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How to Write a Business Plan for a Sole Proprietorship

Starting your own business as a sole proprietor is an exciting journey, offering unparalleled flexibility and control over your professional destiny. Yet, navigating this path successfully hinges on having a clear, well-structured business plan. This essential document serves as your roadmap, outlining your vision, strategy, and the practical steps needed to bring your business to life. Here’s how to craft a business plan that lays the groundwork for your sole proprietorship's success.

Key Components of a Sole Proprietorship Business Plan

A robust business plan for a sole proprietorship encompasses several critical sections:

Executive Summary: Your executive summary should succinctly encapsulate your business concept, target market, and competitive advantages. This section is crucial as it sets the stage for the detailed plan.

Company Description: Offer an in-depth overview of your business, including its structure, the products or services you provide, and your overarching goals. This section lays out the essence of your business and its purpose.

Market Analysis: Conduct a comprehensive analysis of your target audience and competitors. This research is essential for carving out your niche in the market and developing strategies to serve your customers effectively.

Organization and Management: Describe your business's organizational structure and any external support, such as freelancers or consultants, you plan to utilize. This section outlines how your business will operate and scale.

Marketing and Sales Strategy: Detail your approach for attracting and retaining customers. This includes your marketing channels, promotional tactics, and sales processes.

Service or Product Line: Clearly explain what you're offering, focusing on the benefits to your customers and why there's a demand for your product or service.

Financial Plan: Include comprehensive financial projections, such as revenue forecasts, cash flow statements, and a break-even analysis. This section is vital for understanding the financial viability and planning for profitability.

Tailoring Your Plan to a Sole Proprietorship

Emphasize Personal Branding: As a sole proprietor, your personal brand is intrinsically linked to your business. Your plan should reflect how your personal strengths and network contribute to your business's unique value.

Build in Flexibility: One of the strengths of a sole proprietorship is its ability to adapt quickly. Your business plan should include flexible strategies that allow you to pivot in response to market demands or challenges.

Utilizing Resources and Tools

In the journey of drafting a comprehensive business plan for your sole proprietorship, leveraging the right tools and resources can streamline the process and enhance the quality of your plan. Here are two crucial areas where the right resources can make a significant difference:

Recommended Tools and Software

The market is replete with tools and software designed to simplify the business planning process, from formulating your executive summary to projecting your financials. Utilizing these can save you time, provide structure, and even offer insights you might not have considered. Some top recommendations include:

Business Plan Software: Platforms like Plannit AI or Bizplan offer guided experiences through the planning process, with templates and financial forecasting tools that make it easier to create a professional plan.

Financial Modeling Tools: Software such as Excel or Google Sheets, with templates for cash flow statements, profit and loss forecasts, and break-even analysis, can help you craft detailed financial projections.

Market Research Resources: Tools like Statista or Google Trends can provide valuable data on market trends and consumer behavior, informing your market analysis section.

Project Management Apps: Applications like Trello or Asana can help you organize your business planning process, set deadlines, and track progress.

Seeking Professional Advice

While tools and software can streamline the planning process, the insight and guidance from experienced professionals can be invaluable. Consulting with financial advisors, business mentors, or industry experts can offer several benefits:

Financial Planning: A financial advisor can help you create realistic financial projections, advise on funding strategies, and identify potential financial pitfalls.

Business Strategy: Business mentors or consultants with experience in your industry can offer strategic advice, critique your business model, and suggest ways to enhance your competitive advantage.

Legal and Regulatory Guidance: For questions about the legal structure of your sole proprietorship, intellectual property, or regulatory compliance, consulting with a legal expert is essential.

By combining the power of the right tools and software with the wisdom and experience of professional advisors, you can create a business plan that not only lays a strong foundation for your sole proprietorship but also positions it for long-term success and growth.

Common Pitfalls to Avoid in Your Sole Proprietorship Business Plan

Creating a business plan for a sole proprietorship is a critical step in setting up your business for success. However, even the most diligent entrepreneurs can fall into common traps that potentially hinder their progress. Being aware of these pitfalls can help you navigate your planning process more effectively and set a solid foundation for your business growth. Here are key mistakes to avoid:

1. Overlooking Detailed Market Research

One of the most significant oversights in business planning is insufficient market research. Understanding your target market's needs, preferences, and behaviors is crucial for tailoring your products or services effectively. Moreover, a deep dive into competitor analysis allows you to identify gaps in the market you can exploit. Avoid making assumptions without data to back them up, and invest time in gathering insights that will inform your business strategies.

2. Underestimating Financial Needs

Many sole proprietors underestimate the capital required to start and sustain their business until it becomes profitable. This can lead to cash flow problems, which are a common reason for business failure. When drafting your financial plan, include detailed projections for startup costs, operating expenses, and a buffer for unexpected costs. It's better to overestimate your financial needs and have surplus funds than to find yourself in a financial bind.

3. Neglecting a Marketing and Sales Strategy

Assuming that your product or service will sell itself is a critical mistake. A comprehensive marketing and sales strategy is essential for attracting and retaining customers. This strategy should outline your target market, marketing channels, promotional tactics, and sales process. Without a clear plan for how you will reach your customers and convince them to buy from you, even the best business ideas can flounder.

4. Ignoring the Need for Flexibility and Adaptability

The business landscape is constantly changing, and what works today may not work tomorrow. Your business plan should not be so rigid that it cannot accommodate changes in the market, customer preferences, or new opportunities. Incorporate flexibility into your plan, allowing you to pivot or adjust your strategies as necessary to respond to unforeseen challenges or take advantage of new trends.

5. Skipping Professional Advice

Even if you're a seasoned expert in your field, seeking advice from financial advisors, legal consultants, or business mentors can provide valuable insights you might have missed. These professionals can help you identify potential flaws in your plan and offer solutions you hadn't considered. Skipping this step could mean overlooking crucial aspects of your business that could lead to problems down the line.

A well-crafted business plan is your roadmap to success as a sole proprietor, but it's essential to be mindful of common pitfalls that can derail your efforts. By conducting thorough market research, accurately estimating your financial needs, developing a solid marketing and sales strategy, maintaining flexibility, and seeking professional advice, you can avoid these mistakes and build a strong foundation for your business. Remember, the goal is not just to start a business but to sustain and grow it into a successful venture.

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Why you need a business plan

Writing a business plan can seem like a big task, especially if you’re starting a business for the first time and don’t have a financial background. After all, business plans have changed over the years, and what lenders and investors expect now is different than it was even just 10 years ago.

What hasn’t changed is that writing a business plan will help you:

• Develop a strategy for success
• Reduce the risk of starting a business
• Explore new business ideas
• Attract investors and get funding

Learn more about how you can get value out of your business plan .

What is included in this business plan template?

This template includes definitions, guidance, and examples for every business plan component needed to start, fund, and grow your business.

After downloading the full template, you’ll receive instructions on how to fill out each of the following sections.

Executive summary

The brief summary of your business plan introduces everyone to your business, the problem you solve, and what you’re asking from your readers. It’s the first chapter of your business plan and the last thing you write once you have the details from your full plan.

Problem & solution

More than a simple description of your products and services – here you define the problem you’re solving and the value you provide. It’s also your chance to showcase any initial traction that shows you’re on the right track.

Market analysis and target market

A detailed assessment of the market you intend to enter, including the size and value of the market, potential customer segments, and their buying patterns.

Competition

Show that you know who your competitors are, what advantages you have, and how you’re positioning your business to be competitive.

Marketing & sales

Describe how you’ll reach and sell to potential customers with a detailed sales plan and chosen marketing channels.

What makes your business run? Outline the day-to-day workflows and what needs to be set up for your business to deliver a product or service.

