How to write a business plan

Authored by Hiscox Experts.
7 min read
person writing
Creating and following a sound business plan can help increase your small business’ chance of success. The beauty of the business plan is that it can be tailored to suit your goals, budgets, and means and provides you with a clear plan of action.

In our guide, we’ll provide you with all the materials you’ll need when looking at how to make a business plan.

What is a business plan?

A business plan is essentially an outline of your business, detailing objectives, budgets, and strategies. It’s also where you can make estimates and forecasts for the upcoming year or quarter [1].

Above everything, your business plan should be personalised, flexible, and an honest reflection of your goals and progress. It is a useful document to consistently reflect upon, to identify problems and shortcomings, as well as measure your successes [2].


Why do I need a business plan?

Having a business plan enables you to:

  • Secure loans and investment – banks will require you to have a business plan before they agree to lend you money [1]. A business plan also helps attract investors
  • Convince customers and clients – your business plan is not only for internal use, as the KPIs (key performance indicators), goals, strategies, and purpose outlined in the document help to sell your brand to customers [2]
  • Set milestones and identify issues – an effective, flexible business plan should help you to work towards business milestones, while also encouraging you to reflect on and spot any issues
  • Build a clear start-up plan – having a concrete, yet flexible, business plan means you’ll be prepared for any problems.


Who is a business plan aimed at?

There are two groups that a business plan should be aimed at [3]:

  • Internal audiences – for example, company employees
  • External audiences – for example, potential investors, stakeholders, and banks.

For internal teams, including management, a business plan sets common goals and ensures that everyone within the company understands your brand vision.

A business plan also aims to sell your business to potential investors, banks and stakeholders. This is not only supported by your subjective goals, KPIs, and business ‘story’ but, importantly, objective analysis and data that supports these claims [4].

A bank will want to ensure that you will be able to generate enough profit to pay back the price of your loan [5].


What’s the best format for a business plan?

Generally, there are two types of business plan that you may want to consider. They are a traditional business plan and a lean start-up business plan [3].


Traditional business plan

A traditional business plan is a much more lengthy, detailed document which goes beyond just outlining business propositions and goals. A traditional plan might include [4]:

  • Industry and market analysis – data gathered from industry examples and competitors that accurately reflects how and where you sit in the market
  • Budgets and finances – researched projections as to what your profits may look like in X amount of time
  • Further documents – these include any legal documents, such as incorporation letters, trademarks, and business partnership agreements.


Lean start-up business plan

A lean start-up plan is briefer and mainly used by new businesses. You might want to include the following information [3]:

  • Business summary and proposition – this should include who you are, what you do, and what value you bring
  • Source of finances – this section explains how you plan to generate profits, and who/where you plan on making this money from
  • Customer and client summary – this is where you discuss who your brand audience is and how you intend to target them.


What should I include in a business plan?


Executive summary

This is the first thing someone reads when they pick up your plan [6]. The aim here is to efficiently outline who you are, what your business does, who you are targeting, key financial projections, and your mission statement.


Company overview

Think of this as your business profile. It should give a clear picture of how your business operates and can include information such as your [7]:

  • Registered business name
  • Registered business address
  • Contact details
  • Business structure – for example, the owners, directors, stakeholders, and employees.


Product and service details

Here is where you’ll outline the products and/or services your business offers. You’ll also need to share details about where they sit amongst competitors and what value they bring.

You may also want to include an overview of your sales strategy, including how you plan to distribute your products and how everything is priced.


Market and audience profiles

It’s a good idea to create a customer or client profile that includes everything you know about your target demographic, with data garnered from market analysis.

Here, you can also discuss how you plan on marketing and selling your products and services to them, the avenues you might choose, and the strategies you’ll put in place [5].


Competitor analysis

You can learn a lot from fellow businesses’ successes and failures, with this analysis also helping you to understand where you fit in among the industry crowd.

Competitor analysis can enable you to identify gaps in the market and spaces that already seem oversaturated.


Outline of operations

Detail any relevant procedures, logistical operations and fulfilment strategies – which can be constructed in a timeline document.

