You know your business inside out. But when it comes to putting it all down on paper, it’s easy to feel stuck. Perhaps as a result, just 20% of business owners have a formal written business plan. And that means most businesses are missing out on a tool that could help them secure funding, avoid costly mistakes, and grow faster.
A solid business plan helps you turn your business ideas into action. It clarifies your goals and demonstrates that your business is viable. If you’re more of a business person than a writer, don’t worry. Business plans don’t have to be long or complex. They just need to communicate a clear, realistic plan that speaks to your audience – whether that’s a bank, an investor, or your own team.
In this article, we’ll explain what to include in your business plan, how to structure it, and the common pitfalls to avoid. By the end, you’ll have everything you need to create a plan that works for your business.
In a nutshell: A business plan is a document that turns your ideas into a clear, actionable strategy. Done properly, it can help you validate your approach, hit your goals, and even secure funding. To get the most out of it, keep it simple, focus on what matters, and update it as your business grows.
What is a business plan?
A business plan is a clear, written document that sets out your company’s goals, how you’ll achieve them, and your financial forecasts. Put more simply, it explains what you do, how you’ll make money, and how you’ll tackle challenges along the way.
While having a business plan is important, the process of creating one can be a valuable exercise in itself, as it forces you to research your market, test your ideas, and prepare for risks before spending your time or money.
The idea of a business plan traces back to the 20th century, but it became widely used in the 1980s to help raise funding as venture capital took off. Today, it’s a standard requirement if you want to secure loans, pitch to investors, or align your team.
To keep the business plan focused, many companies use the 3 Cs framework.
What are the 3 Cs of a business plan?
The 3 Cs form a foundational framework that helps keep your plan focused and actionable. They include:
Concept: Your business model, operations, and what makes it unique
Customer: Who your target audience is, their needs, and market size
Capital: Your financial requirements, projections, and funding needs
What does a business plan include?
For a business plan to be effective, it needs to clearly explain what your business does, who your target market is and why they’ll care, and how you’ll succeed financially.
It should be tailored to your business stage accordingly. For example, start ups might focus on opportunity, scalability, and market potential, while established businesses might highlight growth plans, efficiency improvements, or pivots.
Your business plan should also be tailored to your audience. For example, you might expand the financial and ROI section when pitching to investors, or emphasise cash flow and collateral when presenting to banks.
Typically, a business plan will include the following nine sections.
1. Executive summary
This is your elevator pitch where you’ll present a snapshot of your entire plan. Write it last so it accurately reflects everything else. This is often the only section some readers will skim, so keep it short and compelling.
Your business name, location, and mission
What you sell and who it’s for
Your unique selling point (USP): what makes you different?
Key financial highlights (eg projected revenue, funding needs)
Your ask (if you’re seeking investment or a loan)
2. Company description
Explain what your business does, why it exists, and who it serves.
Your legal structure (eg sole trader or limited company)
A brief history (if you’re not a start up)
Your mission: what problem do you solve, and for whom?
3. Market analysis
This is where you demonstrate the demand for your business.
Industry trends: is the market growing or shrinking?
Your target customers: who are they? What do they need? (Use demographics, behaviours, and real data)
Competitors: who else is out there? What are their strengths and weaknesses? (A SWOT analysis can help here)
4. Organisation and management
A strong team builds trust with lenders and investors, so explain who’s behind the company and why they make an effective team.
Who’s on your team? (Include short bios highlighting relevant experience)
Key roles: who does what?
Ownership structure: who’s in charge?
Operational workflows: how will the business run day-to-day? (eg suppliers, facilities, processes)
5. Products or services
This section is your chance to showcase what makes your business unique so investors and lenders can see exactly what you offer and why customers will choose you over competitors. Explain what you’re selling and the specific problem it solves – this will help build confidence in your business model.
Features and benefits: what does it do for customers?
Pricing: how much will it cost and why? (Not sure? Read how to price a product)
Lifecycle: is it a one-time purchase or a subscription?
Intellectual property: do you have patents, trademarks, or copyrights?
6. Marketing and sales strategy
How will you attract and keep customers with your marketing strategy and sales approach? Try to be as specific as possible to help visualise how you’ll turn interest into sales and build a loyal customer base.
Channels: where will you promote your business? (eg social media, Google Ads, partnerships)
Sales tactics: how will you convert leads? (eg discounts, free trials, direct outreach)
Sales forecasts: how many units or services will you sell, and when?
7. Financial projections (3-5 years)
This is often the most scrutinised section of a business plan. Lenders and investors want to see proof that your business is financially viable and that their money is in safe hands, so include charts or graphs to show trends clearly. To give yourself the best chance of securing funding or investment, include realistic assumptions that are based on market research and industry benchmarks.
Income statements: revenue vs expenses
Cash flow forecasts: monthly for the first year, then annually
Balance sheets: assets vs liabilities
Break-even analysis: when will you start making a profit?
8. Funding request (if applicable)
If you’re looking for investment or a loan, be clear about what you’re asking for and why.
