February 7


Stress-free Business Planning with a Business Plan Outline

By Patrick Millerd

February 7, 2023

business plan format, how to write a business plan, small business planning, what business planning

Start your business planning with a business plan outline and make the planning process a paint by numbers exercise.

This is in complete contrast to what most business owners imagine when confronted with this task. Often conjuring up thoughts of unpleasant life experiences ... like root canal treatment! 

While preparing a business plan sounds complex and daunting, it's not!

It's just getting down on paper, in a structured and meaningful format, what's in the business owner's mind.  

Filling in the gaps, testing assumptions, evaluating risk, and exposing any half-baked ideas. Weeding out the possibility of having one of the ninety-five out of a hundred businesses that are destined for failure.

Eliminating ideas destined for failure before wasting both time, energy, and money!

The importance of a written plan cannot be overstated. Once it is written down it can be shared with others and objectively analysed.

"Out of every 100 ideas there is probably only 2 great business ideas!"

Introduction to Business Planning

The business plan is the product of a step-by-step, area by area process evaluating the proposed business, or idea, and is an essential ingredient for any proposed business venture.

A well-considered plan is needed as it,

  • confirms to management that they have a good business idea.
  • is the document the management team uses to sell its business or business idea to potential investors, i.e. venture capitalists and banks.
  • is the document in which the company`s future strategy is defined and quantified,
  • will be the basis for the financial backers to assess management`s performance once the deal has been done.

Given the varied purposes which the plan aims to achieve, it must contain the following key elements:

  • a thorough description of the company`s activities, the markets in which it operates, its strengths, weaknesses, and critical success factors,
  • an explanation of where the business plans to go and how it is going to get there,
  • details of the management team who will achieve it.

Who prepares the business plan?

There is often confusion in the minds of the business management about who should prepare the business plan.

The golden rule is that the plan should be an autobiography, not a biography. This means that the owner is accountable for preparing the plan with advice from advisors.

It is the owner's responsibility ... NOT the financial advisors

The financiers are backing the owner and management team so they must be the ones to "own" the document and the strategies and plans in it. Venture capitalists are suspicious of business plans which appear too biographical, so it is better for the plan to reflect the businesses' style and character. 

The role of the financial advisor is to advise the owner and management on the preparation of their plan. The advisor can advise on the length, content, and style of the plan, and the expectations of the financier.

In addition, during the preparation of the plan, the advisor should play a devil's advocate role, challenging the statements made. Ensuring that all the relevant points are covered and that all the arguments put forward are supportable, fair, coherent, and consistent. 

Style and length of the business plan

The document must be positive and punchy in style. It needs to capture the reader's attention and then keep it!

It must contain sufficient information to support the points made and at the same time keep the reader's interest.

Technical subjects or issues need to be explained in simple laymen`s terms. 

Most businesses have positive points, and the business plan is the place to make those points. Make sure the positive points are easy to find and never assume that the reader knows them or will work them out for themself.

Also consider that the strategy and projections in the plan will be used as a performance measure. So, it's wise not to be too optimistic or over ambitious. 

The business plan is usually the first contact that the financier will have with a company seeking finance. Unfortunately, it is also often the last, as only a low percentage of businesses for which business plans are prepared receive funding. 

Given the high failure rate of business plans, and the adage that you only get one chance to make a first impression, it is vital that time and care is taken into the preparation of the business plan and that professional advice is sought.


The contents of your plan should be well-ordered, easy to read, clear, concise, and accurate. You should have a simple written style and the plan must be as practical as possible.

  • Text should be neatly typed and of a legible size. 
  • Double spacing and wide margins help the reader.
  • Wherever possible, use graphs to illustrate numeric trends.
  • Finally, use appendices for detailed reference information. 

Those interested in your business will want to be sure that you understand its critical success factors.  

Unless in a revolutionary market the plan should show consistency between the past and the future. It must draw together the different elements of the business and present them in a logical way.

Forecasts must be realistic, with stated and tested assumptions. 

After the management team has completed the initial draft, they and the financial advisor should prepare the final plan.

... in summary.

  • The business plan must hold the reader's attention ... so make it punchy and interesting. 
  • It must be concise but at the same time cover all the significant points. 
  • The business plan is a selling document but must remain credible.
  • Write positively showing commitment to the business and a thorough understanding of the market.
  • Don`t be over-optimistic
  • Avoid jargon and flowery language
  • Don`t underestimate the length of time required to prepare a business plan. It is an important document, and it's quite normal for the process to take two to four weeks.

