How To Write A Simple Business Plan

When it comes to businesses the proverb:

Failing to plan is planning to fail

is true, however if you look at many of the books or guides on how to write a business plan it can seem like a daunting prospect. You’ll be advised that a good business plan contains most if not all of the following:

• an executive summary, summarising the detail of the business plan;
• a written overview of the business’ aims (the business opportunity);
• a description of the market;
• a description of the businesses product or service;
• a marketing plan;
• a strategic plan and SWOT analysis;
• an overview of the management team and their experience;
• financial forecasts, including a cash flow statement and balance sheet for up to five years;
• a description of the exit strategy;
• appendices, such as the CVs of key management members, market research data or technical product information.

What isn’t emphasised however is that few entrepreneurs really need to bother creating such a detailed business plan. In fact unless you’re seeking investment from a professional investor (i.e. a business angel, venture capitalist or private equity firm) or looking to borrow a significant amount of money from the bank, writing such a detailed business plan is probably a complete waste of time. It might also be damaging to your future business, as having written such a detailed plan you may feel obliged to stick to it even when it turns out to be wrong – which is most of the time – the German Field Marshal, Helmuth von Moltke wrote that:

No battle plan survives contact with the enemy

The same applies for business plans, once you actually start executing the plan you’ll find that it’s wrong and you’ll need to adapt to survive. However that’s not to say that you shouldn’t create a business plan because as Dwight D. Eisenhower observed:

I have always found that plans are useless, but planning is indispensable.

I couldn’t agree more, when it comes to writing a business plan I believe you need to create a good, simple business plan, but the value of that plan is not the plan itself (which could be as short as a single page), but the process of creating the plan.

How to write a simple business plan

In my view a simple plan should answer the following questions:

• Why are you starting the business?
• What are you selling?
• Who you will be selling it to?
• How will you reach them?
• Why will they buy from you?
• What price will you charge?
• How much business do you need to break even? Is it realistically achievable?
• What are the risks?
• What can you do to minimise the risks?

So I would suggest you open a new text document, or grab a blank piece of paper and write down each question as a section title, then underneath answer it. Make your answers as detailed as you feel you need to and there you have it a simple business plan.

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• 1

  Excellent Post,

  This is great for anyone looking at starting a business that has been startled by the amount of processes and procedures seemingly needed to get started.

  I personally became aware of the different ways to form a business plan, when reading the stories of successful entrepreneurs, people like Richard Branson, Duncan bannatyne, Felix Dennis and many many others all concentrated on the core important questions like above and then put the energy into getting started.

  It’s very easy to consider starting a business and start looking at books, listening to other people and poking around the internet for information on getting started just to be over whelmed with the processes supposedly required before doing anything.

  It can be even simple than above i.e.
  - Is there a market?
  - can I make a profit?

  Ok so there could be many holes to pick with being so simple depending on your business idea- but my point is you can make it as simple or as complicated as you choose, but it will usually come down to the following: confidence in own abilities, self belief and your own risk level’s and usually the most important thing of all………… just getting it going!

  Good luck people!

  S.Breese

  S.Breese on December 5th, 2008
• 2

  The key thought here is the idea of embracing a business planning process rather than just writing a plan. The business plan will always be wrong but that’s not a reason to stop planning. Perhaps the mindset should be more about how to ‘live’ the business plan than how to ‘write’ the business plan.

  stevieboy66 on December 5th, 2008
• 3

  The reason books say you should write a detailed business plan is so that you get a better understanding of your business. Also the other reason for a good business plan is so that you can use it track progress and re adjust accordingly.

  Anon on December 5th, 2008
• 4

  S.Breeze,

  Agreed far to many people are left with the impression that business has to be complicated.

  stevieboy66,

  I think you need to write it down, otherwise it’s too easy to skip through the questions giving quick answers without putting enough thought into it.

  John on December 5th, 2008
• 5

  John – this is really good advice. I’m sure a lot of people avoid doing business plans because they sound way too complicated.

  And as you say, they only need to be like that if you’re going to the bank, or other investors to borrow cash. And some of the stuff is way over-rated. I know when I’ve taken business plans to the bank, all they’ve been interested in were the financials.

  Cath Lawson on December 6th, 2008
• 6

  Excellent post John thanks for that! Just writing up my business plan, not for finance but for my own need’s! has inspired me to think about the thing I really need to highlight! Thanks

  Moyo

  Moyo on December 6th, 2008
• 7

  Cath,

  True, most bank managers will only be interested in a quick look at the numbers and discussing how they will guarantee payment (i.e. securing the debt against assets).

  Moyo,

  Glad to help

  John on December 7th, 2008
• 8

  It also helps if you can think of the following:

  1. USPs – what is your unique selling point

  2. Are you creating a new market? If so what is the business need you are trying to meet

  3. Be innovative i.e. meet your Clients needs in a way which is different from your Clients

  4. Cashflow your business. Any good idea must stand the test of spreadsheet where you put some high level costs and profits down. Without this you idea may be great but financially worthless

  Murad on January 12th, 2009
• 9

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• 10

  Wow thats more like the information I was after not the 20 page long suggestions from other websites.

  Thanks

  Laurie on October 13th, 2009
• 11

  Excellent Post!This is great for anyone looking at starting a business.good job!

  Emily on June 8th, 2010
• 12

  Good Post, I really enjoyed it and will definately use the simple business plan. I have been avoiding to start my retail clothing business because I thought the business plan is so complicated and I would never get it right but now I can smile and give it a try.

  Thanks

  Juliana on July 26th, 2010
• 13

  Thank you for this, I need it for people with very little education, little English and little experience of bureaucracy, we can really build on this. It’s good that someone has taken the time to make it simple enough for non-business people!

  Simon Collery on July 31st, 2010