Business Planning Guide

This is your one-page story in plain words. Someone should be able to read this and immediately understand what you do, why it works, where you’re headed and if they want to keep reading.

• Outline what you do, as if you were explaining your business to someone who doesn’t know your industry. Avoid jargon.
• Clarify how you reach customers and your channel to market, for example retail, online, direct sales, distributors, or partnerships. Be specific, for example, ‘we sell directly through our Shopify site and via two national retailers.’

Be specific, for example, ‘we sell directly through our Shopify site and via two national retailers.’

• Justify why it works or your unique selling proposition. It might be your expertise, price point, customer service, or intellectual property. Make it tangible, like ‘we deliver websites in half the time of competitors.’
• Demonstrate barriers to entry and how you protect your business. If you have a patent, exclusive supply deal, or deep industry knowledge, write it down.
• Outline your current financial position as readers of your plan will want to see if you’re realistic about costs and cash flow. Briefly outline current net profit and cash reserves.
• The future: Paint a credible picture of where you see growth. This might include expanding into new cities, developing complementary products, or automating delivery.

Here you demonstrate credibility by showing the journey so far.

• Tell the history of the business and what you’ve achieved. A start-up might describe research and prototype testing, an established firm should highlight milestones such as revenue growth or major contracts.
• Outline core products and services and go deeper than your one-line description. Detail your range, key features, and what makes them appealing.
• List any intellectual property like trademarks, patents, or designs. Even if pending, mention them. If you have none, outline what you intend to protect.
• Explain your intellectual assets which are softer advantages like customer relationships, proprietary processes, or deep technical know-how. Investors value these even if they can’t be legally registered.
• Map your footprint of locations, outlets, countries. If you have a single location but plan to expand into multiple markets, note this.
• Describe what makes you special. Highlight awards, testimonials, or brand recognition. This is where you differentiate yourself from others in your industry.

Every business faces risks, such as economic downturns, supply chain disruptions, staff illness, cyberattacks, or natural disasters. A good plan acknowledges them and prepares responses.

List your three to five biggest risks and rank them by likelihood and impact. Then decide how you’ll reduce or respond to each one. For example:

• If you rely on a single supplier, line up alternatives.
• If cyberattacks are a concern, put stronger security policies in place.
• If illness could halt operations, cross-train staff or have part-time employees on stand-by.
• Build internal resilience so you can bounce back faster when setbacks happen.

Other ways to reduce business risk include:

• Show how digital tools automate parts of your business, for example customer service, cloud-based accounting, or e-commerce platforms.
• Demonstrate how you build trust with case studies, testimonials, third-party endorsements, and industry certifications.
• Explain how you would scale and build capacity without major capital investment.

Readers will trust your plan more if you prove you’ve stress-tested it against challenges.

Protect your competitive advantage

This involves creating barriers that make it harder for others to replicate your success.

• Make sure staff and partners sign confidentiality or non-disclosure agreements to protect your business secrets.
• Secure exclusive licenses, long-term supplier relationships, or unique contracts that competitors can’t easily replicate.
• Register your IP, including logos, slogans, patents, and product designs, to prevent competitors from copying your ideas.
• Focus on areas like customer loyalty, supplier relationships, or proprietary technology that are difficult for competitors to duplicate.

Protecting your business is essential for maintaining your position in the market. It’s how to make sure that your unique strengths remain safeguarded from competitors and continue to drive your success.

Reduce risk with insurance

Insurance plays a vital role in safeguarding businesses, transferring financial risks to a third party, and making sure a business remains resilient in the face of uncertainties. Risks businesses commonly face include:

• Operational risks, which are inefficient systems, workplace accidents, or supply chain disruptions. For example, equipment malfunctions could lead to financial losses.
• Strategic risks, which include competitive pressures, shifts in consumer demand, or regulatory changes.
• Compliance risks, which is when a business fails to adhere to industry regulations, such as tax laws or standards.
• Reputational risks, such as negative publicity, data breaches, or poor customer experiences.

Types of insurance

• Cyber for data breaches, identity theft, and cybersecurity incidents.
• Professional liability from negligence or malpractice claims.
• Workers’ compensation for employees injured on the job.
• Product liability from defective products.
• Property covers theft, fire, or natural disasters.
• Commercial vehicle.
• Business interruption from disasters like fires or floods.
• Home-based business covering business equipment or liability.

People are often the deciding factor in whether a business succeeds. Show that you have the right team, or that you know how to fill gaps.

• Use a chart to plot the people in your business and their function. Show who is responsible for operations, finance, sales, and product development.
• List the current core management team, including name, role, qualifications, expertise, and track record.
• Explain retention and recruitment policies as staff turnover is costly. Explain how you retain key staff with flexible working, training, equity, or culture.
• Mention any advisory board members, accountants, legal advisors, or mentors. Even informal advisors strengthen your credibility.