Milestones & metrics

Set goals for your business that include the dates and people responsible for accomplishing them. This is what you’ll use to manage responsibilities, track growth, and execute your larger strategy.

Company overview and team

Provide a brief rundown of the legal and structural components of your company, including your history, current team, and gaps you need to fill.

Financial plan

Create well-structured and accurate financial statements to help you pitch to investors, land funding, and achieve long-term success. All without the help of a financial advisor or a degree in accounting.

While not required, this last section of your business plan is a great place to drop in additional documents that support and strengthen the rest of your plan.

How do you write a simple business plan?

If you’re exploring a business idea and don’t plan to pursue funding, then you actually don’t need to write a traditional business plan. Instead, opt for a one-page plan , which is far easier to create but just as effective.

To write a simple one-page business plan, follow the same core sections as a traditional plan. But instead of lengthy paragraphs and multiple pages covering each area of your business, stick with single sentences and bulleted lists.

If a one-page plan sounds like a better option, download our free simple business plan template to get started.

Start your business plan today

Whether you're writing a business plan to validate your business idea, secure funding, or grow your existing business – our template will help you achieve your goals.

Business plan template FAQ

What file formats are available for this business plan template?

You can download and use this business plan template as a Google Doc, .docx (Microsoft Word), or PDF.

Can you print out this template?

This is a printable business plan template that can be downloaded and printed no matter which format you choose.

Why should you start with a business plan template?

Starting with a good business plan template (like this one) includes everything you need to get started. It helps you organize your thoughts, and provides guidance, instructions, and examples to create an investor-ready and SBA-approved business plan format. It really speeds up the planning process. Oh, and it's 100% free!

Is writing a business plan easy?

Using a business plan template can make writing a business plan easier. Additionally, if you focus on just getting your information down quickly, with the expectation that you'll revisit and revise your plan, you can speed up and simplify the process .

Can someone write your business plan for you?

If you're still struggling to write your business plan even when using a template, you can look into hiring a professional business plan writer. We even have a free resource to help you ask just the right questions  to make sure you find the right plan writer.

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7 Business Plan Examples to Inspire Your Own (2024)

Need support creating your business plan? Check out these business plan examples for inspiration.

Any aspiring entrepreneur researching how to start a business will likely be advised to write a business plan. But few resources provide business plan examples to really guide you through writing one of your own.

Here are some real-world and illustrative business plan examples to help you craft your business plan .

7 business plan examples: section by section

The business plan examples in this article follow this template:

• Executive summary.  An introductory overview of your business.
• Company description.  A more in-depth and detailed description of your business and why it exists.
• Market analysis.  Research-based information about the industry and your target market.
• Products and services.  What you plan to offer in exchange for money.
• Marketing plan.   The promotional strategy to introduce your business to the world and drive sales.
• Logistics and operations plan.  Everything that happens in the background to make your business function properly.
• Financial plan.  A breakdown of your numbers to show what you need to get started as well as to prove viability of profitability.
• Executive summary

Your  executive summary  is a page that gives a high-level overview of the rest of your business plan. It’s easiest to save this section for last.

In this  free business plan template , the executive summary is four paragraphs and takes a little over half a page:

• Company description

You might repurpose your company description elsewhere, like on your About page, social media profile pages, or other properties that require a boilerplate description of your small business.

Soap brand ORRIS  has a blurb on its About page that could easily be repurposed for the company description section of its business plan.

You can also go more in-depth with your company overview and include the following sections, like in the example for Paw Print Post:

• Business structure.  This section outlines how you  registered your business —as an  LLC , sole proprietorship, corporation, or other  business type . “Paw Print Post will operate as a sole proprietorship run by the owner, Jane Matthews.”
• Nature of the business.  “Paw Print Post sells unique, one-of-a-kind digitally printed cards that are customized with a pet’s unique paw prints.”
• Industry.  “Paw Print Post operates primarily in the pet industry and sells goods that could also be categorized as part of the greeting card industry.”
• Background information.  “Jane Matthews, the founder of Paw Print Post, has a long history in the pet industry and working with animals, and was recently trained as a graphic designer. She’s combining those two loves to capture a niche in the market: unique greeting cards customized with a pet’s paw prints, without needing to resort to the traditional (and messy) options of casting your pet’s prints in plaster or using pet-safe ink to have them stamp their ‘signature.’”
• Business objectives.  “Jane will have Paw Print Post ready to launch at the Big Important Pet Expo in Toronto to get the word out among industry players and consumers alike. After two years in business, Jane aims to drive $150,000 in annual revenue from the sale of Paw Print Post’s signature greeting cards and have expanded into two new product categories.”
• Team.  “Jane Matthews is the sole full-time employee of Paw Print Post but hires contractors as needed to support her workflow and fill gaps in her skill set. Notably, Paw Print Post has a standing contract for five hours a week of virtual assistant support with Virtual Assistants Pro.”

Your  mission statement  may also make an appearance here.  Passionfruit  shares its mission statement on its company website, and it would also work well in its example business plan.

• Market analysis

The market analysis consists of research about supply and demand, your target demographics, industry trends, and the competitive landscape. You might run a SWOT analysis and include that in your business plan. 

Here’s an example  SWOT analysis  for an online tailored-shirt business:

You’ll also want to do a  competitive analysis  as part of the market research component of your business plan. This will tell you who you’re up against and give you ideas on how to differentiate your brand. A broad competitive analysis might include:

• Target customers
• Unique value add  or what sets their products apart
• Sales pitch
• Price points  for products
• Shipping  policy
• Products and services

This section of your business plan describes your offerings—which products and services do you sell to your customers? Here’s an example for Paw Print Post:

• Marketing plan

It’s always a good idea to develop a marketing plan  before you launch your business. Your marketing plan shows how you’ll get the word out about your business, and it’s an essential component of your business plan as well.

The Paw Print Post focuses on four Ps: price, product, promotion, and place. However, you can take a different approach with your marketing plan. Maybe you can pull from your existing  marketing strategy , or maybe you break it down by the different marketing channels. Whatever approach you take, your marketing plan should describe how you intend to promote your business and offerings to potential customers.

• Logistics and operations plan

The Paw Print Post example considered suppliers, production, facilities, equipment, shipping and fulfillment, and inventory.

Financial plan

The financial plan provides a breakdown of sales, revenue, profit, expenses, and other relevant financial metrics related to funding and profiting from your business.

Ecommerce brand  Nature’s Candy’s financial plan  breaks down predicted revenue, expenses, and net profit in graphs.

It then dives deeper into the financials to include:

• Funding needs
• Projected profit-and-loss statement
• Projected balance sheet
• Projected cash-flow statement

You can use this financial plan spreadsheet to build your own financial statements, including income statement, balance sheet, and cash-flow statement.

Types of business plans, and what to include for each

A one-page business plan is meant to be high level and easy to understand at a glance. You’ll want to include all of the sections, but make sure they’re truncated and summarized:

• Executive summary: truncated
• Market analysis: summarized
• Products and services: summarized
• Marketing plan: summarized
• Logistics and operations plan: summarized
• Financials: summarized

A startup business plan is for a new business. Typically, these plans are developed and shared to secure  outside funding . As such, there’s a bigger focus on the financials, as well as on other sections that determine viability of your business idea—market research, for example.

• Market analysis: in-depth
• Financials: in-depth

Your internal business plan is meant to keep your team on the same page and aligned toward the same goal.

A strategic, or growth, business plan is a bigger picture, more-long-term look at your business. As such, the forecasts tend to look further into the future, and growth and revenue goals may be higher. Essentially, you want to use all the sections you would in a normal business plan and build upon each.

