Self-employment: How to write a business plan

What is a business plan?

A business plan is where you set out what you intend to achieve and how you plan to do it. It is more important if you are planning to acquire external investment to start your business but it's good practice to do one before you start up any business. This is because it allows you to set out your ideas, plan for the future and it gives you a realistic assessment as to whether your idea is viable and worth investment.

How do I write a business plan?

A business plan should include the following:

Business vision - Include details of the nature of your business, when it will start, which sector your business will operate in, competitor analysis and why your business is better.
Aims and objectives - Make sure to include what you want to achieve in your first year and where you want your business to be longer-term. Make your goals measurable, so that you can look back and assess whether you've met them.
Legal obligations - Consider any particular health and safety laws you might need to deal with, and any licenses and insurances you need to pay.
Market research - Outline any market research that you've carried out, it's important that you know your market and that you have a group of buyers for your product or service.
Competitor analysis - Include who your competitors are, what their strengths are and any weaknesses. Use this information as evidence to define how you will improve on what your competitors are offering.
Sales and marketing - Show how you will use your product or service to generate an income. For example will you sell your product or service over the internet, phone, face-to-face or use a combination of channels. Your strategy should be based on your market research and your customer's preference. You will need to outline your pricing structure, your costs and what your customers are prepared to pay. Find out more about marketing your business.
Financial requirements and forecast - Include estimated costs for setting up and running your business, sales forecast for the first year, profit and loss forecast and additional finance you will require.
Business risks - Your plan should show that you understand the risks associated with running your business and where it might fail.
Executive summary - Although this is presented at the beginning of your business plan, it is better to leave the summary until the end. The summary should be brief and include the main points in your business plan.