Chapter 26

Writing a Business Plan

Learning Outcomes
Upon completion of this chapter you should be able to:
• Carry out a SWOT analysis
• Define a business plan
• Identify the main headings in a business plan
• Complete a business plan.
The Business Plan
A business plan contains information about:
• Where the business is now?
• Where it is going?
• How it will get there?

Potential lenders will want to see a business plan which will provide information about:
• The history of the business
• What type of business it is
• Where it gets its income from
• Its ability to repay a loan.
Planning
Planning involves setting goals for the business and deciding on ways to achieve these goals.
When setting goals, they should be SMART:
• Specific: target an exact and clear goal
• Measurable: it must be possible to measure whether or not the goal has been achieved
• Achievable: it must be possible to reach the goal within the time frame
• Relevant: the goal must be worthwhile for the success of the business
• Timed: this gives the goal a target date to be achieved
SWOT Analysis
Before writing a business plan it may be useful
to carry out a SWOT analysis.

A SWOT Analysis identifies the strengths and

weaknesses of a business and identifies
opportunities and threats facing it.

Strengths and weaknesses are internal factors,

which the business has control over.
Opportunities and threats are external factors,
over which the business has no control.

Activity
Carry out a SWOT analysis for a local or
national business that you are familiar with.
The Business Plan
A business plan is a written description of your business’s future aims, strategies, markets
and financial forecasts.

A business plan will be required if external finance is needed, either for a start-up business or
to fund expansion for an existing business.

A business plan is also useful to help the entrepreneur(s) identify the resources and finance
that are needed to start the business, as well as the marketing and production needed to
ensure the business is a success.
Purpose of a Business Plan
• Establish whether the business is likely to succeed
• Help the business raise the finance it needs
• Force the entrepreneur to focus on the goals of the business
• Anticipate problems and identify possible solutions
• Set targets to be achieved
Business Plan Headings
1. Background of the business
Name and address of the business, its aims and objectives
2. The business team
People involved in the business
3. Market and marketing
Brief description of the market, current and potential size, number of competitors,
marketing mix strategy
4. Production
Premises and equipment available to the business, production processes to be used
5. Costings and finance
Cost to produce items, details of existing loans, amount of finance required, how it will be
repaid, cash flow forecasts
6. Structure of the business
Legal structure of the business
Recap and Review
Can you do the following?:
• Carry out a SWOT analysis
• Define a business plan
• Identify the main headings in a business plan
• Complete a business plan