customers, and competitors.
• Involve your team: Get input from partners, advisors, or employees who bring different perspectives.
• Set a realistic timeframe: A comprehensive plan typically takes 20 to 40 hours to complete.
• Commit to professionalism: Treat the plan as a formal document that represents your business.

Having this information ready before you write makes each section easier to complete.

Choose the right business plan format

Business plans come in different formats. The right one depends on your purpose and audience.

Traditional business plan

A traditional plan is comprehensive and formal, typically 20 to 40 pages. It includes detailed sections on your market, competition, financial projections, and operations.

Use this format when:

• seeking bank loans or external investment
• presenting to formal investors or partners
• operating in a complex or highly regulated industry

Lean business plan

A lean plan is shorter and focuses on key elements, usually 5 to 10 pages. It covers the essentials without extensive detail.

Use this format when:

• planning for internal purposes only
• testing a new business concept quickly
• running a simple business with straightforward operations

Both formats cover the same core components. The main difference is depth and detail.

1. The executive summary

The executive summary is a brief overview of your entire business plan. It describes your company, product or service, and mission in a way that captures attention quickly.

Think of it as an elevator pitch. In just a few sentences, explain:

• what your business does
• who it serves
• why it will succeed

Keep this section to one page or less. Investors often read the executive summary first to decide whether to continue.

You can read more in the guide What is an Executive Summary in a Business Plan?

2. Identify your target customers

Target customers are the specific people or businesses most likely to buy from you. Identifying them clearly is one of the first questions investors will ask.

Consider these factors when defining your target customers:

• Customer type: Whether you're selling to consumers or businesses, and if businesses, which roles you'll target
• Purchase frequency: Whether you'll have regular clients or one-off buyers
• Demographics: Age, gender, income level, and social status
• Firmographics: Company size, revenue, and industry (for business-to-business (B2B))
• Location: Geographic area, town, or country
• Profession: Specific occupations you're targeting
• Shared interests: Groups with common habits or needs

Speak to potential customers before finalising this section. Real conversations validate your assumptions and strengthen your plan.

3. Identify your growth opportunities

Growth opportunities are the ways your business can expand over time. Documenting them shows investors you're thinking beyond your starting point.

Consider these questions when identifying opportunities:

• Customer acquisition: How will people find you and what will convince them to buy?
• Channel expansion: Could you move from online sales to a physical location, or vice versa?
• Market expansion: Are there new geographic areas or customer segments to pursue?
• Product development: Could you add complementary products or services?

You might start small, but your plan should show how you could scale.

4. Understand the competition

Every business has competition. Failing to address yours signals inexperience to investors. Be thorough when analysing your competitive landscape.

Identify these elements:

• Direct competitors: Businesses selling the same products or services as you
• Indirect competitors: Businesses whose market overlaps with yours
• Barriers to entry: Factors that prevent new competitors from entering your market
• Unique selling proposition (USP): Your point of difference based on price, service, quality, range, or value

Your USP is critical. Spell out exactly how your business will stand apart from competitors.

5. Build a simple financial plan

A financial plan outlines your startup costs, ongoing expenses, and revenue projections. This section is essential for securing funding.

Include these financial elements:

• Startup costs: One-time expenses to launch your business
• Product costs: Cost to make or buy the items you sell
• Labour costs: Wages for manufacturing, service delivery, or operations
• Marketing costs: Budget for advertising and customer acquisition
• Overhead costs: Fixed expenses like rent, utilities, and insurance
• Revenue projections: Expected income based on your pricing and sales forecasts. Consider potential downturns, such as a 15–20% drop in sales, and factor these scenarios into your risk management strategies.

Good accounting software helps you build and maintain your financial model. To provide a clear picture of your finances, experts recommend creating a cash flow forecast that shows projected cash flows for each month over a 12-month period. Talk to your accountant or bookkeeper for guidance on realistic projections.

