Business planning guide
How to write a business plan that still holds up when things get real
Most business plans are written once, for someone else, and never opened again. Here is how to write one you will actually run the business from: nine steps, in the order that makes each one easier.
Why most business plans end up in a drawer
They are written for a lender or an investor, so they describe the business as it should look rather than as it is. They bury the one thing that matters under forty pages of market statistics. And they are treated as finished, when the business never is.
A plan that works is shorter, more honest and easier to revise. It answers the questions an experienced outside advisor would ask in the first meeting. That is how this guide is built.
Before you write a word
Decide what the plan is for. A plan to raise money, a plan to run the next twelve months and a plan to prepare for a sale are three different documents. Pick one. Everything below gets easier once you know who will read it and what decision it should help them make.
Nine steps to a business plan you will use
Step 1: Start with the decision the plan serves
Write one sentence that finishes “This plan helps me decide…”. It might be whether to hire, borrow, expand, step back or sell. A plan with no decision behind it turns into a description of the business, and descriptions do not change anything.
Step 2: Describe who you serve and what changes for them
One paragraph: who the customer is, the problem they have, and what is different for them after they buy from you. If it takes more than a paragraph, the business is usually trying to serve too many people at once.
Step 3: Say plainly how the business makes money
List what you sell, what you charge, what each sale costs you to deliver and what is left. This is the step where most owners find one offer carrying the whole business. It is better to see that on paper than to discover it in a quiet quarter.
Step 4: Build the numbers, and watch the cash
Forecast revenue and costs for the next twelve months, then add a 13-week cash flow forecast. Profit and cash are different things: a business can be profitable on paper and still miss payroll in week seven. The cash view is the one that keeps you safe.
Step 5: Learn about your customers, own one idea, then choose how to win them
Do not guess what customers think: ask five recent customers what they were trying to fix, what nearly stopped them buying and how they would describe you to a friend, and write down their words. Then decide the one idea you want to own in their minds, such as the fastest, the specialist or the safest choice, and who you are clearly different from. Only then pick no more than three ways customers will find you and say how many conversations each needs to produce a sale. “Twenty qualified conversations a month at a one-in-five close rate” is a plan. “More marketing” is not.
Step 6: Map what only works because you are in the room
List every task, decision and relationship that stops if you disappear for two weeks. This is the part of a plan most owners skip, and it is the part that decides how far the business can grow. Each item needs an owner, a written process, or a deliberate decision to keep it with you.
Step 7: Write down what is still running on a handshake
Supplier terms, the key employee who has never had a contract reviewed, the family arrangement, the understanding with a partner. Anything important that depends on goodwill alone belongs on this list, with a note on how it will be put in writing.
Step 8: Pressure-test it: what could go wrong, and your safeguards
Name the five things most likely to knock the plan off course: a lost client, a late payment, a key person leaving, a cost that rises, a plan that depends on one assumption. For each one, write the early warning sign and what you will do. This takes an hour and changes how confident the whole plan feels.
Step 9: Set the next 90 days, the measures and the review rhythm
Choose three to five measures you can check in minutes, set the actions for the next ninety days and put a review in the diary now, quarterly at a minimum. A plan that is reviewed becomes a management tool. A plan that is not becomes a document.
Stress test the plan with the Four Questions
When the draft is done, put it through the four questions we ask every owner we work with:
- Where does the money actually go?
- What only works because you are in the room?
- What is still running on a handshake?
- What decision is coming that the business is not ready for?
If you cannot answer one of them in a sentence, that is where the plan needs work first. Not sure where you stand? The ten-minute Business Health Check gives you a personal read on all four.
How long should a business plan be?
Short answer: as long as it takes to cover the nine steps, and no longer. Most owner-led businesses need between eight and twenty pages, with a one-page snapshot at the front.
Free template
Skip the blank page
Our business plan template follows these nine steps, with prompts under every heading and the Four Questions stress test built in. It is free, and there is nothing to sign up for.
Business plan questions, answered
What should a business plan include?
A useful business plan includes a one-page snapshot, a description of the business, your customers and market, your offer and pricing, how you win customers, how the business runs day to day, the people, the financial plan, what could go wrong and your safeguards, and the milestones and review rhythm that keep it alive.
How long should a business plan be?
As short as it can be while still covering the nine steps above. Most owner-led businesses need between eight and twenty pages, with a one-page snapshot at the front, because the snapshot is the part people actually read.
How often should I update my business plan?
Review it every quarter and revise it whenever a major decision lands, such as a new hire, a large client won or lost, a change in pricing or an approach from a buyer. A plan that is only updated once a year is out of date for eleven months of it.
Do I need a business plan if I am not raising money?
Yes. The most valuable plans are written for the owner, not the lender. They show where the money goes, what depends on you and what decision is coming, which is exactly what you need to run the business with confidence.
Can you help me write or review my business plan?
Yes. If a plan needs a second set of eyes, a confidential conversation is the easiest place to start, and the Diagnostic is the fixed-scope way to test it against the Four Questions with someone outside the business.
Let’s talk
Want a second set of eyes on your plan?
A confidential conversation costs nothing and commits you to nothing. Tell us where the plan is stuck and we will tell you plainly whether we can help.