• Market analysis: comprehensive outlook
• Products and services: for launch and expansion
• Marketing plan: comprehensive outlook
• Logistics and operations plan: comprehensive outlook
• Financials: comprehensive outlook

Feasibility

Your feasibility business plan is sort of a pre-business plan—many refer to it as simply a feasibility study. This plan essentially lays the groundwork and validates that it’s worth the effort to make a full business plan for your idea. As such, it’s mostly centered around research.

Set yourself up for success as a business owner

Building a good business plan serves as a roadmap you can use for your ecommerce business at launch and as you reach each of your business goals. Business plans create accountability for entrepreneurs and synergy among teams, regardless of your  business model .

Kickstart your ecommerce business and set yourself up for success with an intentional business planning process—and with the sample business plans above to guide your own path.

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Business plan examples FAQ

How do i write a simple business plan, what is the best format to write a business plan, what are the 4 key elements of a business plan.

• Executive summary: A concise overview of the company's mission, goals, target audience, and financial objectives.
• Business description: A description of the company's purpose, operations, products and services, target markets, and competitive landscape.
• Market analysis: An analysis of the industry, market trends, potential customers, and competitors.
• Financial plan: A detailed description of the company's financial forecasts and strategies.

What are the 3 main points of a business plan?

• Concept: Your concept should explain the purpose of your business and provide an overall summary of what you intend to accomplish.
• Contents: Your content should include details about the products and services you provide, your target market, and your competition.
• Cashflow: Your cash flow section should include information about your expected cash inflows and outflows, such as capital investments, operating costs, and revenue projections.

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Free Simple Business Plan Template

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Written and reviewed by:.

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Your business plan is the document that adds structure to your proposal and helps you focus your objectives on an achievable and realistic target. It should cover every aspect of what your business journey will look like, from licensing and revenue, to competitor and sector analysis.

Writing a business plan doesn’t need to be a difficult process, but it should take at least a month to be done properly.

In today’s capricious business climate there’s a lot to consider, such as the impact of political challenges like Brexit. These details are especially important in today’s bad economy. Investors are looking for entrepreneurs who are aware of the challenges ahead and how to properly plan for them.

Below, you’ll find everything you need to create a concise, specific and authoritative business plan. So let’s get started turning your idea into a reality!

Click here to download your free Business Plan template PDF – you can fill in your own details and those of your business, its target market, your customers, competitors and your vision for growth.

Our below guide will give you detailed advice on how to write a quality business plan, and our PDF download above can give you a clear template to work through.

But, creating an effective business plan needs….planning! That’s where a high quality planning tool can help.

We recommend creating an account with monday to use this tool – there’s even a free trial . Doing so means you can start your entrepreneurial journey on the right foot.

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What to include in your business plan template

There’s a lot of information online about how to write a business plan – making it a confusing task to work out what is and isn’t good advice.

We’re here to cut through the noise by telling you exactly what you need to include for a business plan that will satisfy stakeholders and help develop a key identity for your brand. By the end, you’ll have a plan to make even Alan Sugar proud and can get started with the most exciting part – running your business.

Throughout this guide, we’ve featured an example business plan template for a new restaurant opening in Birmingham called ‘The Plew’. In each section, you’ll be able to see what the contents we’re describing would look like in a ‘real-life’ document.

What to include in your business plan:

• Executive Summary
• Personal summary
• Business idea
• Your product or service
• Market analysis
• Competitor analysis
• Cash forecast
• Operations and logistics
• Backup plan
• Top tips for writing a business plan
• Business plan template UK FAQs

1. Executive summary

This section is a summary of your entire business plan. Because of this, it is a good idea to write it at the end of your plan, not the beginning.

Just as with the overall business plan, the executive summary should be clearly written and powerfully persuasive, yet it should balance sales talk with realism in order to be convincing. It should be no more than 1,000 words.

It should cover:

• Mission statement  – what is your company’s purpose?
• Business idea and opportunity – what unique selling point (USP) will you provide?
• Business model – how will your business operate?
• Business objectives – what are you aiming to achieve?
• Target market – who is your customer base?
• Management team – who are the owners/senior staff?
• Competition – who are you competing against?
• Financial summary – can you prove the business will be profitable?
• Marketing strategy – what is your marketing plan and associated costs?
• Timeline – how long will it take to launch/grow your new business?

It sounds like a lot – but don’t feel you have to spend hours putting this together. Here’s what the above information for an executive summary might look like when put into our example business plan template for ‘The Plew’:

Startups’ business plan template example: executive summary

2. Personal summary

Investors want to know who they’re investing in, as much as what. This is where you tell people who you are, and why you’re starting your business.

Outline your general contact details first, giving your telephone number, email address, website or portfolio, and any professional social media profiles you might have.

Run through this checklist to tell the reader more about yourself, and put your business ambitions into context.

• What skills/qualifications do you have?
• What are you passionate about?
• What is/are your area(s) of industry expertise?
• Why do you want to run your own business?

Here’s what our two fictional co-founders of ‘The Plew’ might write in their personal summaries for our example business plan. CEO Gabrielle Shelby, has highlighted her expertise in the restaurant industry, while CFO Freya Moore outlines her accounting and finance knowledge.

Startups’ business plan template example: personal summary

Richard Osborne, founder and CEO of UK Business Forums, says personality is important in a business plan.

“Having a strong, personal reason at the heart of your business model will help keep you going and give you the motivation to carry on,” he affirms.

3. Business idea

This section is essentially to offer a general outline of what your business idea is, and why it brings something new to the market.

Here, you should include your general company details, such as your business name and a  one-line summary of your business idea known as an  elevator pitch. This section should also list a few key business objectives to show how you plan to scale over the next 1-3 years.

We also recommend carrying out a SWOT analysis to tell investors what the strengths, weaknesses, opportunities, and threats are for your business idea. Think about:

• Strengths: ie. why is this a good time to enter the sector?
• Weaknesses: ie. what market challenges might you encounter?
• Opportunities: ie. what demand is your product/service meeting in today’s market?
• Threats: ie. how will the business be financed to maintain liquidity?

In the template below, you can see a breakdown of the above information for ‘The Plew’. At the top is its mission statement: “to craft an unforgettable dining experience in a chic atmosphere.”

Startups’ business plan template example: business idea

Need a business idea? We’ve crunched the numbers and come up with a list of the best business ideas for startup success in 2023 based on today’s most popular and growing industries.

4. Your products or services

Now it’s time to explain what you are selling to customers and how will you produce your sales offering.

Use this section to answer all of the below questions and explain what you plan to sell and how. Just like your business idea outline, your answers should be concise and declarative.

• What product(s) or service(s) will you sell?
• Do you plan to offer new products or services in the future?
• How much does the product or service cost to produce/deliver?
• What is your pricing strategy ?
• What sales channels will you use?
• Are there legal requirements to start this business?
• What about insurance requirements?
• What is the growth potential for the product or service?
• What are the challenges? eg. if you’re looking to sell abroad, acknowledge the potential delays caused by post-Brexit regulations.

What insurance and licensing requirements do you need to consider?

Depending on what your business offers, you might need to invest in insurance or licensing. Our How To Start guides have more details about sector-specific insurance or licensing.

Public Liability, Professional Indemnity, and Employers’ Liability are the most well-known types of business insurance. We’ve listed some other common other licensing and insurance requirements below:

In our example product/service page for ‘The Plew”s business plan, the founders choose to separate this information into multiple pages. Below, they outline their cost and pricing, as well as sales strategy. But they also include an example menu, to offer something a bit more unique and tantalising to the reader:

Startups’ business plan template example: product list and pricing strategy

5. Market analysis

This section demonstrates your understanding of the market you are entering, and any challenges you will likely face when trying to establish your company.

