Writing and Updating a Business Plan

Whatever your business is, a detailed business plan is vital. Whether you’re a lone sole trader or a large company, a business plan lays the foundations for your success. Not only that, it’s also an invaluable guide when it comes to navigating your growth and evolution.

A business plan documents so many important things: the business’s reason for existing, your key goals, your vision, your mission. It sets out the business’s strategy for how you plan to hit your goals. It considers the market you’re in, your target demographic, and how you plan to tap into this audience.

As well as looking at where you see yourself and your business in several years’ time, it factors in current financial information and forecasts.

Everybody (or at least most business owners) knows how crucial it is to create and maintain a solid business plan. However, when it comes down to actually putting a business plan together and knowing what information to include, many could benefit from some guidance.

Understanding when to update a business plan is another area that often requires some expert support – and we’re here to provide just that.

What information should you include in your business plan?

A business plan will be slightly different from one business to another – that goes without saying. However, there are several key components that form part of most business plans.

Executive summary

This is where you summarise all the information you will cover in your business plan, outlining what you do, your plans for the future and how you aim to get there. This is also an appropriate place to outline any funding requests you’re putting forward, before expanding on them further within the plan.

Although this part will sit at the front of your business plan, it’s often the section that most people write last. It’s easier to ensure all bases are covered once you’ve completed the main body of your business plan.

Business description

This is similar to the executive summary but with more specific information such as:

  • What products and/or services the business offers
  • What gap in the market it is trying to fill
  • Who your target audience is and how you appeal to them
  • What makes you different from your competitors

Financial details

There should be a section in your business plan which details your finances, such as your income statement, cash flow forecast, and balance sheet. You should also include a realistic sales forecast and advise on how you plan to achieve those numbers.

Use of Funds

If you’re using your business plan for a funding, loan, or investment application then your business plan should include a ‘use of funds’ section. This should detail how you plan to use the money you’re asking for, outline precisely where it will be spent, and demonstrate your strategy for repayment.

Your business plan should also include…

As well as the big picture dream, and the nuts and bolts of getting there, your business plan should include:

  • Details about your marketing plan and promotional strategy.
  • What insights you’ve learnt from carrying out competitor analysis and market research.
  • Information about operations and management – that is, how you run your business.

The main thing to remember is that your business plan should strike the balance between being thorough enough to pre-empt most questions, but concise enough that people will actually read it!

Somebody reading your plan should be able to understand what your business does, what your goals are, and how you hope to achieve them, without you needing to be there to clarify.

As long as you remember that and stick to the core components above, you’ll be on the right track.

Can an accountant help with your business plan?

Yes, an accountant can offer invaluable support to your business plan – whether that’s the first iteration as you launch the business, or further down the line as you revise and refresh.

Not only can an accountant offer expert guidance around things like your business model and legal structure, they’re also invaluable when it comes to creating accurate and realistic financial forecasts.

An accountant will be able to assist on the financial segment of your business plan, ensuring that your income statement, cash flow forecast, and balance sheet are all in good shape.

Plus, supplementing your business plan with the input of a qualified accountant will be extremely appealing to any investors you’re hoping to secure funding from.

How often should a business plan be updated?

There’s no specific timeline for updating your business plan because the answer depends largely on circumstances and activity. In other words, revise and update your business plan as and when there is a need to do so.

Some of the most common reasons for requiring a business plan update include:

  • To incorporate and acknowledge new market insights (such as audience demands) that impact your strategy, mission, or financial forecasts.
  • Whenever you complete new competitor analysis that will, again, impact all the factors mentioned above.
  • When the business is moving in a new direction, meaning things like strategy, vision, mission, and even financial status go through a period of flux. This might include product innovations, new services or even a re-brand of the business identity.
  • When applying for new funding.
  • When running a recruitment operation to employ senior people into the business

That said, general guidance suggests that even without a key motivation for doing so, it’s a good idea to revisit and refresh your business plan once a year.

Whatever the reason, maintaining a strong business plan is key because it is an essential tool when it comes to growing the business and measuring your success along the way.

Hopefully you’re now feeling more clued up on all things business plans and ready to take yours to the next level.

Find more help and support for your London-based business in our information centre.