You'll need to write a business plan if your business is looking to raise funding:
- from a bank loan
- from grants
- from investors
- to run your business day-to-day
- to rent or purchase equipment
- to develop an idea
What to include in your business plan
When writing a business plan you should include:
- your company's details
- an executive summary
- information about your business and management team
- information about your products, services and your market
- financial information
- what finance you're looking for
You can find a template business plan on the Business Gateway website.
This section of your business plan should include details of your business's trading address.
You should also include any professional advisors your business uses, for example an accountant or solicitor.
If your business is a limited company, you'll also need to include details of your registered offices and company number.
An executive summary should give an overview of each section of your business plan.
It's the part potential funders will read to decide if they're interested in reading your entire plan.
It's important your executive summary is well written to capture the interest of potential funders.
Information about your business
This section of your business plan will give a summary of:
- what your business does
- the history of your business
- your current and future plans
Potential funders, like banks and investors, will look at this section to see how your business has performed in the past. They'll also want to see if your business is using the best practices for the future.
Your business's 'operations' are the way it makes and prepares a product or service.
This section of your plan should give details on things like:
- raw materials
- your facilities – location, size and cost
- key equipment – its function and age
- your distribution network
You should also include details if your business owns intellectual property on any processes or patents on any technologies.
Potential funders will use this section to see if your business can sell products or services in a form customers will like, as this could make your business successful.
Who manages your business
You'll need to give details of who is involved in managing your business.
This will be different for every business. For example, you could be managing a business on your own, or it could have an entire management team.
In particular, funders will be interested in finding out if you or the other people managing your business have the correct skills and experience to deliver your business plan.
You should give details of anyone involved in managing your business, including their:
- role in your business
- skills and experience
Businesses with management teams
If your business has a management team you should also give details of the team structure and any lines of reporting.
Information on products or services
This section of your business plan should describe what your business sells.
This will include details of any:
- unique selling points
- intellectual property
- patents or trademarks
You should try to describe your products or services as specifically as possible.
You might also want to include photographs, diagrams or illustrations.
Businesses selling more than one product or service
You should give details of all the products or services your business sells. This will help potential funders to see if your new product or service either complements or adds diversity to your existing business.
Giving details of all your products or services will help potential funders to see these opportunities and might improve your chance of getting funding.
Your market and customers
You should give details of the expected market for your products and services. This means who you think will want to use or buy what your business produces.
This should include:
- the size of your market and which part you want to target (for example Scotland, the UK, Europe)
- how you think the market will grow
- any competitors you have
- how you'll meet the needs of your customers
When describing how you think the market will grow, try to reference an independent source, for example regulatory bodies or recognised industry experts.
This section should also explain how your business will get past any problems that could prevent you from reaching your market, like supplier problems.
You should give details of any products, services or providers you expect to be your main competitors.
Include products or services that you know are currently being developed. You should try to show how your business's own product or service is different and why customers will choose yours.
How you will sell your product or service
You should also use this section to detail your business's sales strategy.
This will include your plan for:
- marketing and advertising
- sales process
Financial summary and funding requirements
Your financial summary helps potential funders understand the opportunity they have by giving funding to your business.
It will include information on your business's historical performance – your profit/loss and balance sheet. It should also include your financial forecasts for the next 3 years – your cash flow, profit/loss and balance sheet.
Your financial forecasts should detail any assumptions you have made and how your business will respond to changes in your forecast, such as if you sell more or less.
For example if you've made the assumption your turnover will grow, you could say if this is because of market growth or price rises.
You can use information from other parts of your business plan to support your assumptions.
This section of your business plan gives information on:
- the total funding your business needs
- where you expect to find this funding from
- whether you need it all in one go or at intervals
You should explain what you need the funding for and how it will benefit your business.
If your company has applied for funding from a range of sources you should include details of this. For example, a bank loan of £5,000 or grant funding of £2,500.
You can find more information on writing business plans on the Business Gateway website.