How to write a business plan (with a free template)
A business plan doesn't need to be a 40-page document. It needs to answer a few hard questions honestly, and to be something you actually use. Here's how to write one, with a free template to start from.
In short
- A business plan is a short, honest answer to what you sell, who buys it, how they'll find you, and whether the numbers work.
- Start with a one-page plan. Write a full plan when you need finance, investors or a partner, or when the business is getting complicated.
- Do the numbers early. The finances section is where most plans fall over, and where lenders look first.
- Write the summary last, get someone blunt to read it, and review the plan every three months.
Do you really need a business plan?
Plenty of owners never write one. The usual reasons sound sensible: “I know my business”, “the bank never asked”, “I’m too small”, “I’ll do it next year”.
The trouble is that a plan isn’t really for the bank. Writing it forces you to look at things you’d rather not: whether there are enough customers, what it really costs to serve them, and how long your money lasts if sales are slow. Finding a problem on paper is much cheaper than finding it six months after you’ve signed a lease.
It also doesn’t need to be long. For most small businesses, three or four pages of clear thinking beats a thick document nobody opens again.
One-page plan or full plan?
| One-page plan | Full business plan | |
|---|---|---|
| Best for | Starting out, sole traders, testing an idea, keeping yourself on track | Applying for a loan, approaching investors, bringing in a partner, a bigger or riskier venture |
| Length | One page (two at most) | Usually 8–20 pages plus financial tables |
| Time to write | An afternoon | A few weeks, mostly research and numbers |
| Numbers | Start-up costs, monthly break-even, rough 12-month sales | Detailed forecasts: sales, profit and loss, cash flow, funding needed |
Start with the one-page version. If you later need the full plan, you’ll already have its skeleton. The template below has both: fill in the one-page summary first, then expand each section.
What to include
These are the sections lenders, investors and experienced advisers expect to see. Keep each one as short as it can be while still being specific.
1. Summary
What the business is, who it’s for, what makes it different, what you’re aiming for, and (if you’re asking for money) how much you need and what for. Write this last, in half a page.
2. The business and the people
Your business name and structure, location, when you started (or plan to), and who runs it. Include the experience and skills that make you credible, and be honest about the gaps you’ll fill with help.
3. Products and services
What you sell, in plain words, and why someone would pay for it. Include your prices or price range and how you arrived at them.
4. Market and customers
Who your customers are (be specific: “homeowners in Perth’s northern suburbs renovating a bathroom”, not “everyone”), how many of them there are, how they buy today, and what they care about. Show the evidence: conversations, pre-orders, local data, a test you ran.
5. Competitors and what makes you different
List your three to five closest competitors, what they charge and what they do well. Then say clearly why a customer would choose you. “Better service” isn’t enough; say what you’ll actually do differently.
6. Marketing and sales
How customers will find you and what turns them into paying customers: your main channels, your budget and what you expect each to bring in. Our marketing plan guide has its own template for this section.
7. Operations
How the work gets done: premises, equipment, suppliers, systems, opening hours, and who does what. Note any licences, permits or registrations you need (business.gov.au lists them by industry and location).
8. Finances
The numbers that show whether the business works:
- Start-up costs: everything you need to spend before you open.
- Sales forecast: realistic monthly sales for the first 12 months, with the assumptions behind it.
- Profit and loss forecast: sales minus costs, month by month.
- Cash flow forecast: when money actually comes in and goes out, so you can see the months where you’ll run short.
- Break-even point: the sales you need each month to cover your costs.
- Funding: how much you have, how much you need, and where it’s coming from.
This is the section most plans get wrong, so it has its own guide: Financial planning and cash flow.
9. Goals, milestones and risks
Three to five goals for the next 12 months, each with a number and a date (“20 regular customers by June”). Then list the biggest risks (a key supplier, one large customer, a slow first winter) and what you’d do if each one happened.
How to write it, step by step
- Get the ideas out of your head. Spend an hour answering the questions in each section in rough notes. Don’t polish anything yet.
- Talk to real customers. Five or ten conversations with the people you want to sell to will improve your plan more than any amount of desk research.
- Do the numbers early. Fill in start-up costs and a 12-month cash flow forecast before you write the nice parts. If the numbers don’t work, the words don’t matter.
- Draft each section in plain language. Short paragraphs, specific facts, no buzzwords.
- Write the summary last.
- Get a blunt reader. Ask an accountant, a mentor, or a business owner you respect to pull it apart. Free and low-cost advisers are listed in our guide to mentors, coaches and advisers.
- Put a review date in your calendar. Every three months, compare what happened with what you planned, and update the plan.
Mistakes to avoid
- Optimistic sales, underestimated costs. Build in a slower start than you hope for, and add a contingency of 10–20% to costs.
- Forgetting cash timing. A profitable month can still leave you unable to pay rent if customers pay late. That’s what the cash flow forecast is for.
- “Our market is everyone.” A plan that targets everyone convinces no one.
- Copying a template word for word. Templates give you the headings; the thinking has to be yours.
- Writing it once and filing it. A plan you don’t revisit is just a document.
Other free templates
business.gov.au, the Australian Government’s business website, also offers a free planning tool and a detailed Word business plan template that’s suited to finance applications. It’s worth comparing with ours and using whichever suits you.