The Business Plan Content

The following template can be used by any business owner for the step-by-step planning of their business.

But remember ... this is a guide and not the Ten Commandments! 

Business plans come in many forms depending on their objectives so the format and content should be crafted to fit these objectives. 

However, there is always critical information that hinges on the market and customers and the financial statements and especially the cash flow.

For most business owners, or potential business owners, much of the information will be scattered around on scrappy pieces of paper or in various heads. Also, at the start there will be information missing but this is no big deal ... it can be collected over time.

Unless the business has long-term projects (like contracts involving building power plants!) any plans extending beyond three years are just dreams.

The plan will include the following sections:

Title Page

The cover should carry the name of the company, address, telephone number, the date the plan was prepared and the name of the contact person at the business.

  • Name and registration number of business 
  • Whether new or an existing business 
  • Type of business 
  • Amount of financing required 
  • Name(s) and address(es) of principals
  • Contact person and contact details 
  • Date of plan 
  • Statement of confidentiality of plan

Table of Contents 

The contents should be clearly laid out with each topic and page numbered. This will make it easier for the reader to locate the information required.

Use internal links to the various sections.

Executive Summary

A one or, maximum, two-page Executive Summary will be the most important part of the document. This summary should be done after the rest of the plan is completed.

The summary should be focused, compelling and engaging and include all the key positive points about the business. 

  • a brief description of the business e.g., products/services, target market 
  • the current situation of the business, including key financial data and factors driving success 
  • its aims and objectives over a stated period, in particular growth plans (and assumptions underlying growth) 
  • finance required and a summary of how these funds will be used in the business
  • the benefits likely to accrue to an external investor (if relevant) and the company's exit strategy for the investors.

All the points made in this section should be explained and developed in the plan.

Hint: Less is more ... but it must be complete. It’s a comprehensive summary of not more than two pages. 

Business Overview

As an introduction, briefly describe the background to the business and how it got to where it is now. 

This section needs to explain what the company does, the products it makes or sells, or the services it provides, and who the customers are. 

It also should not be more than two pages and include the following topics:

  • When was the business first established? How did the idea for the business first develop and how was it launched? 
  • What is the current position of the company and how did it get there? (When describing the history concentrate on the last two or three years.) 
  • Where is it based and how it operates? (Describe the sites that the company owns and/or from which it operates.) 
  • Achievements and major events in the business to date highlighting any major events in the history of the business which display the skills in the business. 
  • How the business trades: as a sole trader, a partnership or limited liability company. 
  • Main products/services: a description of products/services currently provided and details of those proposed. Highlight the advantages the company's products/services have over others in the marketplace. This may, for example, include patented technology, the existing specialist skills (or those needed) to manufacture the products, together with any guarantees and services offered with the products.
  • Describe any cost advantages. However only having a cost advantage is not a good enough reason to justify a business.
  • If possible, cross-refer descriptions of the company's products to corporate literature in the appendices.
  • A brief description of how the products have developed, which products have been introduced, which have been dropped and why. 
  • Target market: who buys the products/services. 
  • Customer details, where they are located, how services and products are delivered to them. 
  • The nature of contractual relationships with customers (long-term contracts, one-off projects, etc.) 
  • The relationships with the company's suppliers. 
  • A summary of financial results giving a true and realistic picture of the growth and development of the business.

Industry and Market Analysis

The Industry
  • What industry is the business in? 
  • Is the industry expanding or contracting?
  • Is the industry stable (few changes in technology) or unstable (short life cycle and changing technologies)?

The Market

  • What is the size of the market in volume and value terms, and what are its prospects for future expansion? 
  • Are there any gaps in the market which offer opportunities? 
  • What is the market share and how dispersed is the competition? 
  • Are there any barriers to entry? How exposed is the business to major new competitors coming into the market? 
  • What developments are taking place in the market now and what could the effects be?
  • What other factors affect the market, for example changes in economic climate, trade barriers and government? How will these factors affect it?