6. Include an outline marketing plan

A marketing plan explains how you'll attract customers and generate sales. Use the five Ps framework to structure this section:

• Pricing: How you'll price your product or service
• Positioning: How your offering fits into the market relative to competitors
• Promotion: Which channels you'll use to reach and communicate with customers
• Profit: How much margin you expect per sale
• Place: Where customers will buy from you, whether online, in-store, or through distributors

7. Plan your operations

An operations plan describes the daily activities required to run your business. This section shows investors you've thought through the practical side of execution.

Cover these operational areas:

• Production: How you'll manufacture, source, or deliver your product or service
• Logistics: How you'll manage inventory, packaging, and distribution
• Sales processes: How customers will find, evaluate, and purchase from you
• Customer service: How you'll handle enquiries, complaints, and support
• Technology: Which systems and tools you'll use to manage operations

8. Outline your management team

Your management team section describes who will run the business and what expertise they bring. Investors want to know you have the right people to execute your plan.

Address these questions:

• Key roles: Which positions are essential to launch and grow the business?
• Skills gaps: Where do you need people whose abilities complement yours? A 2010 survey found that small business owners are mainly responsible for preparing the quarterly Business Activity Statement in 60% of cases. You might identify a need for an external accountant or bookkeeper to fill this gap.
• Hiring strategy: How will you attract and retain the talent you need?
• Advisors: Which accountants, lawyers, or mentors will guide your decisions?

Learn more about hiring employees for your small business.

9. Keep it simple and focused

A good business plan is brief, relevant, and focused. The core document should be 10 to 20 pages for a traditional plan, or 5 to 10 pages for a lean version. Complex, lengthy documents often go unread.

Tips for keeping it concise:

• Edit ruthlessly: If you find yourself overwriting, take a break and cut on the next pass.
• Focus on essentials: Include only information that supports your key arguments.
• Use clear language: Avoid jargon and explain technical terms simply.
• Let others review: Fresh eyes spot unnecessary content you've become attached to.

10. Use templates and tools to simplify the process

You don't have to start from scratch. Templates provide a proven structure that ensures you cover all essential sections.

Download a free business plan template designed for small businesses. It guides you through each section with prompts and examples.

Using a template helps you:

• Stay organised: Cover all essential sections without missing key elements.
• Save time: Follow a proven structure instead of creating your own.
• Look professional: Present information in a logical, polished format.
• Focus on content: Spend your energy on substance rather than formatting.

Download the template and customise it to suit your specific business and industry.

Review and refine your business plan regularly

Your business plan is a living document. Professional guidance suggests creating a strategic plan with a three-year horizon that is updated annually, or whenever significant changes occur in your business or market.

Regular reviews help you:

• Track progress: Compare actual results against your original projections.
• Adapt to change: Adjust strategy based on new market conditions or opportunities.
• Stay focused: Revisit priorities when day-to-day demands become distracting.
• Maintain accuracy: Keep financial projections current for potential investors or lenders.

As you write your business plan, build on your strengths while being realistic about areas for improvement. This balance makes your plan more credible to investors.

Work with your accountant or bookkeeper to keep financial sections current. Good accounting software helps you track the metrics in your plan and generate updated reports. Get one month free to simplify your financial planning and reporting.

FAQs on business plans

Writing a business plan raises practical questions. Here are answers to the most common ones.

How long does it take to write a business plan?

A comprehensive business plan typically takes 20 to 40 hours to complete. If you've gathered your financial data and market research beforehand, you can complete a lean plan in 10 to 15 hours.

Do I need an accountant to write my business plan?

You don't need an accountant to write your plan, but having one review your financial sections is valuable. Accountants help create realistic projections and ensure your numbers make sense to lenders.

How often should I update my business plan?

Review your business plan at least once a year, or whenever significant changes occur. Major events like launching new products or seeking additional funding are good triggers for updates.

What's the difference between a business plan and a business proposal?

A business plan is an internal roadmap for how your business will operate. A business proposal is an external document that pitches your product or service to a prospective customer.

Can I use the same business plan for a bank loan and investors?

The core information stays the same, but adjust the emphasis for your audience. Banks focus on financial stability and repayment ability. Investors look for growth potential and return on investment.