Testing and validating your business ideas

Write a business plan

Step-by-step guide to writing a business plan that will help you secure funding and stay focused.

UK-wide
Guide summary

Write a business plan to secure funding and guide your business. It must have 12 sections, including financial projections based on real data. Use a free template and get feedback before submitting.

  • Download a free template from startuploans.co.uk
  • Include all 12 required sections
  • Write the executive summary last
  • Base financial numbers on research
  • Create three financial scenarios
  • Keep the plan 15-30 pages long
  • Get feedback from a mentor or accountant
  • Show understanding of costs and competition
  • Invest some of your own money
  • Explain your competitive advantage clearly
On this page
UK-wide Sole Trader

Related guides in Growth & Strategy

Test your business idea

Validate your business concept through market research, competitor analysis, and customer testing before you invest time and money.

Business planning checklist

Checklist covering all the pre-trading planning steps from validating your idea through to registering your business.

A business plan is the single most important document you will create before launching your business. It forces you to think through every aspect of your idea and is required by virtually every lender, investor, and grant body.

You do not need to write it in order. Most people start with the sections they know best and write the executive summary last. A typical plan is 15-30 pages excluding appendices.

The 12 essential sections

Every business plan follows a standard structure. Lenders expect to see all 12 sections, even if some are brief. Missing sections suggest you have not thought through that area of your business.

Financial projections

This is the section lenders scrutinise most carefully. Unrealistic numbers destroy your credibility. Base every figure on evidence - competitor benchmarks, supplier quotes, market research data, or your own trading history.

Writing tips for each section

Executive summary

Write this last. Summarise the entire plan in under 1,000 words. A busy investor may read only this section, so make it compelling. Include your business concept, target market, competitive advantage, funding requirement, and projected returns.

Market analysis

Use data, not opinions. Quote ONS statistics, trade association reports, or Google Trends data. Show you understand your target market's size, growth rate, and buying behaviour. Banks want evidence, not enthusiasm.

Competitive analysis

Never write 'we have no competitors'. Every business has competition, even if indirect. List 5-10 competitors, analyse their strengths and weaknesses, and explain your competitive advantage clearly.

Financial projections

Build three scenarios — base case (realistic), optimistic (if everything goes well), and pessimistic (if challenges arise). Lenders respect founders who understand downside risk.

What lenders look for

  • Realistic assumptions: Every revenue figure should be justified. 'We expect 50 customers per week' needs evidence - footfall data, competitor benchmarks, or pre-launch orders.
  • Understanding of costs: Missing obvious costs (VAT, employer NI, business rates, insurance) suggests inexperience.
  • Cash flow awareness: Lenders care more about when cash arrives than about profit. A cash flow forecast is essential.
  • Contingency planning: What happens if sales are 30% below forecast? Having a plan B shows maturity.
  • Personal investment: Lenders want to see you have 'skin in the game'. Most expect you to invest some of your own money.
SOLE TRADER Requirement

Sole traders need a Personal Survival Budget too

If you are applying for a Start Up Loan or bank loan as a sole trader, you will need a Personal Survival Budget alongside your business plan. This shows your monthly personal living costs (rent, food, transport, utilities) and proves you can afford to live while the business grows.

Your business cash flow forecast should include 'Owner's Drawings' as a regular outflow, matching the amount you need from your Personal Survival Budget.

When this matters: When applying for any business funding as a sole trader.
  1. 1

    Download a free business plan template

    Start Up Loans provides a free template covering all 12 sections with guidance notes and worked examples. Available at startuploans.co.uk.

  2. 2

    Write your executive summary last

    Summarise the entire plan in under 1,000 words. Cover your business concept, target market, competitive advantage, funding ask, and projected returns.

  3. 3

    Base every number on evidence

    Use supplier quotes for costs, competitor benchmarks for pricing, and market research for sales projections. Cite your sources - lenders check.

  4. 4

    Create three financial scenarios

    Base case (realistic), optimistic, and pessimistic. Show you understand what could go wrong and have planned for it.

  5. 5

    Get feedback before submitting

    Ask a mentor, accountant, or business adviser to review your plan. Fresh eyes spot gaps and unrealistic assumptions you have missed.

Business plan resources

Free templates, guidance, and support for writing your business plan.

Write a business plan (opens in a new tab)
Apply for a Start Up Loan (opens in a new tab)