How much you need (eg £20,000)
What you’ll use it for (eg equipment, marketing, employees)
Repayment terms (for loans) or ROI (for investors)
9. Appendix
A good business plan is clear and easy to read. So keep the main part of your plan simple and add any extra details, like supporting documents or charts, at the end, so you can bring them up if needed.
CVs of key team members
Legal agreements (eg contracts, leases)
Market research data or customer testimonials
Why do you need a business plan?
A business plan acts like a roadmap for your business. It can help you secure funding, make smarter decisions, and keep your team on track to meet your goals. Without one, you could run into avoidable problems or struggle to convince lenders and investors to back you.
In fact, businesses with a plan are 2.5 times more likely to secure loans and twice as likely to survive their early years. Yet in London alone, 54% of early-stage businesses operate without any plan at all.
Don’t leave your success to chance. Here’s why planning matters:
Secure funding and investment more easily: Lenders and investors won’t commit without a plan. They need proof you’ve thought through profitability, market demand, and how you’ll manage risks.
Make better strategic decisions: A plan keeps you focused on priorities, so you can spot cash flow gaps early, respond to competitors, and evaluate growth opportunities with confidence.
Manage risks more effectively: Researching your market and finances upfront helps you anticipate challenges, like seasonal dips or supply issues, before they become crises.
Track progress with clear goals: Setting measurable targets (eg “Hit £100,000 revenue by Year 2”) lets you monitor success and adjust your strategy if you’re off track.
Keep your team aligned: A shared plan makes sure everyone understands the mission and their role in it so you’re all working toward the same objectives.
How do you make a business plan?
Writing a business plan might feel like a big task, but breaking it down into steps makes it much more manageable.
Step 1: Get ready
Before you start writing, it’s worth spending time getting prepared.
Define what you want to achieve with your plan: Are you looking to secure funding, attract investors, or simply map out your business strategy? Having a clear goal in mind will keep you focused. For example, you might want to “secure a £50,000 loan” or “expand to two new locations”.
Research your target market: Understanding your industry, customers, and competitors will help make your business plan stronger and more convincing. You don’t need to spend lots of money on research – you could use free tools like Google Trends or ask your friends to send a survey to people that might be interested in your business.
Choose the right format for your needs: A detailed and comprehensive traditional business plan (15-50 pages) may work well if you’re applying for funding or pitching to investors. A shorter lean business plan (1-10 pages) may work best if you’re just starting out or need a quick, flexible roadmap to guide your decisions.
Step 2: Write it section by section
Now you’ve prepared, it’s time to start writing. To keep things simple, follow the order we outlined in the ‘What does a business plan include?’ section above – or use our template (see below) to work through this more quickly.
💡 Top tip: Leave writing the executive summary until last. It’s much easier to summarise your plan once you’ve worked through the details.
Step 3: Review and revise
Once you’ve drafted your business plan, take a step back and review it with fresh eyes. Proofread each section for clarity and correct any errors. It’s also a good idea to share it with a colleague, mentor or advisor for feedback – they may spot something you’ve missed or suggest ways to make it even stronger.
Visuals can make a big difference, too. Charts, graphs, and infographics help break up text and make your financial projections easier to understand at a glance. Ideally, you’ll want to work with a designer from the start. But asking a designer to review your plan can also help bring fresh ideas to the table.
Step 4: Tailor and update
Your business plan isn’t a one-size-fits-all document. So customise it depending on who’ll read it:
Investors want to see growth potential and a strong return on their investment
Banks are more interested in stability, cash flow, and your ability to repay a loan
Employees need clarity on the company’s vision, their role in achieving it, and how their work contributes to the bigger picture
Your business plan should be a living document. As your business grows and changes, so should your plan. Set a reminder to review and update it every few months to keep it relevant and make sure it continues to reflect your goals.
What are some top tips for creating a compelling business plan?
To give yourself the best chance of success, focus on clarity, credibility, and impact. A strong business plan should tell a convincing story, prove your business is viable, and show you’ve thought through every detail.
1. Start with a strong story
Grab attention in your executive summary with a real-world problem you solve. For example: “Every year, UK food businesses spend millions on single-use packaging that harms the environment and their brand. Our fully compostable food containers cut waste costs by 35% while boosting clients’ sustainability credentials”
2. Show off your team’s strengths
Investors don’t just back ideas, they back people. So highlight their key experiences (eg “Our CEO scaled a food packaging distributor to £3 million in revenue”) and any valuable connections (eg “Our advisor led sustainability initiatives at Unilever”).
3. Stand out with your USP
Your unique selling point (USP) is what sets you apart. Make it clear in your executive summary and market analysis. For example: “Unlike standard suppliers, we offer custom-branded, 100% compostable packaging with a 24-hour turnaround – something no competitor in the UK provides”.
4. Back up claims with data and visuals
A good plan has to be credible, so support your claims with clear evidence. For example, don’t just say your market’s big – prove it using a stat, like: “The UK sustainable packaging market is projected to reach £1.2 billion by 2026”. And swap long paragraphs for charts or graphs to make your plan easier to digest.
