How to write a simple business plan you will actually use

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Most business plans are written once, for a bank or an investor, and never opened again. That is a waste. A short plan that you keep beside you is one of the most useful tools a small business can have, because it turns vague hopes into numbers and decisions you can check. This guide shows how to write one in a few pages rather than forty.

Decide who the plan is for

Start by being honest about the reader.

For yourself, the plan should be short, blunt and full of numbers you can track.
For a lender, it needs the same core plus evidence that you can repay: cash flow forecasts, security and your own track record.
For an investor, it needs to show how large the business could become and why your team can get it there.

You can keep one working plan and add sections for outside readers when needed. Do not write the investor version first and then try to run a business from it.

The one-page core

Before anything else, answer these questions in a sentence or two each:

What do you sell? Describe it in plain words a customer would use.
Who buys it? Be specific: not everyone who likes coffee, but office workers within a ten-minute walk who want something better than the vending machine.
Why would they choose you? Price, convenience, quality, trust, speed, or something else you can actually deliver.
How will they hear about you? Name the channels, not just marketing.
How do you make money? Price per sale, how often people buy, and what each sale costs you.
What do you need to start? Money, equipment, skills, permissions and time.
What could kill it? The two or three risks that worry you most.

If you cannot answer one of these, that gap is the most important thing the plan has told you.

The numbers section

This is where a plan earns its keep. Keep it simple, ideally in a spreadsheet.

Start-up costs: everything you must pay before the first sale.
Monthly fixed costs: rent, software, insurance, phone, any salaries.
Variable costs per sale: materials, packaging, payment fees, delivery.
Sales forecast: a realistic monthly estimate for the first year, built from how many customers you can reach and convert, not from a percentage of a huge market.
Break-even point: how many sales per month cover your fixed costs.
Cash flow forecast: money in and out month by month, including when customers actually pay you.

Write down every assumption next to the number it produces. Then make a pessimistic version with fewer sales and slower payment. If the pessimistic version runs out of money, you need a buffer or a different plan.

Goals you can check

Turn the plan into a handful of targets for the next three to six months, for example a number of paying customers, a monthly sales figure, a gross margin, or a date for launching a second product. Targets should be things you can measure without argument.

Keep it alive

The plan only works if you use it.

Review it monthly. Put actual figures next to the forecast and note why they differ.
Update assumptions, not just results. If customers take twice as long to pay as you expected, change the model.
Record decisions. A short log of what you changed and why stops you repeating mistakes.
Rewrite the one-page core every quarter. Your understanding of the customer will improve quickly in the first year.

Common mistakes

Too long. Length hides weak thinking. If a section does not change a decision, cut it.
Top-down sales forecasts. Capturing one per cent of a big market is not a forecast.
Ignoring timing. Profit on paper is not cash in the bank; see our guide to cash flow.
No owner's pay. Include what you need to live on, even if you take it later.
Treating it as fixed. A plan that never changes is not being used.

Templates and help

Many banks, local enterprise agencies and government business support services publish free business plan templates and cash flow forecast spreadsheets. They are a reasonable starting point, but trim them to what you need. If you are borrowing money or bringing in investors, ask an accountant to look over the numbers before you sign anything. What does your business plan look like, and which part do you actually check each month? Share your experience or questions in the comments.