How to Write a Business Plan: A Start-up Guide

Most people sit down to write a business plan because someone has asked for one. A bank wants it, a lender wants it, or a partner wants to see the idea on paper before putting money in. That's a fair reason, but it undersells what a plan is for. Written properly, it is the cheapest way to find the holes in your idea before customers, suppliers and the taxman find them for you.

This guide walks through what a start-up business plan should contain, how to research it without spending a fortune and how to make the numbers stand up. You don't need a business degree to write one. You need some honest research, a spreadsheet and a few evenings.

Who is the plan for?

Before you write a word, decide who will read it. The answer changes the length and the tone.

• You. A plan for your own use can be short and blunt. Its job is to make you think through pricing, costs and how you will actually win customers.
• A lender. Banks and loan schemes, including the government-backed Start Up Loans programme, will usually want a business plan alongside a cash-flow forecast. They mainly want to know whether you can repay, so the financial sections carry the most weight.
• An investor or business partner. They will want to see the size of the opportunity, why you are the right people to run it and how they get a return.

Whoever it is for, aim for something a busy reader can get through in one sitting. For most new small businesses that means somewhere between ten and twenty pages, with the financial spreadsheets attached at the back.

Do the research first

A plan built on guesswork reads like guesswork. Spend time on research before you start writing, and keep a note of where each figure came from so you can show your working later. Three questions matter most at this stage.

• Who will buy, and why? Talk to potential customers directly. Ten honest conversations with people who fit your target market are worth more than a hundred likes on a social media post.
• Who is already selling to them? List your competitors, both local and online. Look at their prices, opening hours, reviews and what their customers complain about. Limited companies file accounts at Companies House and these are free to view, although smaller firms often file only limited information.
• What will people pay? Pricing is where many plans go wrong. Test a price on real customers before you build your forecasts around it.

If you are based in Hull or East Yorkshire, the Business & IP Centre at Hull Central Library is worth a visit. It is part of the British Library's national network and offers free business resources, workshops and one-to-one sessions, with local centres in the libraries at Beverley, Bridlington and Goole. Our own guide to understanding your target market, which you'll find on the Start-up Toolkits page next to a market research template, covers research methods and segmentation in more detail.

What goes into a business plan

There is no single correct format, but most lenders and advisers expect to see the following sections, roughly in this order.

1. Executive summary

A one-page overview of the whole plan: what the business does, who it serves, how it will make money, how much funding you need and what you will spend it on. Write this section last. It is much easier to summarise a plan once the rest of it exists.

2. The business and the people behind it

Explain what you are setting up, where it will be based and the legal structure you intend to use. Then cover yourself and any co-founders, and be specific about relevant experience. "Eight years cooking in hotel kitchens, two of them running a team" tells the reader far more than "passionate about food".

3. Products, services and pricing

Describe what you sell in plain language and set out your prices. Show how you arrived at each one: what it costs you to make or deliver, the margin you need and how it compares with the competition.

4. Your market and customers

Summarise your research. Who are your customers, where are they, how many can you realistically reach and how do they buy at the moment? For a local business, think about geography. A café in Hull's Old Town and a mobile dog groomer covering the villages around Driffield have very different catchments.

5. Competitors and what makes you different

Name your main competitors and be honest about their strengths. "We have no competition" worries any reader, because it usually means either the research hasn't been done or there is no market. Then explain why a customer would choose you: location, specialism, quality, speed, price or service.

6. Sales and marketing

How will customers find out about you, and what will it cost to reach them? List the channels you plan to use, from your website and social media to local press, trade events, partnerships and word of mouth. Include how you will keep customers once you have them. Repeat business is usually cheaper to win than new business, a point we picked up in what start-ups can learn from the online entertainment industry.

7. Operations

This is the practical part: premises, equipment, suppliers, stock, opening hours, delivery and any licences or registrations you need. If you plan to take on staff, say when and in which roles. Readers want to see that you have thought about how the business will run from day to day, not just how it will sell.

8. Financial forecasts

For many readers this is the section that matters most. As a minimum, include:

• Start-up costs: everything you need to spend before you open, from equipment and deposits to insurance, branding and your first stock.
• A sales forecast: month by month for at least the first year, with your assumptions written down.
• A cash-flow forecast: the money coming in and going out each month, and your bank balance at the end of each one.
• A profit and loss forecast: whether the business makes money over the year once every cost is counted.
• A break-even figure: how much you need to sell each month to cover your costs.
• A personal survival budget: what you need to take out of the business to cover your own household bills. Lenders often ask for this, and it is easy to forget.

9. Risks

List the main things that could go wrong and what you would do about each. A key supplier letting you down, a slow first winter or a competitor cutting prices are all realistic. Showing you have thought about them builds confidence rather than undermining it.

Making the numbers believable

Lenders read a lot of forecasts and can spot a hopeful one quickly. A few habits make yours more credible.

• Build sales from the bottom up. Rather than "we'll take £5,000 a month", work out how many customers you expect, how often they buy and what they spend each time.
• Allow for a slow start. Very few businesses reach their full sales figure in the first month.
• Remember the seasons. A business serving visitors on the East Yorkshire coast will have a very different summer and winter, and plenty of trades go quiet around Christmas or the school holidays.
• Be realistic about when you get paid. If you invoice other businesses, the money may arrive 30 or 60 days after the work is done, while your own bills keep arriving on time.
• Don't forget tax. Set money aside for Income Tax or Corporation Tax from the start, and keep an eye on the VAT registration threshold, which stands at £90,000 of taxable turnover over a rolling 12 months as of the 2026/27 tax year.
• Add a contingency. A buffer of 10 to 15 per cent on your costs is a sensible starting point.

Common mistakes to avoid

• Writing pages about the product and only a paragraph about the customers.
• Copying a template word for word without adapting it to your business.
• Leaving out your own drawings, so the business looks profitable while you can't pay your rent.
• Relying on vague claims and jargon instead of evidence.
• Treating the plan as finished once the loan is approved.

Keep it working after launch

The best business plans get used. Once you start trading, put your real figures next to your forecasts every month and look at where they differ. If sales are lower than planned, is it price, footfall, marketing or timing? If costs are higher, which ones? Update the forecast every quarter so it always looks twelve months ahead.

That habit turns a document you wrote for a lender into a tool for running the business. It also means that when you need to borrow again or talk to an investor, most of the work is already done.

Templates to get you started

You don't have to start from a blank page. Our Start-up Toolkits include a guide to business planning, a business plan template and a cash-flow forecast template, all free to download. Use them as a framework, then make the plan your own. For more practical guides for new businesses in the region, browse the rest of the HEY Start-ups blog.