5. Be honest about risks
Every business faces challenges, and investors and lenders know this. So show you’ve done your research and have prepared sensibly by naming them (eg highlighting competition or potential cash flow challenges) and explaining how you’ll handle them. For example, “If material costs rise, we’ll lock in bulk orders with fixed pricing or switch to UK-based suppliers”.
6. Keep it short and to the point
Investors often skim plans first, so cut out any fluff and make every section count. Aim for quality over quantity.
What are some common mistakes that should be avoided?
When you’re making a business plan, the last thing you want to do is undermine your credibility with avoidable errors. Avoid these mistakes to build trust with investors, secure funding, and set your business up for success.
Unrealistic financial projections: Overestimating revenue or ignoring costs (like marketing or delays) could make your plan look naive. So base your numbers on real data like industry benchmarks, past performance, or conservative estimates. Include both best and worst-case scenarios to show you’ve thought ahead.
Skipping market research: Assuming “everyone will want this” will raise a red flag to investors and lenders. Understand your target customers by running surveys, interviews, or pilot tests to prove demand.
Vague goals: Saying “we’ll grow fast” or “become the market leader” isn’t enough. Set SMART goals (Specific, Measurable, Achievable, Relevant, Timely). For example, “We’ll acquire 300 customers through targeted Instagram ads in the next six months, at a cost of £20 per customer”.
Ignoring risks: Pretending there aren’t any challenges will make your plan appear unrealistic. Instead, list your top three risks (eg new competitors, cash flow gaps, supplier issues) and explain how you’ll handle them.
Poor structure: A weak executive summary or messy layout can turn readers off. Write the summary last – it should hook the reader in 1-2 pages. Lead with your USP and keep sections logical and easy to scan.
Not updating the plan: A business plan isn’t a one-and-done document. Aim to review it every few months and update it after big changes (eg after launching new products or securing funding).
Business plan template
Need a starting point? The table below shows what to include in each section of your business plan and how long it should be.
To save time and make sure you cover all the essentials, download our free business plan template.
Section | What to include | Length |
|---|
| Business overview, USP, financial highlights, funding ask | |
| Mission, legal structure, history, target customers | |
| Industry trends, customer segments, competitor SWOT | |
Organisation and management | Team bios, org chart, advisors | |
| Features, pricing, lifecycle, IP | |
| Channels, tactics, sales forecasts | |
Operational plan (if relevant) | Processes, facilities, suppliers, daily workflows | |
| Income statements, cash flow, balance sheets, break-even analysis | |
Funding request (if relevant) | Amount needed, use of finance, repayment terms | |
| CVs, legal docs, market research | |
What should you do after making a business plan?
You’ve written your business plan – now it’s time to put it into action. Here’s a clear, step-by-step guide to turning your plan into progress.
💡 Top tip: If you’re not sure which type of company to set up, read Sole trader vs limited company. Which is better?
Secure funding: Funding turns plans into reality. For business loans, explore your options with Tide’s network of lenders. If you’re seeking investors, start networking at industry events or through LinkedIn. Don’t forget to check GOV.UK’s Business Support Finder for grants that could give you a financial boost.
Launch and monitor: Start small by testing your product or service with a select group of customers. Keep a close eye on metrics like sales, customer acquisition costs, and feedback. Use this data to tweak your plan and improve as you go.
Build your team: Your team is the backbone of your business. So begin by hiring for the most critical roles (eg sales or operations) to ensure smooth day-to-day operations and steady growth.
Wrapping up
Creating a business plan is an important part of building a successful business and securing funding. It may look daunting, but approaching it step-by-step makes it manageable.
Here’s a reminder of the key points:
A business plan turns ideas into action by clarifying goals, validating your approach, and helping you secure funding
Keep your plan simple and focused by tailoring it to your audience – whether that’s investors, banks, or your team
Structure your plan with the nine key sections to ensure clarity and effectiveness
Back your claims with data, using research, charts, and realistic projections to build credibility
Avoid vague goals, unrealistic financials, and ignoring risks to keep your plan strong and convincing
Update your plan every 3-6 months to keep it relevant as your business evolves
FAQs
How long should a business plan be?
A traditional business plan for investors is usually 15-50 pages, while a lean start up plan can be as short as 1-10 pages. The important thing is to keep it clear and concise – investors typically spend just 10 minutes initially reviewing it, so every section needs to add value.
How long does a business plan take to write?
Writing a business plan usually takes 20-50 hours, spread over a few weeks. While it might seem time-consuming, it’s worth the effort – a well-structured plan could help your business grow faster than otherwise.
How often should you update your business plan?
A third of business owners find their original plans need adjusting within the first year. To stay on track, check your key metrics every three months and review major sections every six months. Do a full update once a year – or sooner if your business pivots, secures funding, or faces big market changes.
Are business plans for established companies and start ups different?
Yes. Start ups focus on proving their idea is viable and attracting investors, while established businesses concentrate on growth, efficiency, and past performance. Both need clear financials and market research, but the focus of their plan differs.
Can you use a business plan to secure funding?
Yes. In fact, it’s essential. Lenders and investors review your plan to check if your business is profitable, has market potential, and can manage risks. A strong plan can help boost your chances of getting funding, and most investors won’t consider you without one.