This section pulls all of your target market and customer research together to indicate to stakeholders that you are knowledgable about the sector and how to succeed in it.

• Who is your typical customer and where are they are based? Describe the profile of your expected customers eg. average age, location, budget, interests, etc.
• How many customers will your business reach? Outline the size of your market, and the share of the market that your business can reach.
• Have you sold any products/services to customers already? If yes, describe these sales. If no, have people expressed interest in buying your products or services?
• What have you learned about the market from desk-based research? What are the industry’s current challenges, and how has it been affected by the economic downturn?
• What have you learned about the market from field research? (eg. feedback from market testing like customer questionnaires or focus group feedback).

What is your marketing strategy?

Once you’ve highlighted who your rivals are in the market, you can provide details on how you plan to stand out from them through your marketing strategy. Outline your  business’ USP, your current marketing strategy, and any associated advertising costs.

‘The Plew’ identifies its target audience as young, adventurous people in their mid-30s. Because of the restaurant’s premium service offering, its audience works in a well-paid sector like tech:

Startups’ business plan template example: customer analysis

6. Competitor analysis

This section demonstrates how well you know the key players and rivals in the industry. It should show the research you have carried out in a table format.

Begin by listing the key information about your competitors. Don’t worry about sounding too critical, or too positive. Try to prioritise accuracy above all else.

• Business size
• Product/service offering
• Sales channels
• Strengths/weaknesses

Competitors will take two forms, either direct  or  indirect. Direct competitors sell the same or similar products or services. Indirect competitors sell substitute or alternative products or services.

Here’s a breakdown of the strengths, weaknesses, and opportunities, and threats presented by a competitor restaurant for ‘The Plew’ called Eateria 24. At the bottom, the founders have written what learnings they can take from the chart.

Startups’ business plan template example: competitor analysis

Check out our list of the top competitor analysis templates to download free resources for your business, plus advice on what to include and how to get started.

7. Cash forecast

Outline your financial outlook including how much you expect to spend, and make, in your first year

All of your considered costs can be put into one easy-to-read document called a monthly cash forecast. Cash forecasts contain:

1. Incoming costs such as sales revenue, customer account fees, or funding.

2. Outgoing costs such as staff wages or operating expenses. The latter can cover everything from advertising costs to office supplies.

For those firms which have already started trading, include any previous year’s accounts (up to three years) as well as details of any outstanding loans or assets.

Annual cash forecast: what is it?

By conducting 12 monthly cash forecasts, you can create an annual cash forecast to work out when your company will become profitable (also known as breakeven analysis) . You will break even when total incoming costs = total outgoing costs.

In your annual cost budget, make sure to also include month opening/closing balance.  This is important to monitor for accounting, particularly for year-end.

• Opening balance = the amount of cash at the beginning of the month
• Closing balance = the amount of cash at the end of the month

The opening balance of any month will always be the same as the closing balance of the previous month. If you are repeatedly opening months with a negative closing balance, you need to adjust your spending. Here’s an example of what ‘The Plew’s financials might look like in its first year of operation:

Startups’ business plan template example: cash forecast

8. Operations and logistics

Explain how your day-to-day business activities will be run, including key business partnerships around production and delivery.

A.) Production

List all of the behind the scenes information about how your business will operate. Include:

• Management team – who do you plan to hire as senior staff and why?
• Premises –  where will you be based? What will be the cost?
• Materials –  what materials/equipment will you need to make your product/service?
• Staffing –  how many employees will you hire? How much will they cost?
• Insurance – what insurance do you need for production?

B.) Delivery

Detail how your customers will receive your product or service. Include:

• Distribution –  how will you sell your product to customers?
• Transport –  how will you transport the product/service to customers or partners?
• Insurance –  what insurance do you need for delivery?

C.) Supplier analysis

Lastly, you should carry out a supplier analysis.  Write down 2-3 suppliers you plan to use as part of your business operations and evaluate them on factors like location and pricing.

In our example business plan for ‘The Plew’, the founders have chosen to present this information in an easily-digestible chart, breaking down the leadership and employees into two different areas: product development and operations.

Startups’ business plan template example: staffing section

9. Backup plan

Explain how you will manage any surprise losses if your cash forecast does not go to plan.

In the event that your business does not go to plan, there will be costs to incur. A backup plan outlines to potential investors how you will pay back any outstanding loans or debt.

In the short-term: 

If your cash-flow temporarily stalls, what steps could you take to quickly raise money or make savings? For example, by negotiating shorter payment terms with your customers.

In the long-term:

If you’ve noticed a drop in sales that seems to be persisting, what changes can you make that would improve cash flow longer term? For example, can you do more of your business online to reduce rent fees?

To placate investors even further, it’s a good idea to include details about potential support channels you can utilise (eg. a business network or contact) who might be able to help if you get caught in a sticky cash-flow situation.

Startups’ 5 top tips for writing a business plan

• Keep your predictions realistic. Your business plan should showcase your knowledge of the sector and what’s achievable. It’s not about impressing investors with big numbers or meaningless buzzwords.
• Don’t go over 15 pages. Business plans should be engaging, which means sticking to the point and avoiding a lot of long-winded sentences. Keep your executive summary to less than 1,000 words, for example.
• End with supporting documents. Use your appendix to include product diagrams or detailed research findings if these are helpful to your business case.
• Get a second pair of eyes. Everyone misses a spelling error or two – invite a trusted business contact or associate to look over your business plan before you send it anywhere.
• Leave enough time to write! It’s exciting to think about getting your business up and running – but planning is an important step that can’t be rushed over. Spend at least a month on writing to get all the details correct and laid-out.

At Startups.co.uk, we’re here to help small UK businesses to get started, grow and succeed. We have practical resources for helping new businesses get off the ground – use the tool below to get started today.

What Does Your Business Need Help With?

Designing a business plan is very important for laying the foundation of your business. Ensure you spend an appropriate amount of time filling it out, as it could save you many headaches further down the line.

Once your plan is complete, you’ll then be ready to look at other aspects of business set-up, such as registering your company. Sound daunting? Don’t worry!

Our experts have pulled together a simple, comprehensive guide on How to Start a Business in 2024, which will tell you everything you need to know to put your new plan into action.

• Can I write a business plan myself? Absolutely! There are plenty of resources available to help, but the truth is a business plan needs to reflect the owner's personal ambitions and passion - which is why entrepreneurs are best-placed to write their own.
• How long should a business plan be? We recommend your business plan is kept to a maximum of 15 pages. Keep it short and concise - your executive summary, for example, should be no more than 1,000 words.
• Is it OK to copy a business plan? While not technically illegal, copying a business plan will leave you in a poor position to attract investment. Customising your plan to your unique business idea and industry specialism is the best way to persuade stakeholders that you have a winning startup formula.

Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

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• Business finance and support

Write a business plan

Download free business plan templates and find help and advice on how to write your business plan.

Business plan templates

Download a free business plan template on The Prince’s Trust website.

You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances.

Business plan examples

Read example business plans on the Bplans website.

How to write a business plan

Get detailed information about how to write a business plan on the Start Up Donut website.

Why you need a business plan

A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.

A business plan helps you to:

• clarify your business idea
• spot potential problems
• set out your goals
• measure your progress

You’ll need a business plan if you want to secure investment or a loan from a bank. Read about the finance options available for businesses on the Business Finance Guide website.

It can also help to convince customers, suppliers and potential employees to support you.

