How to write a simple business plan

The words “business plan” put many people off: they picture a thick folder, complicated tables and economists’ jargon. In reality a business plan is simply a way of putting your idea on paper and making it clear to yourself and to others. It is just as useful for a small sewing workshop at home as for a shop or bakery in the mahalla. In this guide we look at who a business plan is written for, how to put together a short one-page plan, what goes into each section of a full plan and how to understand the financial part without complicated formulas. Then, using an illustrative family bakery, we fill in every section, talk about keeping the plan up to date, go through common mistakes and finish with a practice exercise and a checklist.

Who a business plan is for, and why even a short one helps

A business plan has three kinds of reader, and each looks for something different.

• You. Writing a plan puts your thoughts in order. An idea can seem brilliant at first, but as soon as you try to answer in writing “who exactly is my customer?”, “why would they buy from me?” and “where will I get my supplies?”, the gaps show up immediately. Finding them before you spend any money is the main benefit of a plan.
• A partner or family members. People starting a business together often feel they mean the same thing, when in fact each of them imagines it differently. A written plan helps you agree in advance who does what, how decisions are made and how the profit is shared.
• An organisation offering a loan or a grant. A bank, a microfinance organisation or a grant programme does not know you personally. They use the plan to judge whether the project has been thought through, whether you can see the risks and how you intend to use the money. Many organisations have their own template; if you have been given one, follow it.

A short plan is no less useful than a full one. For a small business a single page is often enough: it is quick to write, easy to update and can be pinned to the wall. A full plan is needed for an outside reader or when significant funding is involved. The best approach is to start with a one-page plan and expand it if needed. If you are still at the idea stage, read our article on starting a small business first.

The one-page plan: blocks and questions

The best-known one-page formats are the Business Model Canvas and its simplified version for small businesses and new ideas, the Lean Canvas. Both split a single sheet into nine blocks. Below are blocks based on the Lean Canvas, with the questions to ask yourself for each one.

1. Problem. What difficulty do your customers face? How do they deal with it now, and why does that solution not satisfy them?
2. Customer segments. Who exactly do you serve? How old are they, where do they live, what are their habits? Who will buy first?
3. Value proposition. In one sentence: why you? What makes you different from others in the customer’s eyes?
4. Solution. Which three main features of your product or service solve the problem?
5. Channels. How does a customer hear about you, and how do they get the product: a shop, delivery, social media, recommendations from friends?
6. Revenue streams. What do you get paid for: each sale, a subscription, an order, a service fee?
7. Cost structure. What does it cost to keep the business running: rent, raw materials, wages, utilities, transport?
8. Key metrics. Which numbers tell you the business is doing well: customers per day, returning customers, orders?
9. Unfair advantage. What do you have that others cannot easily copy: experience, location, a family recipe, trust in the mahalla?

Write 2–4 short sentences in each block. If you cannot answer a block, that is not a failure; it is your next step: you need to go out and talk to customers to find the answer.

You can draw up a one-page plan on paper, in Word or in a spreadsheet. A handy method is to divide an A4 sheet into three columns and three rows and write one block in each box.

Sections of a full business plan

A full plan is an expanded version of the one-page plan. A typical structure looks like this.

Executive summary

The most important part of the plan, yet it is written last. Keep it to one page: what you do, for whom, why it will work, how much funding you need and what it will be spent on. Many readers read only this section, so it must stand on its own and be easy to follow.

Problem and solution

What need are you meeting? Describe the problem in the customer’s own words, with a concrete example. Then explain how your solution solves it.

Customers

Describe your main customers: who they are, where they live or work, when and how they buy. “Everyone” is not an answer. If you have already spoken to customers, briefly include what they said.

Market and competition

Who nearby offers a similar product? What are their strengths and weaknesses? How are you different? A list or table is a convenient way to compare competitors.

Product or service

What are you selling, what is the range, and how do you ensure quality? If the product is seasonal or changes over time, mention that too.

Marketing and sales channels

How do customers find out about you, and how do they buy? A shop counter, a Telegram channel, an Instagram page, a delivery service, word of mouth. Our article on marketing basics will help you write this section.

Team and responsibilities

Who does what? Each person’s experience and area of responsibility. If you are doing everything yourself for now, plan which tasks you will hand over to others later.

Operations: supplies, premises, equipment

Where do you get raw materials or stock, and how often? Where is your workplace, and what is it suited for? What equipment do you need, and what will you do if it breaks down? Describe the daily routine step by step.

Financial section

How much money you need to start, which costs recur every month, where income will come from and when the business will pay for itself. We look at this section in detail in the next part.

Risks and action plan

What could go wrong, and what will you do if it does? Finish with a concrete action plan: which task, who is responsible, and by when. To make your goals specific and measurable, use the SMART goals method.

The financial part without the numbers

Many people find the financial part the hardest, but its logic is simple. First get to grips with the concepts; the figures you will gather from your own situation: market prices, conversations with suppliers, property adverts.

Types of costs

• Start-up costs: one-off spending to open the business: equipment, renovation, the first stock of raw materials, registration, a sign.
• Fixed costs: what you pay every month whether or not you make any sales: rent, fixed wages, internet, phone, some utilities.
• Variable costs: spending that grows with every unit sold: raw materials, packaging, delivery.

Revenue streams

Where does the money come from? Selling the main product, made-to-order work, extra services. A separate line for each source will later help you see which area brings in the most profit.

Break-even point

The break-even point is where income exactly covers all costs: no loss and no profit. Below this point the business runs at a loss; above it, profit begins. To find it, ask yourself: “How much do I need to sell in a month to cover my fixed costs?” From each sale, once the variable costs are taken off, what remains goes towards the fixed costs. The sales volume at which those remainders add up to your fixed costs is the break-even point.