As you’re discussing your product/service timeline, it may also be a good idea to include information on any suppliers or manufacturers you intend to use.


Marketing plan

Your marketing plan should cover everything from how you plan to launch, to getting your brand out there. You may need to outline the outlets you intend to use [6], your marketing budget, and any relevant campaign and PR plans.

Learn more about digital marketing with our guides.


SWOT analysis

A SWOT analysis aims to identify strengths, weaknesses, opportunities, and threats within your business operations [8]. Carrying out a SWOT analysis, and integrating it into your business plan, helps identify avenues for continued growth.


Financial plan

A review of your finances should be at the heart of your business plan. You’ll want to include data-backed, detailed financial predictions to ensure investors and banks get a realistic picture.

Within this, you may want to detail:

  • Sales and cost forecasts
  • Cash flow
  • Details of capital
  • Balance sheets
  • Any further assets and debts [9].



Finally, the appendix section might include:

  • Extra research or data analysis that you feel would be useful for investors and banks
  • CVs of key staff members to provide more insight into your business structure [10]
  • Legal documents – such as copyrights, licences, and patents
  • Any relevant product or service details that were not included in the preceding sections. This could include images, for example [11].


5 tips on how to create a business plan


1. Keep it brief

People who read your business plan want to get all the necessary information as efficiently as possible. Stick to the point and the primary mission of your brand.


2. Consider your audience

It’s important to provide transparency to both external parties and employees. Remember to keep things objective, as those considering funding your venture will want to see solid, data-backed claims.


3. Do your research

You’ll want your business plan to be supported by elements such as stats, graphs, studies, and further objective documents – which will help to back up promises and projections.


4. Know your purpose

Each section should demonstrate that you are confident in who you are, what you do, and who your target audience is – and should tie into your mission statement.


5. Map out your strategy with a single-page template

Consider using a single-page template to concisely spell out your strategy. Templates like the SMART strategy board can help you get to the point quickly [12].


How to make a business plan: FAQs


What is the difference between a business plan and a marketing plan?

A business plan summarises a company, what they do, and how they work. It mainly defines goals and financial targets, backed by objective data.

On the other hand, a marketing plan focuses specifically on the role marketing will play in helping a company towards the targets outlined in a business plan. It can include discussions on marketing budgets, campaigns, and strategies [13].


What are the different types of business plans?

Generally, for-profit businesses follow two types of business plan: a traditional or lean start-up plan [3]. A traditional business plan provides a more in-depth, data-backed look at a company. A lean start-up business plan is used by new businesses and provides a shorter, more precise summary.

However, not-for-profit organisations may follow a non-profit business plan [14]. As their focus is not necessarily on generating profit, the plan’s audience will be inherently different. For-profit investors will look to see how a business can successfully and sustainably generate funds, whereas non-profit investors are more invested in a cause.


At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.


  1. GOV.UK, "Write a business plan".
  2. Start Up Donut, "Essential guide to writing a business plan".
  3. Investopedia, "Business Plan: What It Is, What's Included, and How To Write One".
  4. FSB, "What is a business plan?".
  5. Experian, "How to Make a Business Plan for a Loan".
  6. British Business Bank, "How to write a business plan".
  7. The Balance, "How To Write the Company Summary in a Business Plan".
  8. Investopedia, "SWOT Analysis: How To With Table and Example".
  9. Forbes, "Basics Of A Business Plan Financials Section".
  10. Prospects, "Writing a successful business plan".
  11. Entrepreneur, "11 Unexpected Things to Include With Your Business Plan".
  12. Hiscox, "A simple way to prepare your business plan on a single page".
  13. Investopedia, "What Is a Marketing Plan? Types and How to Write One".
  14. CFI, "Non-Profit Business Plan".
Hiscox Experts

The Hiscox Experts are leaders valued for their experience within the insurance industry. Their specialisms include areas such as professional indemnity and public liability, across industries including media, technology, and broader professional services. All content authored by the Hiscox Experts is in line with our editorial guidelines.