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• Building Your Business
• Becoming an Owner
• Business Plans

Simple Business Plan Template for Entrepreneurs

Follow This Business Plan Outline to Write Your Own

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Pros and Cons of Using a Business Plan Template

Do i need a simple or detailed business plan, how to use this business plan template, table of contents, section 1: executive summary, section 2: business/industry overview.

• Section 3: Market Analysis and Competition

Section 4: Sales and Marketing Plan

Section 5: ownership and management plan, section 6: operating plan, section 7: financial plan.

• Section 8: Appendices and Exhibits

Ariel Skelley / Getty Images

Think you have a great idea for a business? The best way to find out whether your idea is feasible is to create a business plan .

A solid, well-researched business plan provides a practical overview of your vision. It can be used to ground your ideas into workable actions and to help pitch your idea to financial institutions or potential investors when looking for funding.

The standard business plan consists of a single document divided into several sections for distinct elements, such as a description of the organization, market research, competitive analysis, sales strategies, capital and labor requirements, and financial data. Your plan may include more or fewer sections to best represent your business.

The template presented here will get you well on your way toward your simple business plan.

Ready-made layouts

Free downloads

Generic, not customized

No financial guidance

Additional skills needed

• Ready-made layouts : Templates offer general guidance about what information is needed and how to organize it, so you’re not stuck looking at a blank page when getting started. Especially detailed templates may offer instructions or helpful text prompts along the way.
• Variations : If you know what type of business plan you need—traditional, lean, industry-specific—chances are you can find a specialized template.
• Free downloads : There are many free business plan templates available online, which can be useful for comparing formats and features, or refining your own.
• Generic, not customized : Templates typically contain just the basics, and there will still be a lot of work involved to tailor the template to your business. For instance, you'll have to reformat, refine copy, and populate tables.
• No financial guidance : You’ll need enough industry knowledge to apply financial models to your specific business, and the math skills to generate formulas and calculate figures.
• Additional skills needed : Some degree of tech savvy is required to integrate charts and graphs, merge data from spreadsheets, and keep it all up-to-date.

A corporate business plan for a large organization can be hundreds of pages long. However, for a small business, it's best to keep the plan short and concise, especially if you're submitting it to bankers or investors . Around 35 to 50 pages should be sufficient, and more allowed for extras, such as photos of products, equipment, logos, or business premises or site plans.  Your audience will likely prefer solid research and analysis over long, wordy descriptions.

An entrepreneur who creates a business plan is nearly twice as likely to secure financing and grow their business compared with those who do not have a plan.

The business plan template below is divided into sections as described in the table of contents. Each section can be copied into a document of your own; you may need to add or delete sections or make adjustments to fit your specific needs.

Once complete, be sure to format it attractively and get it professionally printed and bound. You want your business plan to convey the best possible impression. Make it engaging, something people will to want to pick up and peruse.

Enter your business information, including the legal name and address. If you already have a business logo, you can add it at the top or bottom of the title page.

• Business Plan for "Business Name"
• Business address
• Website URL

If you're addressing it to a company or individual, include:

• Presented to "Name"
• At "Company"
• Executive Summary................................................Page #
• Business/Industry Overview.................................Page #
• Market Analysis and Competition.........................Page #
• Sales and Marketing Plan.......................................Page #
• Ownership and Management Plan.......................Page #
• Operating Plan..........................................................Page #
• Financial Plan............................................................Page #
• Appendices and Exhibits........................................Page #

The  executive summary introduces the plan, but it is written last. It provides a concise and optimistic overview of your business and should capture the reader's attention and create a desire to learn more. The executive summary should be no more than two pages long, with highlights or brief summaries of other sections of the plan.

• Describe your  mission —what is the need for your new business? Sell your vision.
• Introduce your company briefly, sticking to vital details such as size, location, management, and ownership.
• Describe your main product(s) and/or service(s).
• Identify the customer base you plan to target and how your business will serve those customers.
• Summarize the competition and how you will get market share. What is your competitive advantage?
• Outline your financial projections for the first few years of operation.
• State your startup financing requirements.

This section provides an overview of the industry and explains in detail what makes your business stand out.

• Describe the overall nature of the industry, including sales and other statistics. Note trends and demographics, as well as economic, cultural, and governmental influences.
• Explain your business and how it fits into the industry.
• Mention the existing competition, which you'll expand upon in the following section.
• Identify what area(s) of the market you will target and what unique, improved, or lower-cost products and/or services you will offer.

Many business plans cover their products/services in a standalone section to add more detail or emphasize unique aspects.

Section 3: Market Analysis and Competition

This section focuses on the competitive factor of your business and justifies it with financial models and statistics. You need to demonstrate that you have thoroughly analyzed the target market, assessed the competition, and concluded that there is enough demand for your products/services to make your business viable.

• Define the target market(s) for your products/services in your geographic locale.
• Explain the need for your products/services.
• Estimate the overall size of the market and the units of your products/services that the target market might buy. Include forecasts of potential repeat-purchase volume and how the market might be affected by economic or demographic changes.
• Estimate the volume and value of your sales in comparison with any existing competitors. Highlight any key strengths over the competition in easily digestible charts and tables.
• Describe any helpful barriers to entry that may protect your business from competition, such as access to capital, technology, regulations, employee skill sets, or location.  

You may opt to split the target market description and competitive analysis into two separate sections, if either (or both) portray your business especially favorably.

Here's where you dive into profits, giving detailed strategic view of how you intend to entice customers to buy your products and/or services, including advertising or promotion, pricing, sales, distribution, and post-sales support.

Product or Service Offerings

If your products and/or services don't take up a standalone section earlier in the plan, here is where you can answer the question: What is your unique selling proposition? Describe your products and/or services, how they benefit the customer and what sets them apart from competitor offerings.

Pricing Strategy

How will you price your products/services? Pricing must be low enough to attract customers, yet high enough to cover costs and generate a profit. You can base pricing decisions on a number of financial models, such as markup from cost or value to the buyer, or in comparison with similar products and/or services in the marketplace.  

Sales and Distribution

For products, describe how you plan to distribute to the customer. Will you be selling wholesale or retail? What type of packaging will be required? How will products be shipped? If you offer a service, how will it be delivered to the customer? What methods will be used for payment?

Advertising and Promotion

List the various forms of media you will use to get your message to customers (e.g., website, email, social media, or newspapers). Will you use sales promotional methods such as free samples and product demonstrations? What about product launches and trade shows? Don't forget more everyday marketing materials such as business cards, flyers, or brochures. Include an approximate budget.

This section describes the legal structure, ownership, and (if applicable) management and staffing requirements of your business.

• Ownership structure : Describe the legal structure of your company (e.g., corporation, partnership, LLC, or  sole proprietorship ). List ownership percentages, if applicable. If the business is a sole proprietorship, this is the only section required.
• Management team : Describe managers and their roles, key employee positions, and how each will be compensated. Include brief résumés.
• External resources and services : List any external professional resources required, such as accountants, lawyers, or consultants.
• Human resources : List the type and number of employees or contractors you will need, and estimate the salary and benefit costs of each.
• Advisory board : Include an advisory board as a supplemental management resource, if applicable.

The operating plan outlines the physical requirements of your business, such as office, warehouse, or retail space; equipment; supplies; or labor. This section will vary greatly by industry; a large manufacturer, for instance, should provide full details about supply chain or specialty equipment, while a therapist's office can get by with a much shorter list.

If your business is a small operation (like a one-person, home-based consulting firm), you might choose to eliminate the operating plan section altogether and include the operating essentials in the business overview.

