Most UK founders write a business plan for one of three reasons: to apply for a Start Up Loan, to approach a bank, or to pitch an investor. Each audience wants slightly different things, but the underlying structure is the same. This guide walks through every section, explains what readers actually look for, and links to a free template you can copy.
Direct answer
A business plan is not a bureaucratic box-tick. It is the document that forces you to confront whether your idea makes financial sense — before you spend money finding out the hard way. Use the key facts, step list and official source links on this page to confirm the decision before you spend money or register anything.
- Start Up Loan max
- £25,000
- Typical length
- 8–15 pages
- Forecast period
- 12–36 months
- Template
- Free — see below
Checklist
Quick checklist
- Define your business concept in one clear sentence
- Identify your target customer and their problem
- Research your three closest competitors
- List all startup costs and ongoing monthly costs
- Build a 12-month cashflow forecast
- Write your marketing and sales strategy
- Draft the executive summary last
- Have a trusted person read it for clarity and realism
Section 01
Why you need a business plan
A business plan serves two audiences: external readers (banks, lenders, investors) and you. For external readers, it demonstrates that you have thought rigorously about the market, the competition, and the numbers. For you, it is the document that reveals the assumptions you are making — and whether they are realistic.
- Required for all Start Up Loan applications (British Business Bank mandates a plan and a 12-month cashflow forecast).
- Most UK high-street banks will not consider a business loan without one.
- Angel investors and VCs use it as a first filter — not to fund you, but to decide whether to take a meeting.
- Even if you need no external funding, writing a plan forces you to stress-test your pricing, costs, and market assumptions.
Section 02
The eight sections every UK business plan needs
- 01
Executive summary
One page. Written last, placed first. Summarise what the business does, who it serves, what problem it solves, the market opportunity, and what funding you are seeking. Lenders read this first — if it does not compel them to read on, the rest does not matter.
- 02
Business description
What the business does, its legal structure (sole trader, limited company, partnership), the trading name, registered address, and the date you intend to start trading. Include a brief history if you are already trading.
- 03
Market analysis
Who are your customers? How large is the addressable market? What evidence do you have that they will pay for what you are selling? Use real data — ONS statistics, industry reports, or your own customer research. Avoid vague claims like 'the market is worth £X billion'.
- 04
Competitive analysis
Who are your competitors? How do you differ from them? What is your sustainable competitive advantage — price, quality, location, specialisation, or relationships? Be honest: lenders distrust plans that claim to have no competition.
- 05
Products and services
Describe what you sell, how it is priced, and why customers will choose it. Include your pricing rationale — cost-plus, value-based, or market-rate. If you have IP, mention it here.
- 06
Marketing and sales strategy
How will you acquire customers? What channels will you use — SEO, social media, word of mouth, trade events, cold outreach? What is your estimated cost per acquisition? What is your sales process from lead to payment?
- 07
Operations plan
How will you deliver your product or service? What equipment, premises, suppliers, or staff do you need? What are the key operational risks and how will you manage them?
- 08
Financial projections
A 12-month profit and loss forecast (minimum), a cashflow forecast, and a balance sheet if you are seeking significant funding. Show your assumptions explicitly — revenue per customer, average order value, churn rate, cost of goods sold. The cashflow forecast is the most important document for a Start Up Loan application.
Section 03
What the Start Up Loans scheme looks for
The British Business Bank's Start Up Loans scheme has funded over 100,000 businesses since 2012. Their assessors look for specific things that many applicants miss.
- A realistic cashflow forecast — not optimistic. Show a scenario where revenue is 30% lower than expected.
- Evidence of market research — customer quotes, survey results, or pilot sales are far more convincing than market size statistics.
- A clear explanation of how the loan will be spent — line by line, not 'working capital'.
- A credible founder background — you do not need sector experience, but you need to explain why you are the right person to execute this plan.
- A repayment plan — show that the business generates enough cash to service the 6% loan repayments.
Section 04
Common mistakes that get plans rejected
- Overestimating revenue in month one — lenders expect a ramp-up period of 3–6 months.
- Underestimating costs — especially insurance, professional fees, and the time before you get paid.
- Ignoring the competition — claiming you have none signals naivety.
- Vague marketing plans — 'social media and word of mouth' is not a strategy.
- No sensitivity analysis — show what happens if sales are 20% lower than forecast.
- Inconsistent numbers — the P&L, cashflow, and balance sheet must reconcile.
Section 05
Adapting your plan for different audiences
The core plan is the same, but the emphasis changes depending on who is reading it. For a bank, the cashflow forecast and security are paramount. For a Start Up Loan, the founder's personal commitment and realistic projections matter most. For an angel investor, the market size, growth potential, and your team's ability to execute are the focus.
- Bank loan: Lead with security (assets, personal guarantee) and cashflow coverage.
- Start Up Loan: Lead with personal story, market research evidence, and realistic numbers.
- Angel investor: Lead with market size, competitive moat, and team credentials.
- Grant application: Lead with social or economic impact and alignment with the grant's stated objectives.
Partner offers
Before you go — claim your reader offers
Two offers we recommend to every UK founder. Codes are exclusive to readers of this guide.
Business bank account
Reader offerTide Business Account
£200 free cash
£75 when you complete £100 of card transactions within 30 days, plus a further £125 when you deposit £5,000 within 7 days. No credit check, open in 5 minutes.
REFER200Business credit card
Reader offerCapital on Tap business credit card
7,500 free points
Get 7,500 points (worth £75) when you complete your first card transaction within 30 days. 1% uncapped cashback. Up to £250k credit limit.
SETTINGUP18+, UK residents only. Offers are subject to each provider's terms. Tide: £75 paid after completing £100 of card transactions within 30 days of opening, plus a further £125 paid after depositing £5,000 within 7 days (total £200, code REFER200). Capital on Tap: 7,500 points (≈ £75) after first card transaction within 30 days; credit subject to status. We may receive a commission if you sign up — it doesn't change the offer to you.
Common questions