A business plan is a short document that says what you sell, who buys it, what you charge, and whether the numbers add up. For most new UK businesses it needs to answer about seven questions, and you can write a solid first version in an evening. You do not need an MBA, a consultant, or forty pages — you need honest answers and a bit of arithmetic, and this guide walks you through both.
At a glance
| Feature | Detail |
|---|---|
| What it is | A short written answer to: what you sell, who buys it, what it costs, what you'll make |
| How long it should be | A few pages. Banks and lenders read the numbers first |
| How long it takes | A first version in an evening; a good one in a weekend |
| What you need | Your prices, your costs, and a realistic guess at how much you'll sell |
| The hardest part | Being honest about how many customers you'll actually win |
| What it's for | You, first. Then the bank, a lender, or a grant application |
| Cost | Nothing. The template below is free, and so is the tool that fills it in with you |
What a business plan actually is
Strip away the mystique and a business plan is a set of answers, written down, that fit together. What do you sell and why would anyone pick you? What does it cost you to make or deliver it, and what do you charge? How many will you sell each month — and why do you believe that number? What are the costs that arrive whether you sell anything or not? What is left over at the end?
Write those answers down and you have a business plan. Everything else — the market analysis chapter, the SWOT diagram, the mission statement nobody reads — is decoration. Useful sometimes, but not the plan.
It is worth being clear who the plan is for, because it changes how honest it needs to be. The first reader is you. A plan built on hopeful numbers only cheats yourself, because you are the one who lives with the result. Bankers and lenders come second, and they read plans differently to how people expect: they skim the words and go straight to the numbers to see whether they hold together.
The seven parts of a business plan
This is the template. Copy the headings, answer each one, and you are most of the way there.
- What you do — one or two sentences. Who you help, to do what, and how. If you can say it out loud without notes, it's right.
- Who buys it — your actual customer, described specifically. "Busy parents within 20 minutes of Reading", not "everyone who needs a plumber".
- What you sell and what you charge — each product or service, its price, and what it costs you to make or deliver it. The gap between those two numbers is your margin, and it powers everything else in the plan.
- How many you'll sell — month by month for the first year, with a reason behind the number. This is the part that separates a plan from a wish.
- Who works in the business and what they cost — you included. If you're paying yourself nothing for six months, the plan should say so, because that is a real cost to you even if it never shows in the bank account.
- The costs that arrive anyway — rent, insurance, software, the van, marketing. The bills that turn up whether or not you sell a thing.
- The profit plan — sales at the top, all the costs underneath, and what's left at the bottom, month by month for a year. Some people call this a P&L; the plainer name is a profit plan, and it is the page a lender turns to first.
How to write it, step by step
Start with the sentence, not the spreadsheet. Fill the gaps in this: "[Name] is a [type of business]. We help [customers] to [what they get] by [how you do it]." That sentence is your first section done, and it quietly forces every decision that follows.
Price before you forecast. You cannot predict sales until you know what you are charging, and you cannot set a price until you know what each sale costs you. Work out both numbers for everything you sell. Our guide to pricing a product or service does this properly.
Forecast from the bottom up. The classic mistake is top-down: "the UK cleaning market is worth billions, we only need 0.1%". Nobody wins customers by percentage of a market. Bottom-up starts from something real: how many jobs a week you can physically do, how many enquiries your area produces, how many customers your first month of marketing can realistically win. Small, defendable numbers beat big, borrowed ones.
Make the year move. Few businesses sell the same amount in month one as month twelve. Decide the shape — flat, growing a few percent a month, or seasonal — and be sceptical of your own optimism: growth above roughly ten percent a month, sustained for a year, is rare enough that anyone reading your plan will question it.
Add people, then the other costs. Wages first, including your own, with a rough 10–15% on top of any salary for employer National Insurance and pension. Then the bills that come regardless. If a cost is genuinely per-sale — materials, delivery, card fees — it belongs with the product, not here.
Put marketing in as a real line. Most first plans either forget marketing entirely or type in a number pulled from the air. Work it backwards instead: how many customers does the plan need, what does a lead cost in your trade, and how many leads become customers? That spend is a real monthly cost, and a plan with a £0 marketing line is claiming customers will simply appear.
Then read the bottom line, month by month. Is it negative for the first few months? Most plans are — the question is whether you can cover those months, and working that out is a separate exercise called a cash flow forecast, which you or your accountant can build from the plan's numbers. Does the bottom line never turn positive? Then the plan just saved you from a very expensive lesson, which is precisely the job it exists to do.
A worked example
Take City Florists, a small subscription business we'll use to show the arithmetic. It sells flower subscriptions: £40 a month for a weekly bouquet, £22 a month for fortnightly. Each delivery costs £6 to fulfil, so the weekly plan's four deliveries cost £24, leaving £16 per subscriber per month before any other costs.