• Development : Explain what you have done to date to identify possible locations, sources of equipment, supply chains, and other relevant relationships. Describe your production workflow.
• Production : For manufacturing, explain how long it takes to produce a unit and when you'll be ready to start production. Include factors that may affect the time frame of production and how you'll deal with potential problems, such as rush orders.
• Facilities : Describe the physical location of the business. Include geographical or building requirements; square footage estimates (with room for expansion if expected); mortgage or leasing costs; and estimates of maintenance, utilities, and related  overhead costs . Include zoning approvals and other permissions that are necessary in order to operate.
• Staffing : Outline expected staffing needs and the main duties of staff members, especially the key employees. Describe how the employees will be sourced and the employment relationship (i.e., contract, full-time, part-time) as well as any training needs and how these will be provided.
• Equipment : Include a list of any specialized equipment needed, along with cost, whether it will be leased or purchased, and sources.
• Supplies : If your business is, for example, manufacturing, retail, or food services, include a description of the materials needed, reliable sources, major suppliers, and how you will manage inventory.

The financial plan is the most important section for lenders or investors. The goal is to demonstrate that your business will grow and be profitable. To do this, you will need to create realistic predictions or forecasts.

To avoid inflated expectations, a prudent financial plan underestimates revenues and overestimates expenses.

• Income statements : The income statement displays projected revenues, expenses, and profit. Do this on a monthly basis for at least the first year for a startup business.
• Cash-flow projections : The cash-flow projection shows your monthly anticipated cash revenues and disbursements for expenses. To be considered a good credit risk, it is important to demonstrate that you can manage your cash flow.
• Balance sheet : The  balance sheet  is a snapshot summary of the assets, liabilities, and equity of your business at a particular point in time. For a startup, this would be on the day the business opens.
• Breakeven analysis : Including a breakeven analysis will demonstrate to lenders or investors what level of sales you need to achieve to make a profit.

Section 8: Appendices and Exhibits

The appendices and exhibits section contains any detailed information needed to support other sections of the plan.  

Possible Appendix or Exhibit items include:

• Credit histories for the business owners
• Detailed market research and analysis of competitors
• Résumés of the owners and key employees
• Diagrams and/or research about your products and/or services
• Site, building, or office plans
• Copies of mortgage documents or equipment leases (or quotes)
• Marketing brochures and other materials
• References from business colleagues
• Links to your business website
• Any other material that may impress potential lenders or investors

SCORE. " Business Plan Template for a Startup Business ." Accessed April 28, 2021.

U.S. Small Business Administration. " Write your business plan ." Accessed April 28, 2021.

U.S. Small Business Administration. " SBA Recommended Business Plans and Length ." Accessed April 28, 2021.

Bplans. " Why Plan Your Business? Look at This Data ." Accessed April 28, 2021.

Marketing MO. " Pricing Strategy ." Accessed April 28, 2021.

Incorporate.com. " Write a Business Plan, a Step-by-Step Guide ." Accessed April 29, 2021.

Startup Nation. " The Five Costs You're Most Likely to Underestimate in Your Business Plan ." Accessed April 28, 2021.

Get serious with our free business plan template

Turn your business vision into a reality with our free, customisable business plan template. Available in single and multi-page format.

Download your free business plan template

Complete the form and we’ll send you our free, customisable template, so you can get down to business.

Bring your business ideas to life

Our easy-to-use, guided templates give you a roadmap for success.

Map your goals

Start moving in the right direction with a plan that covers all of the essential business basics. Outline your executive summary, vision statement and future goals.

Define products and services

Highlight your unique offerings and market strategy, including what you'll sell (and how you'll sell it). It’s time to show the world how you’re better than anyone else at what you do.

Attract investors

Show potential partners why they should invest in your business. A comprehensive financial forecast is key when looking to secure funding.

Why you need a business plan

Whether you’re an established company or just starting out, a business plan is vital for success. A well thought out plan helps you consider the essential elements of your business and define a winning strategy.

And through the process of writing a business plan, you’ll uncover new opportunities and unlock your business’s true potential.

We’re here to help you grow your business

Access everything you need to start planning your vision and how you’ll achieve it.

A guided experience

Our business plan templates are intuitive and easily accessible, for every business. Each section has helpful tips, prompts and instructions to guide you through all the components of your business plan.

Designed for your needs

We know that writing a business plan is not a one-size-fits all activity. That’s why we’ve put together both a streamlined single-pager and a comprehensive multi-pager. Now you can map out your needs at a high level, or outline your strategy in precise detail.

Helpful resources

Looking for more help on how to write a business plan? We’ve got you covered. Check out our resources on  how to start a business , or our  12-step guide on how to write a plan for your business .

All your questions answered about the MYOB business plan template

What’s included in the business plan template.

Both our single and multi-page templates cover all the essential elements of a business plan, including an business details, vision statement and goal setting, market strategy and customer demographics, funding and investment information. Our multi-pager adds further detail and contains helpful guidance for each section.

Is the business plan template customisable?

Yes! Our templates are completely editable, customisable and available in multiple formats, allowing you the flexibility to choose the structure that best suits your needs.

Do I need a business plan to start a business?

Technically no, however as the saying goes, if you fail to plan you are planning to fail. For instance, how can you measure how things are going, if you don’t know where you're at?

Why create a business plan?

A strong business plan can help you plan for the future, enabling you to foresee potential roadblocks and author the roadmap that will drive you toward success. Through the process of planning, you’ll analyse all the important aspects of your business, provide certainty to future investors, reduce risk and plot an actionable pathway to achieving your ultimate vision.

How often should I update my business plan?

It’s a good idea to update your plan to align with the current state of business, market and strategy. Set aside some time on a regular, periodic basis to review your plan and see what’s working and what needs adjusting.

• Sample Business Plans

Trading Business Plan

Starting a trading business can be challenging because you have to build contacts, negotiate, and whatnot. But amidst worrying about all these things, planning is the last thing you want to worry about.

While anyone can start a new business, you need a detailed business plan when it comes to raising funding, applying for loans, and scaling it like a pro!

Need help writing a business plan for your trading business? You’re at the right place. Our trading business plan template will help you get started.

Free Business Plan Template

Download our free trading business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write A Trading Business Plan?

Writing a trading business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

• Market Opportunity: Summarize your market research, including market size, growth potential, and marketing trends. Highlight the opportunities in the market and how your business will fit in to fill the gap.
• Marketing & Sales Strategies: Outline your sales and marketing strategies—what marketing platforms you use, how you plan on acquiring customers, etc.
• Financial Highlights: Briefly summarize your financial projections for the initial years of business operations. Include any capital or investment requirements, associated startup costs, projected revenues, and profit forecasts.
• Call to Action: Summarize your executive summary section with a clear CTA, for example, inviting angel investors to discuss the potential business investment.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

Say goodbye to boring templates

Build your business plan faster and easier with AI

Plans starting from $7/month

2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Describe what kind of trading company you run and the name of it. You may specialize in one of the following trading businesses:

• Retail trading
• Wholesale trading
• Export-import
• Dropshipping
• Describe the legal structure of your trading company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.
• Owners: List the names of your trading company’s founders or owners. Describe what shares they own and their responsibilities for efficiently managing the business.
• Mission Statement: Summarize your business’ objective, core principles, and values in your mission statement. This statement needs to be memorable, clear, and brief.
• Future Goals: It’s crucial to convey your aspirations and vision. Mention your short-term and long-term goals; they can be specific targets for revenue, market share, or expanding your services.

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

• Competitive Analysis: Identify and analyze your direct and indirect competitors. Identify their strengths and weaknesses, and describe what differentiates your trading business from them. Point out how you have a competitive edge in the market.
• Regulatory Environment: List regulations and licensing requirements that may affect your trading company, such as business registration, insurance, licensing, etc.

