Creating a Business Plan can certainly seem like a daunting task, with questions of where to start and what to include putting many off starting. Whilst there’s no set way, writing a plan that works around a few initial headings can be a great way to collect together thoughts and structure an approach.
To begin with, it’s perhaps worth considering what a Business Plan is and what you hope to achieve in creating one? Simply, a Business Plan is quite literally a document that describes your business in its market context and what you plan to achieve in the future. Beyond this, the plan can set out a number of key strategic objectives, vision and values, outcomes and impact, and information regarding sales, marketing and communications planning, as well as all manner of financial forecasts.
For many, this might sound like an uphill struggle, incredibly mundane and pointless (all at the same time!). This is completely understandable; however, business planning should be seen as an exercise in thinking, with the creation of a plan offering an enormous opportunity to clarify business ideas, spot and solve potential problems in advance, set out goals, and measure progress - all of which are great for personal / team motivation and for impressing potential clients, funders, and investors.
Ultimately, it’s really important that a Business Plan reflects the leadership style and spirit of the business. That said, below we’ve given some generic headers that we believe are essential for most good Business Plans.
Executive Summary: This section should contain a brief summary of everything covered in the Business Plan. It should provide a short overview of the full Business Plan, so that individuals understand it all, without needing to read the detailed report. This should be the last thing you write.
Introduction: You can use this section to provide a general introduction to the Business Plan. It is used to set the context and outline what is (and isn’t) in the remit of the Business Plan. This section is optional, however, we'd recommend completing one as a means of ordering thoughts.
Context: This section should provide an overview of your business to the reader. Key content (often ordered under subheadings) in this section might be a short history, business vision, mission and values, and general organisational aims and objectives. Nonprofits can also include their Theory of Change model in this section.
Situational Audit: The situational audit is a really important establishing component of any Business Plan as it allows you to understand where you are and what your superpowers might be – and if the wind is at your back or not. Typically, this section might include a SWOT (Strength, Weaknesses, Opportunities, and Threats) analysis as well as a PEST (Political, Economic, Sociological, and Technological) analysis. A good plan will consider the market in which the business operations – peers and competitors, partners and collaborators.
Objectives: This section should be used to clarify a number of key organisational goals for growth as well as outlining a number of strategic priorities for the next year, 3-years, 5-years, etc. At Hodwell Associates we tend to think that looking three years out is just right for most businesses. Objective Key Results (OKRs) should be used to help clearly identify what needs to happen to reach future plans and goals – specifically, they need to be SMART (goals) if they're going to help guide you (Specific, Measurable, Achievable, Relevant and Timely).
Strategy: There are many books written about strategy so it’s easy to get thrown by this. It all boils down to a high-level summary of how you are going to approach the market. If someone asked you to sum up the direction for your charity over the next three years in a single sentence, what would you say?
We’ll write more about this in another blog. For now, you could think about wanting to adjust your services to serve more deeply or more widely – or differently. You may want to grow your income (doesn’t everyone?) but broadly how and from where, and why?
Your priority may be to stabilise the ship, build capacity or increase efficiency? Try to choose one big important high-level goal and then build the next stages of the plan working in service of that.
Planning (Fundraising/ Operations/ Marketing/Communications): Unlike other sections, the content here is likely to be dependent upon the goals and priorities of a given organisation. That said, it is important that the planning section links in with the information gathered in the situational analysis and with the objectives outlined in the strategic priorities section.
We'll write more about this section in other blog posts but see what you can achieve by writing down information (with some metrics if you can) about the current (‘as is’) and desired future state (‘to be’) of your business operation and support functions. What do you do now and what would you like to be doing? How much income do you have from what sources, and how much will you need and ideally from where? What messages are you sharing and what would you like to be projecting?
People and Resources: All good organisations require people. As such, it's important that this section includes a good overview of the existing team, resources, and tools (an ‘as is’ and ‘to be’ organisational chart will help to marshall your thoughts). Furthermore, this section should include information regarding how the business plans to build and maintain capacity going forward. Nonprofits should think creatively about volunteers as well as employees and resources that can be sourced from funders and other stakeholders.
Action: We love business plans that have at least started the job of feeding all this great ‘where are we going and how are we going to get there’ thinking into a bit of an action chart. It could be a Gantt, or something fancy like Asana – or just an Excel spreadsheet. Think: who is doing what, starting and finishing when, and is there any budget available for that?
Control: This is the section where any of the metrics that we spoke about earlier should be logged so you can see how you’re doing against your plan. Did you extend your services to Lincolnshire? Did you raise 20% more income from grants? Did you find 2 more Trustees? Were beneficiaries 10% more satisfied with your provision?
Risks and Assumptions: What risks do you foresee in implementing your plan and what assumptions have you made in writing it?
Appendix: This section is more useful than you may realise. When you are at the start of writing your business plan and don’t know what to do with all the disparate information that you’ve gathered to try and make a start – just dump it all in the Appendix. That way it’s there if you need it, and you can keep the business plan as short as you can by referring to more detailed information that sits in here.
Whilst only a guide, we hope these headings provide a good starting point to your Business Plan. That said, if you're a little stuck we’d be more than happy to help build out these sections and develop ideas with you. Stephen can be reached by email stephen@hodwell.co.uk and always enjoys a good conversation regarding business structure, fundraising planning, and setting strategic goals.
And here’s a list of other useful resources:
Princes Trust: Business Plans [https://www.princes-trust.org.uk/help-for-young-people/tools-resources/business-tools/business-plans].
British Business Bank: Cash Flow Forecast template [https://www.startuploans.co.uk/cash-flow-forecast-template/].
British Business Bank: Business Plan templates [https://www.startuploans.co.uk/business-plan-template/].
Start Up Donut: Essential guide to writing a business plan [https://www.startupdonut.co.uk/business-planning/write-a-business-plan/essential-guide-to-writing-a-business-plan].