Say it starts with 250 subscribers on the weekly plan. That is £10,000 of sales a month — but £6,000 of it goes straight out on deliveries, leaving £4,000. Out of that £4,000 come the founder's pay, the website, insurance and marketing. Suddenly a £10,000-a-month business looks like what it really is: a £4,000-a-month margin with bills to pay, and that is exactly the view a business plan exists to give you before the bank account gives it to you.
Now add growth at 6% a month. New subscribers each month means the base compounds — by month twelve the numbers look very different, but so does the marketing cost of winning all those joiners, and the plan has to carry both.
If you would rather not build that arithmetic by hand: create a mini business plan in minutes with Plan.business. Put in your prices, your costs and how many customers you expect, and it works out the rest — what you will make, when you break even, and what you need to charge to hit your target.
The mistakes that sink first plans
Confusing sales with what you take home. £10,000 of sales is not £10,000 of income — City Florists banks £4,000 of margin before bills. Every number in your plan should know which of the two it is.
Forecasting from hope. If month one says fifty customers, the plan needs to say where fifty customers come from. "Word of mouth" is not a source in month one, because there is no word yet.
A £0 marketing line. New businesses pay to be found. If the plan wins customers, something on the cost side has to be doing the winning.
Pricing thin and planning big. A small margin multiplied by optimistic volume looks fine on paper and fails in practice, because volume is the number you control least. Fix the margin first — our pricing guide shows how.
Stopping at the yearly total. A business that is profitable over the year can still die in March. Month-by-month is the whole point; the annual number is just the last row.
If the plan is for a loan or a grant
Lenders and grant bodies read the same plan you write for yourself — they simply check whether the numbers connect. Do the sales assumptions have reasons? Does the margin cover the costs? Is there a month-by-month view, and does the borrowing amount match what the plan actually needs? A modest plan with connected numbers beats an impressive one with gaps. When you're ready to look at what funding exists, our guide to business grants and startup loans covers the UK options.
How Plan writes it with you
Plan is a free business operating system for people starting or newly running a UK business. It walks you, one simple step at a time, from your elevator pitch through brand, product and pricing, to a complete business plan — then uses everything it now knows about the business to help with the basics: logo and brand, marketing, a website, a bank account, funding, insurance, company registration. You can use as much or as little as you want.
You never see a spreadsheet while you build it. You answer short sentences — what you sell, what you charge, how many you expect to sell — and Plan does the arithmetic and reads it back to you in plain English, month by month, marketing included. At the end you have the same numbered plan this page describes, built from your own answers — and you can export the whole thing as a spreadsheet (Excel or CSV) to hand to your accountant, check the numbers yourself, or send with a funding application.
Go deeper
Each part of the plan has its own guide when you need more than this page:
- Startup costs — what it really costs to get going, and the costs people forget.
- Financial forecast — turning "how many will I sell" into an honest number.
- Cash flow — why profitable businesses still run out of money, and how to see it coming.
- Break-even — how much you need to sell just to cover your costs.
- KPIs — the handful of numbers worth tracking once you're trading.
Frequently asked questions
How long should a business plan be? A few pages. The useful core is the seven parts above: what you sell, who buys, prices and costs, sales month by month, people, other costs, and the profit plan. Anyone assessing it reads the numbers first, so a short plan with solid numbers beats a long one with padding.
Do I legally need a business plan to start a business in the UK? No. There is no legal requirement. You will usually need one to borrow money or apply for a grant, and it is worth writing regardless — the plan's real job is showing you whether the business works before you spend real money finding out.
How long does it take to write a business plan? A first version in an evening, if you know your prices and costs. A good version in a weekend. The slow part is not the writing, it is deciding realistic numbers for how much you will sell — which is exactly the thinking the plan exists to force.
What is the difference between a business plan and a cash flow forecast? The business plan is the whole picture — what you sell, to whom, at what price, with what costs and what profit. The cash flow forecast is one part of it: when money actually arrives and leaves your account. A business can be profitable on paper and still run out of cash, which is why plans include both.
Do banks still ask for business plans? Yes — lenders and grant bodies generally want one, and they read the numbers more closely than the words. They check that the sales forecast has reasons behind it, the margin covers the costs, and the amount you are asking for matches what the plan shows you need.
Can I write a business plan for free? Yes. The seven-part template on this page is free to copy, and Plan — the free tool this site belongs to — builds the plan with you, does the arithmetic and exports it as a spreadsheet (Excel or CSV), at no cost.
Two ways to do this
Do it yourself with the template. Everything you need is on this page: copy the seven headings, answer them honestly, and do the month-by-month sums. That is a real business plan, and plenty of good businesses started on exactly that.
Or let Plan do the arithmetic. Start free in Plan. It runs in your browser — nothing to download. Answer the same questions one short step at a time and Plan builds the numbered, month-by-month plan for you — then exports it as a spreadsheet for your accountant or a lender. Do just this bit, or the whole journey; both are fine.