Here are a few tips for writing the market analysis section of your trading business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

• Logistics & shipping
• Warehousing & storage
• Distribution & fulfillment
• Additional Services: Mention if your trading company offers any additional services. You may include services like, product customization & branding, packaging & labeling, supply chain consultation, etc.

In short, this section of your trading plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

• Pricing Strategy: Describe your pricing strategy—how you plan to price your products and stay competitive in the local market. You can mention any discounts you plan on offering to attract new customers.
• Marketing Strategies: Discuss your marketing strategies to market your services. You may include some of these marketing strategies in your business plan—social media marketing, brochures, email marketing, content marketing, and print marketing.
• Sales Strategies: Outline the strategies you’ll implement to maximize your sales. Your sales strategies may include direct sales calls, partnering with other businesses, offering referral programs, etc.
• Customer Retention: Describe your customer retention strategies and how you plan to execute them. For instance, introducing loyalty programs, discounts or offers, personalized service, etc.

Overall, this section of your trading business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your trading business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

• Staffing & Training: Mention your business’s staffing requirements, including the number of employees or traders needed. Include their qualifications, the training required, and the duties they will perform.
• Operational Process: Outline the processes and procedures you will use to run your trading business. Your operational processes may include inventory management, sales & marketing, order processing, customer service, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your trading business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

• Founders/CEO: Mention the founders and CEO of your trading company, and describe their roles and responsibilities in successfully running the business.

It should include, key executives(e.g. COO, CMO.), senior management, and other department managers (e.g. operations manager, customer services manager.) involved in the trading business operations, including their education, professional background, and any relevant experience in the industry.

• Compensation Plan: Describe your compensation plan for the management and staff. Include their salaries, incentives, and other benefits.

This section should describe the key personnel for your trading business, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

• Profit & loss statement: Describe details such as projected revenue, operational costs, and service costs in your projected profit and loss statement . Make sure to include your business’s expected net profit or loss.
• Cash flow statement: The cash flow for the first few years of your operation should be estimated and described in this section. This may include billing invoices, payment receipts, loan payments, and any other cash flow statements.
• Balance Sheet: Create a projected balance sheet documenting your trading business’s assets, liabilities, and equity.
• Financing Needs: Calculate costs associated with starting a trading business, and estimate your financing needs and how much capital you need to raise to operate your business. Be specific about your short-term and long-term financing requirements, such as investment capital or loans.

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your trading business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample trading business plan will provide an idea for writing a successful trading plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our trading business plan pdf .

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Frequently asked questions, why do you need a trading business plan.

A business plan is an essential tool for anyone looking to start or run a successful trading business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your trading company.

How to get funding for your trading business?

There are several ways to get funding for your trading business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your trading business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your trading business plan and outline your vision as you have in your mind.

What is the easiest way to write your trading business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any trading business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Write a Business Plan for a Sole Proprietorship

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• Business Planning & Strategy
• Write a Business Plan
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• Preparing a Three-Year Business Plan
• What Is the Role of a Business Plan in Getting Venture Capital Funding?

A business plan for a sole proprietorship is just like any other business plan. The main difference in business plans, in general, is the purpose. If you are writing a plan to organize your existing small company, focus on how your company operates and your goals for the future. If you will use it to obtain funding, your focus should be how you will make profits by supplying a commercial need.

Research Your Market

Start your research by describing your target or best customers by gender, age, income level, buying habits and residential location. Then look at your competition. Compare your company to your competition in terms of product offerings, service, prices, marketing, brand image and profitability. This gives you information for establishing the future direction you want your company to take, goals for expansion, product lines, service improvements, marketing to increase market share and ways to increase profitability. If you are a startup business, researching your market helps you develop your business idea, initiate good practices from the start and position your launch to attract the attention of your target market. It also gives you an argument that your company can fill a niche that will result in profits, which is important if you are going after funding.

Sole Proprietorship

There are special problems faced by a sole proprietorship operated by one person. The biggest problem is that you can't do everything. While examining your market, look for outside services that are geared to helping you compete with larger companies. These might be telephone answering services and business center offices that supply office space, office machines, administrative services and conference rooms. The Internet can provide inexpensive, simple-to-use marketing services and other outsourced services to expand your business reach. These are important considerations for the operations section of your business plan.

Develop Your Idea

Use your market research to solidify your vision for your company. Write a one or two sentence mission statement that addresses what you do, for whom, when, where, why and how. Then build on that. Establish in detail how the company operates, your suppliers, sales agents, cost of goods, price points, marketing strategy and growth plans. The more detailed you express this vision, the more likely you will see holes in your plan, which is one of the benefits of writing a business plan; it enables you to solve problems before you encounter them.

Research Your Costs

Make a list of every expense you encounter including rent, employees, travel, legal services, business licensing, insurance, inventory, sales costs, marketing costs and delivery costs. Business plan software is a good source of spreadsheet programs that allow you to plug in these costs to see what kind of revenues you must generate for profitability. These programs also print out a good presentation of your financial projections for use in obtaining funding.

Write the Plan

Your business plan should be shorter than 50 pages and should include the following sections: executive summary, which is written last; description of industry, including how you fit in; business model, describing your products and services; target market, describing who will buy from you and why; marketing model, describing how you will reach your target market; revenue model, estimating revenues and discussing how you will achieve those estimates; management, listing the bios and skills your managers bring to the company as well as your outside advisory board; and your financial projections, which consist of spreadsheets including a profit and loss statement, sales projections, personnel projections, cash flow and balance sheet. Include a discussion of how you arrived at these financial projections and the assumptions you used.

• SBA.gov: How to Write a Business Plan
• Entrepreneur: An Introduction to Business Plans

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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4 Free Business Plan Templates: Where to find them and what you get

While some people argue about whether you need a business plan to be successful, you almost certainly will need one when opening bank accounts and seeking funding. Fortunately there are some good free business plan templates and advice online. Here we will review 4 of the best covering what you get and where to find them.

1)      Gov.uk – The ‘write a business plan’ page of the UK government’s website includes advice and a selection of different business plan templates so you can select which one is best for your business.

2)      The Prince’s Trust – Although The Prince’s Trust specialise in supporting young people their business plan template is available to anyone. At 16 pages it is substantially shorter than the one from Business Link and is less formal in tone. The Prince’s Trust plan also goes into more depth on the logistics of how the company is going to work and the reasons for starting it up.

3)      Microsoft Word – Microsoft have a start-up business template which you can download. When you open it up in word it runs to 28 pages and is full of questions, advice and points to consider. Compared to The Princes Trust and Business Link plans it is a lot more text heavy and takes some reading. It is also a lot more focussed on the financials of the company than the other two plans, concentrating on accounts payable, pricing and other financial planning considerations.

4)      Your Bank – One of the main reasons people do a business plan is because their bank asks them to. If this is your motivation then it makes sense to use a template your bank will like. Our business banking partners HSBC have a business plan tool, Natwest have an online form and Barclay’s offer plenty of advice . Many of the other main UK banks also have templates or advice online. Using the bank’s own forms should mean that you tick all of the boxes and answer all of the questions they are likely to be looking at which can only help make your meeting go more smoothly.

Whichever template you choose it is important that you invest the time to get your plan right before you try to use it. Most of these plans require you to do a considerable amount of research into your target market, customers and competitors. Don’t leave it until the night before your bank meeting to get it done!

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8 Sole Proprietorship Examples (2024 Guide)

Updated: May 8, 2024, 11:49am

Table of Contents

1. freelance writer, 2. photographer, 3. personal trainer, 5. freelance graphic designer, 6. housekeeper, 7. bakery owner, when to register as a sole proprietorship, is a sole proprietorship right for you, frequently asked questions (faqs).