A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis gives you a clear roadmap for how to position your business in a way that builds on your strengths, reduces your weaknesses, seizes new opportunities, and navigates potential threats.

• Strengths are internal advantages like a strong brand, proprietary tech, or loyal customers. Explain how you’ll leverage them.
• Weaknesses are internal issues, for example low cash reserves, small team, or lack of distribution channels. Show how you’ll address these points.
• Opportunities are future based action, for example an emerging trend, untapped customer group, or regulatory shift. Detail how you’ll seize them.
• Threats are external risks which you have little control over, such as new competitors or economic downturns. Write how you’ll reduce the impact.

Steps to conduct a SWOT analysis:

Download our SWOT Analysis Template.

• Categorize your insights and note any overlaps, such as a weakness that also presents an opportunity.
• Rank each factor in terms of importance and urgency.
• Develop short, medium, and long-term plans to capitalize on strengths and address weaknesses.

Market understanding helps direct your energy toward solving real problems for real people. Ask yourself who are your ideal customers, what do they care about most, who else is serving them, and how large is the opportunity in your niche or location?

Start by describing your typical customer. Consider age, income, lifestyle, values, and buying habits. Then think about their frustrations and goals. The clearer your picture of them, the better you can design products, pricing, and marketing messages.

Other market insights to gather:

• Industry trends from market reports, industry association data, or government statistics.
• Customer buying trends, for example, purchase frequency, seasonality, and decision triggers.
• The overall market opportunity and size of your opportunity.
• Explain your position in the supply chain. Are you disrupting traditional channels, or fitting into an established model?
• Existing customer loyalty and your retention tactics, for example loyalty programmes, excellent after-sales service, or community engagement.

Even the best product or service won’t sell itself. Your marketing and sales strategy is how you connect with customers and persuade them to buy. A strong strategy answers:

• Who you are targeting?
• Where you can reach them, e.g., social media, search, local ads, events?
• What message will stand out?
• How you turn interest into actual sales?

Think of it as a customer journey in steps:

Step 1.Awareness, when they discover you through ads, word of mouth, or search.

Step 2.Interest, such as browsing your website, calling, or asking questions.

Step 3.Decision as they compare you to others.

Step 4.Purchase where they buy, and ideally come back again.

Review the competition

By knowing competitor strengths and weaknesses, you can highlight areas where your product or service excels.

Key factors to examine include pricing strategies, distribution methods, brand messaging, and customer loyalty tactics. By understanding these elements, you can position your business more effectively.

Don’t forget about indirect competition. These are businesses that offer alternatives, not direct substitutes, but still meet the same customer needs. For example, a movie theater could be an indirect competitor to a restaurant.

Define your Unique Selling Proposition (USP)

Whether it’s price, quality, innovation, or customer service, your USP should be compelling enough to persuade customers to choose you over your competitors. To effectively define your USP, you need to focus on a few key steps.

• It’s essential to know what motivates your customers and why they choose your product or service. This insight helps you identify what truly matters to them and allows you to tailor your offering to meet their needs.
• Consider what you do exceptionally well and what customers value most about your brand. Is it your innovative approach, your product’s superior quality, or the level of customer service you provide? Understanding these factors will help you pinpoint your differentiators.
• Finally, your USP should be something that clearly sets you apart and gives customers a reason to choose your business over others. Possible USPs could include offering the lowest price, superior quality, unique products, or exceptional customer service. Once you’ve identified your USP, fine-tune it to create a clear competitive advantage that resonates with your audience.

A well-thought-out financial plan doesn’t have to be complicated. What matters most is that it’s realistic, clear, and based on actual assumptions you can explain. Whether you’re applying for a loan, attracting investors, or simply wanting to understand your business better, financial planning turns your ideas into a concrete roadmap.

Download our Cashflow Forecast template to predict ahead.

Understand your startup costs

If you’re launching a new business, start by listing everything you need to open the doors.This could include equipment or machinery, licenses and permits, marketing expenses, initial stock or raw materials.

Being thorough here helps you avoid surprises later.

Forecast your revenue

Next, think about how much money you expect to bring in each month. Revenue forecasting involves both optimism and realism. You want to aim high, but base your numbers on actual research, not wishful thinking.

Ask, how many units or services can we realistically sell each month, and at what price point? How will sales grow over time as we add customers or expand into new markets?

Always forecast revenue in multiple scenarios:

• Conservative, i.e., slow growth, minimal sales.
• Expected, which is a realistic projection.
• Optimistic, meaning faster adoption, higher demand.

This helps you prepare for both the ups and downs.

