Understanding Business Plans

Accountancy Resources

Understanding Business Plans

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When you start a business it is really important to put your plans down in black and white. It will help you focus and decide on your targets, development plans, priorities, financial requirements and profit forecasts. It should reveal any weaknesses to you and help you structure your business effectively to avoid any future problems…

It will be essential if you are looking for a UK small business government loan or UK small business grant.

A good business plan will describe and sell your business, the market, your intended strategies, financial requirements and projected targets. A well-drafted business plan is especially valid when you apply for financial help with your start-up, and will help convince a lender that your business is worth investing in. Here’s an example of what you should include in your business plan.

Business Plan Example

Executive Statement

The first and most important part of your business plan should be the Executive Statement. This is where you explain what your business is all about and how it is going to fill the gap in the market. This is the opening and needs to grab the attention of the reader with the highlights and key points of your business plan.

Make sure you describe the type of profit you hope to achieve and the investment required to meet this goal. Some lenders and investors make provisional decisions based on the executive summary. The summary should be concise and ultimately interesting, as when you are seeking finance for instance, you must realise that your business plan will be one of a pile and needs to stand out. It is usually easier to complete this summary of your plan after you’ve completed the rest.

Your Business Overview

This is where you state what your business is all about in the form of an overview : describe your product/service and how your business will operate, the existing market and why your business will succeed, your business history, when you began or are planning to start up, the legal structure of your company and your vision for the future of your new business. Include the pros and cons of your product and how you will develop it for success.


You need to show evidence of a market for your product or service: existing competitors, likely customers and the appeal of your product; how you plan to sell your product – online, by telephone, from your premises. Detail your plans for promotion and advertising for your new business.

You may need to carry out some market research – directly from customers and also using data and information from other sources, such as business organisations and government agencies.

Detail what your business will provide, illustrate that there is a market and any shortcomings of your competitors. For success you really need to offer something better or more original than your competitors. Your product or service preferably needs a “Unique Selling Point” – an edge that will make your business the customer’s first choice.


Provide details about the people involved in running the business:

Who is going to run the business? Are you planning to be a sole trader, partnership or limited company? You will need to decide the number of employees, business premises and prospective suppliers.

Include the skills of those involved.their skills and experience, strengths and weaknesses of the business. A strong management team will make investors more confident.

If you are a one-man band stress your own skills and enthusiasm and your plans for the future, which may involve recruiting further help when you become successful and expand.

If finances aren’t your strength then you need to make it clear that you will be taking financial advice from a professional, so provide details.


Provide details of your expected monthly inc…