Marketing Plan 

The Marketing Plan is critical as it drives many of the company’s programs and will include:

  • Sales and marketing objectives
  • Market positioning
  • Product strategy (including product line, branding packaging and new product development
  • Proprietary issues
  • Communications strategy (including advertising, sales promotion, public relations, personal selling)
  • Distribution strategy
  • Warranty policies
  • Service quality strategy
  • Pricing strategy
  • Distribution strategy


  • What is the customer base and how dependent is the business on individual customers? 
  • How loyal are the customers? What factors affect their future loyalty? 
  • Are sales constant or subject to seasonal fluctuations? Does this present any difficulties in estimating demand for the products/services? 
  • Why should the business appeal to new customers and how will the business convert that appeal into new business? What are their key buying criteria? 


  •  Who are the major competitors and what are their market shares?  What are their marketing strategies and how do they compare with the proposed business? 
  • Overview of major customers, strengths, weaknesses, opportunities, and threats (SWOT analysis). 
  •  What is/will be the market share of the company?
  •  What are the possible developments in competition, for example new competitors and trends? 
  •  How vulnerable is the business to any competitor?
  •  What is the process by which new business is won?
  • How will the business achieve the sales and marketing objectives through verifying the mix of:
    • products/services
    • pricing policy
    • promotional support, and
    • distribution?

Situational Analysis and Business Strategy

Situational analysis                    

  • Revenue analysis and trends (breakdown market segments, product types, seasonal fluctuations, and regions)

Vision and Mission Statements

For more information on creating the Vision and Mission Statements - read this article.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Identify the strengths and weaknesses of the business then based on these, outline the opportunities and threats facing the business. What is required for pursuing those opportunities or protecting against those threats?

Apply the "so what" test when drafting this section.

  • Is the strength really a strength and what difference does it make?
  • What impact does, or will, that weakness have? 
  • Is the opportunity a realistic and significant possibility?
  • Is the threat meaningful? 


The business will not be able to pursue every opportunity or change every weakness overnight. Focus the effort to identify:

  • short term tactical objectives 
  • long term strategic objectives.

Objectives should include qualitative and quantitative measures of performance, such as:

  • the opportunities intended to exploit 
  • the threats to be defended against 
  • sales volume and value 
  • market share 
  • profit before tax and 
  • return on capital employed. 

Explain the key success factors on which the achievement of the objectives depends.  For example, that the target market segment will continue to expand at a rate of 10% by volume and value each year, or that interest rates will be unchanged. 

State the assumptions in respect of these key success factors. A prospective investor will then be able to evaluate whether these assumptions appear reasonable.

Whenever possible all assumptions should be supported by market research or historical results and available industry benchmarks. The major assumptions should be included in the body of the text, with detailed analyses included in an appendix. 


This section should explain where the growth in the business is going to come from and how it is going to be achieved and answer the following questions:

  • What is the strategy for achieving growth? 
  • What are the targets and objectives for the company in terms of market share, pricing and promotional policy, distribution channels etc.
  • In which new markets will the company operate and /or what new products will the company develop?
  • What are the plans for acquisition and expansion?
  • How will existing key accounts be retained?
  • How will new customers be attracted?

The focus should be on the first year (important) and then the next two to three years (less important unless there are ambitious objective growth plans). 

  • How will potential customers be identified and engaged? 
  • How will the business attract customers away from competitors? 
  • How will key accounts be protected? 

Production and Operations

Production process

  • How will the product be manufactured? Is there patented technology? What are the problems anticipated in the production process? 
  • What is the actual and potential capacity of the business and how sensitive is it to breakdowns, unanticipated short-term demand increases, collective labour practices, etc.? 
  • How secure is the source of supply for essential raw materials? Are there alternative sources of supply? 

Premises and facilities

  • How suitable are the premises for the business
  • What are the current and projected future needs in terms of location, size, and type? 
  • Are the premises owned or is the business exposed to increases in rents or termination of the lease? 
  • What is the present state of the machinery, when will it need replacing and at what cost? 
  • Is the present equipment sufficient to manufacture at the forecast levels and how much spare capacity exists? 

Production and operations strategy

Again, outline the plans to overcome weaknesses, to protect against threats and to enable the business to pursue its growth plans.

Human Resources (also known as People!)

