How to write a business plan

You've got a great idea and you're keen to get started. But for the best chance of success it's important to put together a detailed business plan that describes and establishes key aspects of your new enterprise.

What we'll cover

• Why you should write a business plan 
• The key elements of a strong business plan
• Where to get a business plan template
• How to take payments in your business.
  
   

Why do I need a business plan?

Every business owner knows that part of the challenge is juggling all the elements and demands that have to be considered, as well as regulatory requirements. You have to become an instant expert on areas that may be outside your expertise, such as commercial property, business insurance, advertising, marketing and employment law, plus much more.
 

A good business plan helps you separate out each aspect of your business, so you can focus on one factor at a time, rather than all at once. Other reasons to engage in this type of planning process are:
 

• Helps you prioritise your efforts
  Stepping back from the granular details of starting and running a new business gives you time to reflect on the big picture, considering the things that will really matter to your future customers. That in turn will inform the priorities you need to focus on.
   

• Gives you more control of outcomes
  The discipline of working through a plan – and constantly refining it over time – will encourage you to think about the factors that’ll most influence your likelihood of success. What’s working? And what isn’t?
  
  
• Supports you if you’re seeking finance
  Banks and other lenders – or potential investors – will expect to see a solid business plan to reassure them that your new enterprise is well run.

What needs to go into a business plan?

Every business is different, so there’s no definitive business plan structure – but here are some key elements you should consider for inclusion. It’s important to think of your plan as a living, breathing document that evolves over time as you build your business and gain knowledge, insights and experience along the way.

 

1. Executive Summary

Leave drafting this brief overview until last. It should summarise and define all other elements of the business plan, and cover:

• Your business vision and mission statement
• Differentiation from similar businesses
• Target market
• Company description and operating model
• Business ownership and management
• Expansion plans
• Short-term and long-term goals.
   

2. Business and market analysis

Here’s where you talk about what type of business you’re starting and how it’ll fit into the local and broader market. Include things such as:
 

• Style of business and the products and services you plan to offer
• Any competitive advantage you have
• Market research and competitor analysis
• Industry trends
• SWOT (strengths, weaknesses, opportunities and threats) analysis of your business idea.
   

3. Marketing strategy

However great your business idea is, you can’t just start trading and hope for the best. In this section of your business plan give some thought to:
 

• Marketing budgets – launch and ongoing
• Marketing objectives – what you hope to achieve in the short and long term
• Target markets – there may be different sectors you can target
• Brand position – the name and personality of your business
• Value proposition – such as competitively priced or prestige
• Digital optimisation – website and social media marketing
• Key marketing mediums – from leaflet drops to broadcast.
   

4. Business structure and legal

You’ll need to choose a business structure (e.g., sole trader, partnership, company), which will generally reflect ownership and your desired level of liability. Other aspects to refer to in your business plan include:
 

• Any licences you’ll need in order to operate
• Insurance
• Leases
• Your responsibilities as an employer.
   

5. Operating plan

Here you can detail how you plan to operate on a day-to-day basis, covering areas such as:
 

• Sales channels (how and where you’ll be operating)
• Suppliers (how and where you’ll source any supplies or products you need)
• Vehicles and equipment (buy or lease)
• How you’ll take payments (see a section on this later)
• Management team (day-to-day)
• Roles and staffing levels (full-time versus part-time and casual)
• Contingency plans (for downturn periods, staff issues, weather, etc.).
   

6. Financial plan

If you need a business loan to support your business, lenders will want to see your business plan, including details of:

 

• Start-up costs
• Operating expenses including labour costs
• Profit and loss forecast
• Cash flow statement and forecast
• Financial projections and ratios
• Results and balance sheets (once you’re trading).
   

7. Action plan

This will likely be the most dynamic section of your business plan. It’s where you review and update business goals and note lessons learned and actions required in response to trading activity and market fluctuations.
 

List the actions you plan to take before you review your business plan next; and note down any ongoing actions that have yet to be completed.

Where can I get a business plan template?

A search online will reveal numerous downloadable business plan templates. Accounting software services such as MYOB and Xero publish templates online too.

To save you looking further, the Australian Government’s Business website has a free business plan template you can download in Microsoft Word format. Or you could simply create your own template using the headings listed in this article.

How should I take payments in my new business?

The methods you’ll use to take payments should be detailed in your operating plan. Will you be getting paid remotely, face to face, or online? Or any combination of those? One of the keys to getting paid fast is to make it as simple as possible for customers to pay you. So, it’s a good idea to choose options that help them pay you the way they want to.

 

• Getting paid on invoice:
  If your customers will be making bank-to-bank payments, you can just give them the BSB and account number of your bank account. However, if you’d rather not share your bank account details, you can ask customers to pay into your account using PayID®, meaning you’ll only need to provide the unique number you’ve registered for the service – which could be your mobile number or ABN.

 

• Face-to-face payments:
  Depending on the nature of your business, you may want to take credit card and digital wallet payments with an EFTPOS machine; in which case you’ll need to decide if you want an EFTPOS terminal that integrates with your point of sale (POS) system. Or for ultimate flexibility and portability, you can download and apply for the EFTPOS Air app to your compatible smartphone, which once finalised would allow you to take secure payments using your mobile alone. EFTPOS Air also features point of sale capabilities, so you can build menus of products or services on it.

 

• Online payments:
  If you’re building an eCommerce website using an off-the-shelf platform, it may already incorporate a payment gateway. But if you’re looking for your own way of accepting card payments online or by phone, you may wish to consider one of the eCommerce solutions provided by Westpac.