Three scenarios

No one knows the future for certain, so prepare three sets of figures rather than one.

• Cautious: few customers, costs higher than expected.
• Moderate: the most likely case.
• Optimistic: if everything goes well.

The table will look roughly like this (fill in the cells with your own figures):

An important rule: the business must survive even in the cautious scenario. If, in the worst case, it runs at a loss for several months, do you have a reserve to cover those months? These calculations are easiest to build in Excel or Google Sheets: change the value in one cell and the whole table recalculates itself.

Example: a family bakery plan

The example below is illustrative, the names are made up and no amounts are given; the aim is to show how each section is filled in.

Dilnoza and her husband Sherzod have been baking bread and pastries at home and selling them to their neighbours. Now they want to open a small bakery in the centre of their mahalla and plan to apply to a microfinance organisation for the money.

• Executive summary. A family bakery: tandoor bread, patir and home-style pastries every day. Customers are local residents and people working near the school and the bazaar. The funding is needed for a tandoor, a dough mixer and renovation.
• Problem and solution. The nearest bakery is far from the mahalla, and it is hard to find hot bread in the morning. The solution is a bakery close to home that opens early.
• Customers. Families who buy bread in the morning, people ordering for weddings and memorial gatherings, choyxonas and canteens.
• Market and competition. Two bakeries at the bazaar and factory bread in shops. The advantage is proximity, hot bread and patir made to a family recipe.
• Product. The core range: ordinary bread, patir and samsa. Before holidays, special pastries to order.
• Marketing and sales channels. Over-the-counter sales, an announcement in the mahalla Telegram group, orders taken by phone and a standing arrangement with choyxonas.
• Team and responsibilities. Sherzod handles the tandoor and the dough; Dilnoza handles sales, orders and record-keeping; their nephew Bekzod does the morning deliveries.
• Operations. Flour and other raw materials are bought weekly from a wholesale supplier. The premises are rented, and the gas and electricity connections are checked in advance. The working day starts before dawn with kneading the dough.
• Financial section. Start-up costs: the tandoor, the dough mixer, shelving and renovation. Fixed costs: rent, utilities and Bekzod’s wages. Variable costs: flour, oil, salt and packaging. Three scenarios: cautious, counter sales only; moderate, the counter plus one choyxona; optimistic, wedding orders on top of that. The break-even point in words: “how many loaves we need to sell each day to cover the rent and wages by the end of the month”.
• Risks and action plan. Flour becoming more expensive: arrange two suppliers in advance. The tandoor breaking down: an agreement with a repairer beforehand. Power cuts: the tandoor runs on gas. Action plan: renovate the premises in the first month, trial sales in the second, and sign agreements with choyxonas in the third.

Notice that this plan contains no complicated terms, yet every question has an answer. That is exactly what matters to someone providing funding.

Keeping the plan up to date

A business plan is not a document you write once and put on a shelf. It is a living tool.

1. Every month, compare your actual results with the plan: how much you sold, how much you spent, and which scenario you were closest to.
2. Write down the reasons for any differences. If sales were lower than expected, why? The weather, a competitor’s promotion, the wrong opening hours?
3. Every quarter, review your one-page plan: have your customer segments, channels or pricing approach changed?
4. Save each update with a date. Put the date in the file name so you can later see how you have grown.

To record real figures, you need the habit of keeping daily records. A notebook or a simple spreadsheet is enough to start with (see our guide to keeping records in a shop); what matters is writing things down every day in the same order.

Common mistakes

• Too much optimism. Lots of customers from the first month and no unexpected costs. In real life a business takes time to get going, so treat the cautious scenario as your main one.
• Denying the competition. The phrase “we have no competitors” makes readers distrustful. There is always an alternative: even if a customer bakes bread at home, that is competition too.
• Customers are “everyone”. Without a specific customer, both your marketing and your product range end up unfocused.
• Mixing personal and business money. If family spending and business spending come out of the same purse, you cannot tell whether the business is making a profit.
• Forgetting small costs. Packaging, transport, phone, equipment repairs: small on their own, noticeable together.
• Copying someone else’s plan. A template from the internet reflects a different city, different customers and different conditions. Use a template for the structure, but write the content yourself.
• Writing it and forgetting it. A plan that is never checked against results quickly goes out of date.

Practice exercise and checklist

Do this exercise for your own idea. If you do not have one yet, use a friend’s business or the bakery example above.

1. Divide an A4 sheet into nine boxes and fill in a one-page plan, with 2–4 sentences per block.
2. Mark the blocks you cannot answer and talk to at least three potential customers to find the answers.
3. List three competitors near you: what they offer, their strengths and their weaknesses.
4. Split all your costs into three groups: start-up, fixed and variable.
5. Build a three-scenario table and work out the result for the month in each one.
6. Write your break-even point in one sentence: “If I sell … a month, I cover my costs.”
7. Write down three main risks and a response to each.
8. Draw up an action plan for the next three months: task, person responsible, deadline.
9. Finally, write the executive summary and give the plan to someone you trust to read.

Checklist

• The customer is described specifically, not as “everyone”.
• Competitors are named and your difference is explained.
• Costs are split into three groups and small costs are not forgotten.
• There are three scenarios, and the business survives even the cautious one.
• Risks and responses to them are written down.
• The action plan has a person responsible and a deadline for each task.
• The executive summary is no longer than one page and makes sense on its own.
• The file name includes a date, and the next update day is set.

A business plan is not a prediction of the future but a tool for making considered decisions. The first version does not have to be perfect: what matters is writing it, checking it against your results and keeping it up to date.

If you would like to learn record-keeping, accounting or project management systematically with a teacher, take a look at our association’s free accounting and project management programmes and our other training programmes. When you are ready, submit an application and our specialists will get in touch.