How to write a business plan

A business plan should be short and focused. It should evolve with your business and help you identify strengths weaknesses, opportunities and pitfalls. A good business plan will also make it easier for investors to understand your idea.

To write a business plan, start with these five points:

  1. Executive summary

    • This is your elevator pitch. Describe your company, your product or service, who will buy your product, and your business goals.

  2. Target audience

    • Are you selling to consumers or businesses? Include details about your target audience, such as age, gender, social status, location and profession.

  3. Opportunities and scope

    • How will you grow your business? If you plan to sell over the internet, for instance, plan how you’ll attract visitors to your site. If you plan to have a retail store, think about whether you’ll need to hire staff.

  4. Your competition

    • Listing your competition shows you’ve done your homework – investors like this. It also helps you understand what other businesses in your market are offering. Include your:

          i. Direct competition: companies offering the same product or service as you

          ii. Indirect competition: companies who are in the same market as you

          iii. USP: your Unique Selling Proposition – what sets you apart from competitors.

  5. Financial Plan

    • This shows the costs involved in setting up and operating your business, including:

          i. cost to make or buy products

          ii. labour, material and manufacturing costs

          iii. staff costs

          iv. distribution and marketing costs

          v. overhead costs – like rent and power if you have an office space or a shop.

 

Related terms:
What is an executive summary?
What is a financial statement?
What is financial management?

Related Xero feature:
Know how your business is performing with a glance at the business dashboard

Related Small Business Guide:
How to create the perfect business plan in 10 steps

Accounting Terms

Accounting terms and how-tos for beginners. Let us walk you through all the basics that you need know.

How to write a business plan

A business plan should be short and focused. It should evolve with your business and help you identify strengths weaknesses, opportunities and pitfalls. A good business plan will also make it easier for investors to understand your idea.

To write a business plan, start with these five points:

  1. Executive summary

    • This is your elevator pitch. Describe your company, your product or service, who will buy your product, and your business goals.

  2. Target audience

    • Are you selling to consumers or businesses? Include details about your target audience, such as age, gender, social status, location and profession.

  3. Opportunities and scope

    • How will you grow your business? If you plan to sell over the internet, for instance, plan how you’ll attract visitors to your site. If you plan to have a retail store, think about whether you’ll need to hire staff.

  4. Your competition

    • Listing your competition shows you’ve done your homework – investors like this. It also helps you understand what other businesses in your market are offering. Include your:

          i. Direct competition: companies offering the same product or service as you

          ii. Indirect competition: companies who are in the same market as you

          iii. USP: your Unique Selling Proposition – what sets you apart from competitors.

  5. Financial Plan

    • This shows the costs involved in setting up and operating your business, including:

          i. cost to make or buy products

          ii. labour, material and manufacturing costs

          iii. staff costs

          iv. distribution and marketing costs

          v. overhead costs – like rent and power if you have an office space or a shop.

 

Related terms:
What is an executive summary?
What is a financial statement?
What is financial management?

Related Xero feature:
Know how your business is performing with a glance at the business dashboard

Related Small Business Guide:
How to create the perfect business plan in 10 steps

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