The Public Liability Insurance Blog

A guide to business plans

A wise man once said “If you fail to plan, you plan to fail”. It was so wise that several other people have often repeated it. With this in mind, a business plan is a fantastic weapon to wield in order to prevent your small business from becoming yet another failed enterprise. Somewhere close to 9 out of 10 businesses fail in their first two years, so the odds are sadly stacked against you unless you develop some kind of strategy early on.

ChartA business plan is a written statement of your goals and methods by which you intend to reach said goals. Running a business is more complicated than simply getting more money coming in than going out, so here are some of the things you need to hash out.


Who will control what and who will be responsible for what? Who will you employ? Who will manage those employees?

Committing this to paper will help you easily identify any points where you don’t have enough management cover or general expertise. Obviously if you are a sole trader, writing this down won’t take you very long, but even if you only employ a handful of people, it can be useful to draw out a company structure to keep track of your operations. Even if there aren’t many of you now, it might be that your headcount grows exponentially in the future.

Products and services

pieFor some businesses this will be easier than others, but make a list of exactly what you are selling and what you intend to sell in the future. Trying to do too many things at once will put tremendous strain on your business and seeing it all written out in this section might make you notice that you’re trying to do too much too soon.

Whilst it is important to make sure you aren’t overly reliant on a single product or service, becoming a jack of all trades and doing it all poorly is a sure fire way to obliterate your trading reputation and your business along with it.


Identifying your market is incredibly important, regardless of what business you’re in. What sort of demographic are you going after, who are you marketing to, who are your core customers? Even if you run a building business, making a note that you are targeting home owners, landlords or letting agents can be valuable as you can plan accordingly around their particular needs. Letting agents might be a little more savvy with the sorts of things that can and can’t be done whereas homeowners and landlords may need a little bit more explanation depending on their levels of experience which could affect the way you want to do business and change the type of services you can best provide.

Growth potential

Different markets will have different amounts of business potential, so thinking about how you want to grow your business and how you want to expand is useful. It might be that you have very limited intentions to grow and expand. Maybe you want to run a “lifestyle” business that keeps you comfortable in your current financial position, or maybe you want to set up the next big corporate empire with a series of rail and plane franchises with your name plastered down the side. Regardless, making a record of it here will help you keep on track and see what’s next on the horizon.

Finances – Turnover, income and expenditure

Time to break out the spreadsheets. It is easy to let your finances run away with you at the best of times, so committing what you expect to earn and spend to paper is a great way of keeping your business in check.

What you write down might be wildly inaccurate or optimistic, but it gives you an idea of what to work towards and so long as you update your figures as you go along if you see your plan is unreasonable, then it will help you identify potential issues much quicker. Spotting a cash flow issue after two months is salvageable. Letting it fester for a year on the other hand would cause serious issues.

Executive Summary

A single page “elevator statement” will prove invaluable. On this page, you put brief statements from all the other sections, including a summary of your business purpose, the opportunity in the market, what sort of milestones you want the business to reach and brief revenue, profit and loss expectations. This will give you and anyone else you show the plan to a really quick idea of what the business is about, where it should be and what it should be doing.


OfficeBusiness plans are useful for two major reasons:

  • They help you secure investment

No investor in their right mind would consider funding your company if you haven’t got a plan of some description. They will want to see that you’re serious, that you’ve thought about your market and have identified where your company can grow and what it will do. Even if your plan is off in a few places, they can still work with that. Investors might want to amend your plan or question it, but a solid business plan puts an excellent foot forward if you’re trying to secure funds in any way.

  • They keep you on track

Even if you’re not looking for investors and never intend to, a business plan will keep you on the straight and narrow. They are invaluable to making sure you don’t let things run away with you. Whenever you might find yourself a little directionless, consulting the plan can bring you right back on track.

Help! I have no plan!

If you’ve launched your business without a plan, it’s not too late. You might even at this point be questioning how important it can be to plan if you’ve managed without one so far, but you will find it invaluable and you might find it puts your mind at rest to a certain extent.

Getting yourself back on track by setting some time aside to sort out a business plan, even if you’re in the middle of running your business, will be time well spent. If your business is going well, chances are your time will be precious, but spending it this way will still be worth it. Conversely, if you find yourself with lots of time on your hands, then making a plan might help fix that too.

As with all paperwork, it can get overwhelming, so the sooner you get on with it the better. Whilst you’re on the subject of paperwork, it might also be worth checking that your public liability insurance and employers’ liability insurance policies are in order. It’s an easy thing to cross off your to do list and YOUR Insurance will be able to get a quote for you in minutes and can help you make sure you have the right cover for your business.


You can get free template business plans from several places including Business Link, but if these put you off at all (they can be rather long and off putting) then at least go through the above and get something basic committed to paper. Once you’ve started thinking through the key areas of your business, you might find the more intimidating elements fall into place by themselves.

Crucially, a business plan does not have to be set in stone. You can change it as your business changes and adapt it or enhance it when new opportunities arise. A good plan is a plan that can change after all.

YOUR Insurance specialises in public liability insurance for small and medium sized businesses involved in several trades and professions. You can compare quotes for your business online, or call one of our advisors on 0800 107 8949.