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Before you start your business plan

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Important things to think about before you start the business planning process.

What’s the point of a business plan?

You might see a business plan as a chore: something that you don’t have time for and that no one is going to read.

But a good business plan should be a tool that you refer to again and again, and which sets you on course to take on new opportunities and overcome challenges.

The business plan itself is not really the most important part of this process – it’s the business planning that makes the difference. Business planning should be exciting, and can even be fun. It’s a chance for you and your colleagues to use your experience and passion to work out how on earth you’re going to achieve your mission.

It shouldn’t be about one person sitting in a room on their own, writing a long document. It should be a process of discussion, collaboration, learning and problem solving. The plan is simply the end result of this process – and the beginning of the next stage.

A business plan is:

  • a live document that you refer to regularly and which can be changed and updated
  • a toolkit to help guide your actions and steer you towards your aims
  • a great way to showcase your organisation, passion and creativity
  • an opportunity to work out your finances and demonstrate your financial sustainability
  • a way of showing how you achieve social impact
  • a statement of where you are now and where you want to be.

What are you going to do with your business plan?

Before you start, think about what you’re going to do with your plan once you’ve completed it.

  • What are you trying to achieve?
  • Who’s going to read it?
  • Is it going to be published on your website?

These things will make a difference to how you write and present your plan. Your focus might change, depending on the purpose of the document.

This table gives some examples of how you could use a business plan in different situations.


Who will read it

What you should focus on

You’re applying for a major grant from a new funder.

Funding officer, funding committee

Impact and outcomes, value for money

You’re a new organisation.

Staff and board, potential partners and supporters

Operational plan, robust financial planning, market research

You’re about to launch a big push for new donors.

General public, existing donors, press and media

Being easy to read, accessible – perhaps publish on your website

Being visual, with key social impact statements drawn out

Clear aims and objectives with a roadmap of how you’ll use donations to get you there

You’re applying for social investment for a new building.

Social investment provider, bank manager

Strong financial planning and forecasts, social impact, a clear ask

You’ve just lost a major contract and had to make people redundant.

Board, staff, partners, other funders/commissioners

Reassurance that you can come out of the crisis: strong financial planning, realistic short term aims and objectives, longer term strategy for rebuilding

You’re an existing charity that wants to start trading.

Board, existing partners or funders, bank manager

Robust financial planning and realistic forecasts, thorough market research and marketing strategy

What’s the difference between a strategy and a business plan?

Many organisations, particularly charities, publish a strategy that incorporates an overview of their operational plan.

They might also have a business plan that references their strategy, but which is used as an internal document.

There are no hard and fast rules on what to include in each document, but it’s useful to think about two different processes.


Your strategy should be a set of high-level decisions that set priorities and purpose. These decisions are based on what you believe are the best way of achieving your mission, and where you believe your organisation is best placed to make a difference.

A strategy document is likely to include a lot of information about the issues that you’re trying to address and the impact that you want to have.

Get more help with strategy in our knowledge bank.

Business plan

Your business plan is a much more detailed description of how you’ll achieve your aims, the market in which you’re operating and the resources you’ll need.

It will probably include an operational plan that describes your main activities or outputs, and important milestones, timescales and performance indicators.

If the strategy is a picture of the house you want to build, the business plan shows the full blueprint – the wiring, the plumbing, the foundations and the workers.

Page last edited Feb 01, 2017

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