Forecast your expenses

Expenses come in two main types:

• Fixed costs that don’t change much month to month, for example rent, insurance, wages, subscriptions.
• Variable costs that rise or fall depending on sales, for example supplies, utilities, shipping, or contractor hours.

By comparing revenue to expenses, you can see whether your business is profitable on paper and identify which costs eat the largest share of your budget.

Report on past financials

Add a summary of past performance from your Profit and Loss Statement (revenue, expenses, net profit) and Balance Sheet (assets and liabilities) to give a snapshot of how well your business has fared over the last 2-3 years.

Explain any trends (positive or negative).

Find your break-even point

This is useful as a new start-up. Calculate the amount of sales you need to cover your costs. It tells you the minimum level of business you must reach before you start making a profit.

Example: If it costs you $10,000 a month to run your business, and your average sale is $600 with a $250 profit margin, you’ll need at least 40 sales per month to break even ($10,000 divided by the $250 profit from each sale).

Knowing this number gives you a clear sales target and helps you decide whether your pricing or cost structure needs adjustment.

Use our Break-even template to work out your own scenario.

Match pricing to your business model

When developing a pricing strategy, it’s important to consider various options based on your product, market, and business model. Here are some of the most common pricing methods:

• Cost-plus pricing, especially for manufacturing, wholesale, or contract-based supply chains, where transparency is required.
• Value-based pricing, where pricing is based on measurable outcomes (e.g., cost savings, efficiency gains). This is especially relevant in consulting, legal services, or tech platforms with measurable impact.
• Subscription and usage-based pricing, commonly used in SaaS, is ideal for companies with recurring revenue models and a need for predictable cash flow.
• Dynamic pricing, which adjusts in real-time based on demand, location, or customer profile. Airlines, freight services, and e-commerce platforms use this to optimize profitability.
• Performance-based pricing, where pricing is tied to results (e.g., percentage of sales growth, ROI targets), useful in B2B marketing, finance, and tech integration services.

Many businesses adopt a combination of different pricing models depending on their products and services. For example, software or subscription businesses might price based on demand forecasts, while others might mix hourly rates and fixed prices.

Overlooking legal requirements can sink a business faster than any competitor.

Licensing and permits

A business plan should outline the specific licenses, certifications, and permits required to operate. These might include food handling permits for a café, export licenses for a manufacturer, building consents for a construction firm, or professional certifications for services like accounting or healthcare.

By mapping these in advance, the owner signals awareness of compliance hurdles that could delay or shut down operations if ignored.

Employment law and workplace compliance

If the business has staff, the plan should highlight obligations under employment law. This may include employment agreements, fair wage requirements, workplace health and safety compliance, insurance, and pension or superannuation obligations depending on the jurisdiction.

Attention should also be paid to anti-discrimination policies, equal opportunity practices, and workplace privacy regulations. Outlining these commitments reassures stakeholders that the business understands how to operate responsibly and avoid costly disputes.

Contracts

A section on contracts should explain how the business will formalize relationships with customers, suppliers, and partners. Standard terms and conditions, credit policies, and dispute resolution mechanisms should be addressed.

Industry regulations and compliance frameworks

Many industries are heavily regulated and your business plan should show familiarity with sector-specific rules, codes of practice, or regulatory authorities. This signals you’ve thought beyond operations to the compliance environment in which you operate.

Data protection and privacy

With increasing scrutiny on data use, every business handling customer or employee information should show awareness of privacy obligations. The plan should outline how the business will comply with regulations such as the General Data Protection Regulation (GDPR) in Europe, state or federal privacy acts in the U.S., or local equivalents elsewhere.

This is your catch-all section. Include anything important that doesn’t fit elsewhere, such as sustainability policies, community partnerships, or long-term aspirations.

Putting it all together

When you complete each section, you’ll not only have a professional plan to show banks, investors, or partners you’ll also have a personal roadmap to follow. Remember, a business plan is not static. Update it at least annually, or whenever major changes occur.

Try starting with our Business plan template then trimming down to a one-page version for quick reference. Our Lean Business Plan one page plan is a handy roadmap that concisely lays out what your business does, how you find customers, and how you make money.

Business planning doesn’t need to be complex or intimidating. The goal is clarity, not perfection.

• Make a start.
• Clearly define why you’re writing the business plan (funding, internal guidance, investor presentation, loan application).
• Identify your primary audience (banks, investors, staff, partners, government grants) to determine the appropriate level of detail and formality required.
• Set specific objectives for what the plan should accomplish.
• Research your industry size, growth trends, and outlook
• Assess market opportunities and threats and gather data on pricing, distribution channels, and market entry barriers.
• Include scenario planning (best case, worst case, most likely) and set marketing budgets and expected return on investment.
• Assess business risks, develop mitigation strategies and set realistic timelines and milestones for each major initiative.