How to write a simple business plan

Basically, it involves answering some key questions about your business:

• Your objectives - where do you want your business to go?
• Your tactics - how will it get there? 
• Your budget - what will it cost?

There’s no one set way to write a business plan. The secret is to keep it short and simple. Writing a business plan is easier than most people think - and to make it even easier, you can use our Business Planning Template to guide you through the process step by step. 

Yes you do, because it can make the difference between success and failure. For example, research published in the Harvard Business Review shows that start-up businesses with a written business plan were 16% more likely to succeed than those without one.—

Having a business plan gives you direction, challenges you to really think through your ideas, helps you prioritise scarce resources and builds your credibility.

Our Business Planning Template makes it easier to write your business plan. It breaks your plan down into sections, with tips and examples at each stage. You can enter information as you go and save your plan to print out and update later.

Below we’ll explain the key information you should include in your business plan, using the structure in our template as a guide.

Think of this as your ‘elevator pitch’ – imagine you’re in an elevator with someone you want to invest in your business, and you only have until the elevator gets to their floor to convince them. You need to get straight to the point and describe what your business (or business idea) is about in no more than 3 or 4 short paragraphs.

It’s usually a good idea to write this last, once you’ve thought through the rest of your plan - but it’s probably the most important part of your business plan. Being able to describe your business clearly and succinctly to others is the first step to success.

Where is your business going? What do you want to achieve? Write them down. 

Your objectives should be realistic, otherwise you’ll lose motivation. They should also be SMART:

• Specific – if the goal is too general, you will lose focus.
• Measurable – so you can tell whether you’re on track or need to make changes.
• Achievable – large goals can seem daunting, so break them down into smaller steps.
• Relevant – your objectives should directly contribute to your overall business goals.
• Time framed – having a deadline provides urgency and focus.
  
  

Examples of SMART goals might include:

• Financial objectives – to achieve turnover of $x and profits of $y by the end of the financial year.
• Strategic objectives - to gain two corporate customers by the end of the year.
• Operational objectives - to increase productivity by 20% by the end of the second year.
• Sales objectives - to increase e-commerce sales by 10% by 1 June next year.
  
  

Once you’ve established your goals, identify who is responsible for achieving them.

Describe exactly what you’re offering, and the key features of your products and/or services. How do they compare with what your competitors are offering? How will you price them? See our article on how to defend and justify your pricing.

A SWOT analysis outlines your Strengths, Weaknesses, Opportunities and Threats. This helps you compare your business against your competitors, build on your strengths and opportunities, and mitigate your weaknesses and threats.

When you’re doing your SWOT analysis think about both internal factors (e.g. staffing) and external factors (e.g. market or demographic trends), and above all – be honest.

This is also a good time to think about your competitive advantage. Why should your customers buy from you rather than your competitors? For example, are you competing on price, service, aftersales support, unique knowledge and expertise, or a different brand proposition? If you don’t know, your customers certainly won’t.

Who are you targeting your products or services at? How old are they, where do they live, what are their interests? Understanding your customer will help you shape your products and marketing in a way that is most likely to reach them and appeal to them.

How will you let people know about you and what you offer - for example, through advertising, direct marketing, social media, PR campaigns, or some combination? How can they buy from you - online, through distributors, or your own retail outlet(s)? Set some sales targets and plan your strategy to achieve them – e.g. will you concentrate on selling to new customers or selling more to existing customers? Will you need to train your staff in new sales methods? Set a budget for achieving your sales plan and be clear about how you will measure success.

What assets and/or equipment will you need to get your business up and running and keep it operating? These one-time expenses are also known as Capital Costs, and include purchases of buildings, land, vehicles, machinery and equipment.

Your financial forecasts are one of the most important parts of your business plan. They show how much money you need to make to cover your operating expenses and make a profit. They’re also critical if you’re approaching investors. Your business plan should contain some forecasts, including:

• A cash flow forecast (use our cash flow forecast calculator and our guide on How to forecast cash flow accurately)
• A balance sheet forecast (use our guide on Understanding your balance sheet)

If you’re a start-up, calculate how much your business will need to get going, by creating a schedule of the assets and equipment required.

Your accountant or an ANZ Business Specialist can help you review your financial assumptions and ensure they’re realistic.

Having great people is key to the success of any business. How will you attract, retain, reward and train the right people - and ensure you get the best from them?

No market stays the same. Your business will face different challenges and opportunities over time. That’s why it’s essential that you regularly review and update your business plan – at least annually. Put aside some time in your diary for this, otherwise it will get lost amongst all the other things you have to do.

Check out our ANZ 5 week Business Boot Up. It’s a step by step guide to starting your business, with great tools, information and resources to help you along the way.

ANZ also offers a series of free Business Workshops on all aspects of running a business (including How to write an effective business plan). To find out what’s on in your region and to register for a workshop.