Having explained what the company does and what it plans to do, this section needs to explain who is going to deliver the strategy and should include:


  • Who are they and what have they achieved to date? 
  • What are their motivations and aspirations and what are their ambitions for the entity? 
  • Why them? How do their skills contribute to the whole? 
  • To what extent are they committed to the success of the business, including financial commitments? What plans are there for their retention, for example share option schemes etc.?
  • A description of the roles and responsibilities of the management team 
  • Consideration of succession issues and recruitment 
  • Human resource policy and strategy. 

Organisation Structure

  • Show the existing organisation structure and how it is likely to change, if at all, to meet the requirements of the business plan. 
  • How are responsibilities distributed? Are there any gaps? 
  • To what extent will the business be relying on outsiders, for example contract employees, advisors, lawyers, accountants, or non-executive directors? 
  • Looking to the future, how will the anticipated growth affect the structure and the required skills? 

Personnel Requirements

  • What are the present and future employee requirements and are the relevant skills available in the business? 
  • Is productivity satisfactory and how much scope is there for improvement, bearing in mind the industrial relations environment? 
  • What are the current labour costs? How are they likely to change in the light of your plans for the business? 
  • How will the structure ensure effective succession?  

People Strategy

  • What is your strategy for overcoming any weaknesses identified, for protecting against threats and for enabling growth plans? 
  • What changes, if any, to the organisational structure will be needed to realise the strategic objectives? 
  • What will be the strategy for attracting and retaining staff with appropriate skills and with motivation to grow with the company? 

Financial Information

Financial information should comprise both an analysis of historical performance and an explanation of how this relates to the financial projections. Projections should cover at least two years ahead and include:  

  • A summary, with references to the detailed documents, assumptions, and sensitivities in the appendices
  • Detailed financial statements monthly for the first year and at least quarterly thereafter:
  • Profit and loss account 
  • Balance sheet
  • Cash flow 
  • Returns (e.g.  Return on Investment (ROI), Internal Rate of Return (IRR), payback period, months to positive cash flow, cash burn, and breakeven point).
  • A sensitivity analysis showing how the results would be affected by changes in major risk variables, for example demand, gross margin, and any limiting factors.  

When preparing financial projections, it is advisable to avoid trying to invent deal structures with interest and dividends etc.  

Instead assume that the funding requirement is met by overdraft.

This way the actual cash requirements of the business are more apparent. In addition, it is also easier for advisors and venture capitalists to model various deal structures.

Once a financing structure has been agreed it can be included in the plan.

Proposed Company Offering

  • Desired financing
  • Offering
  • Capitalisation
  • Use of funds
  • Investor's return.

Implementation Plan

  • Timetable and implementation milestones 
  • Action plans.


All supporting information required for any assumptions should be attached as appendices to the business plan including:


  • Strengths, weaknesses, opportunities, and threats (SWOT) and strategies to utilize (strengths and opportunities) or defend (threats and weaknesses)
  • Corporate literature. Remember that sometimes a picture is worth a thousand words. Include here any useful videos, brochures or 'coffee table', glossy, promotional literature 
  • Any relevant press articles or extracts on the market in general, the company or its products 
  • Floor plans
  • Copyright/patent information 
  • Maps
  • Leases and contracts
  • Technical data
  • Any analyses required to support points made in the text, e.g., analysis of customers or suppliers.


  • Most recent audited accounts 
  • Detailed financial projections (at least two years) 
  • Assumptions underlying the financial projections. (Include macro-economic assumptions, e.g., interest rates, tax, etc., and specific business assumptions) 
  • Sensitised financial projections. (Although the financial projections contained in the business plan are the central base projections, it is helpful if a downside/pessimistic case is also prepared.

If, under this scenario, it can be shown that the business is profitable and investors can still make a good return, this is another plus point about the business and should be referred to in the main text of the plan). 

Human Resources

  • Corporate organogram
  • Job descriptions of staff
  • Full curricula vitae of the management team
  • Principals CVs 
  • Employment policy details


  • Market research data 
  • Suppliers price lists or quotations 
  • Relevant letters (e.g., advance orders) 
  • Market or customer satisfaction research summaries
  • Published market information
  • List of major clients 

With the plan now complete, all that is left is for me to wish you the best of luck with a successful and exciting business!

Patrick Millerd

About the author

I support small and medium-sized business (SMB) owners to drive profitability and cash flow, managing the financial health of their business through understanding and using their numbers.
Helping them build a complete management system that puts them in control.

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