A sole proprietorship is a business entity where all liabilities and financial obligations pass to the single owner of the business. Those choosing a sole proprietorship are usually in low-liability career fields and seek the administrative ease and flexibility that comes with this type of entity. We’ve compiled a list of eight different types of businesses that make good sole proprietorship examples.

A freelance writer provides written content for clients, either for print or digital publication. They may write about a number of topics and in numerous forms, such as blogs, articles, white papers, scripts, ads, e-books, emails and more. A freelance writer is an independent contractor and works with their clients as an external team member on specific assignments.

What makes a freelance writing business a good fit for sole proprietorship is that it is a low-liability risk and is flexible. Many writers are part-time freelancers, so being sole proprietors of their own individual businesses makes sense.

Photographers typically work for themselves taking pictures at weddings, graduations, events or for other specific purposes such as senior photos or marketing materials. Some work at studios while many work on location for whatever event they are capturing. Many photographers are part-time. Most are solopreneurs, meaning they work on their business all by themselves.

A photographer likely has business expenses for their travel and equipment, which they can deduct for their business on their own tax return. A sole proprietorship often makes the most sense for a photography business in many cases because it is a low-risk business without a lot of liability. There is little benefit to most photographers, especially as they are starting out, to register another business entity type.

Personal trainers typically work out of their homes or in the homes of their clients. Gyms aren’t likely to accept the liability of letting you train people in their building unless you are an employee, so that their insurance will cover any mistakes.

The liability that a personal trainer has can likely be covered, for the most part, by liability insurance. There isn’t a lot of risk to accepting money to train people in a home or through online training unless they are injured. Until your business becomes quite lucrative, there are few benefits to registering anything but a sole proprietorship.

Plumbers who work for themselves and don’t hire employees are good candidates for a sole proprietorship. Their liability is typically limited and covered by insurance. It can be difficult to get your own individual plumbing business off the ground so saving any costs you can is important.

Once you start expanding your business or hiring employees, then it might make sense to register a limited liability company (LLC).

The field of graphic design is another area that works well as a sole proprietorship. A graphic designer takes on photo or image work from a number of different clients, billing each separately.

They usually work alone and can easily hire independent contractors if they need work done outside their expertise. There is no real liability to the work, making it another great career field for sole proprietorships.

Starting a business as a housekeeper means finding homes to clean and establishing a regular list of clients. This can be difficult to do on your own, but you also aren’t likely to need to pay for help right away.

The business is very easy to start and since you’re operating in the homes of clients, their home insurance will most likely cover any potential liability (though you should have your own insurance). Starting out as a sole proprietorship makes sense until you need to hire regular help to keep up with increased business.

A housekeeping business is likely to outgrow a sole proprietorship. When you hire employees or start to bring in a significant amount of revenue, then you’ll likely want to register an LLC.

Owning a bakery with a single location makes your business a good fit for a sole proprietorship because it is stable with low liability potential. You’ll have insurance to cover mistakes, such as food illnesses or slip and falls in your bakery. If you operate your bakery under any name but your own legal name, you will need to file a DBA (doing business as) with the state or local government.

Many bakeries need to hire employees unless they are specialty bakers in small towns with short hours or a special order-only policy. A small-town baker is often a good fit as a sole proprietor while a more growth-minded bakery will need to eventually form a business entity such as an LLC.

An educational tutor usually picks up clients as they can. They often go to the clients’ homes or meet them at libraries. This makes this a perfect fit for a sole proprietorship and is similar to the freelance examples above. There’s little to no liability for being a tutor, especially if you offer services in a public space.

Choosing to run your business as a sole proprietorship can be a good choice for businesses with a very low liability risk that don’t want to deal with the administration that other business entity types require. Business owners who aren’t fully committed to their business and are just dipping their toes into the water of entrepreneurship will find this to be a good immediate option.

There is no registration necessary to form a sole proprietorship in most places, but you should file for a DBA (doing business as) name with your state, city or county if you use a name for the business that is anything other than your own legal name.

Some areas require all businesses to register their information with the city or county even if they are sole proprietorships, so be sure to understand your local laws. Additionally, you may be required to obtain a license to conduct certain types of business in your area.

Deciding what type of business entity to use when starting a business  is an important decision. You might be happy with a sole proprietorship or consider a partnership, LLC or corporation. Each comes with its own unique set of pros and cons . A sole proprietorship is the default business entity that your business falls into if you do nothing and are the only owner of your business. It carries the lowest setup fees and requires very minimal paperwork.

A sole proprietorship is typically the best option for very small businesses where no employees are needed. If you are in a low-liability profession and do not need investors, a sole proprietorship may be the right choice for you.

As your business grows and you need employees or investors or want more tax advantages, you can consider other entity types. In particular, if you become concerned about protecting your personal assets from the liabilities of your business, forming an LLC can be a great idea.

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Which is better: a sole proprietorship or an LLC?

Sole proprietorships and limited liability companies (LLCs) are used for different purposes. An LLC is typically best for businesses with more liability potential and those that need to hire employees. An LLC also gives you more flexibility in how your business is taxed since you can elect to be taxed as a corporation. Learn how to set up an LLC .

What are the best online legal services?

Businesses of all sizes will need a lawyer at some point, whether that is to register their business or to deal with a client that isn’t paying. The best online legal services are affordable and able to quickly solve your legal issues. You can read our guide to the best online legal services to learn more.

Can you convert an LLC to a sole proprietorship?

You can, but it requires you to dissolve the LLC first, which is known as a dissolution. The steps involved include getting approval from all members of your LLC and filing your dissolution documents with the state agency that you filed your articles of incorporation with, which was likely the secretary of state. Then, you have to alert all of your creditors that you are dissolving the LLC so that you can receive your final bills from them and pay them. You must also file all tax forms with the federal government as well as on the state and local levels if necessary. The final steps include transferring any assets that you have to the sole proprietorship, publishing your dissolution, such as in your local newspaper or a posting on your social media sites, and transferring all business licenses from your LLC to your sole proprietorship.

What company is a sole proprietorship?

A sole proprietor is someone who owns a business independently and hasn’t registered it as another type of business entity. Many sole proprietorships never register with the state, but it is recommended to file a DBA if you are using a name other than your own legal name. Sole proprietorships do not have multiple owners, and they are not registered as LLCs or corporations.

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Develop your business plan

On this page

Why you need a business plan

Use our business plan tool, download a detailed business plan template, tips to help you write your business plan.

Whether you've just started out or have been running your business for years, business planning can be the key to your success. Having a business plan:

• helps you to prioritise – it gives your business direction, defines your objectives, maps out how you'll achieve your goals and helps you to manage possible bumps in the road
• gives you control over your business – the planning process helps you learn about the different things that could affect your success. If you're already in business, it helps you to step back and look at what's working and what you can improve on
• helps you seek finance – if you're seeking finance for your business, you'll need to show banks and investors why they should invest in your business.

It will help you to develop a shorter business plan to:

• evaluate a new business idea
• set some goals for the year ahead
• keep your business on track.

Use this template if you are seeking finance for your business or want to include more detail in your business plan.

Business plan template

1. Determine what your plan is for

Does your business plan have more than one purpose? Will you use it internally, or will you share it externally, for example with potential investors or banks?

Deciding what the purpose is, can help you develop your plan for the right audience. If the plan has been developed for third parties, you will need to determine what they’ll be most interested in.

2. Prepare your finances

Use our detailed business plan template if you are seeking finance.

Lenders and investors will want to know if your finances are in order and your business is in a strong financial position. They'll want to know how much money you currently have, how much money you need and how much you expect to make in the near future. While a bit of extra funding will help you ensure you’re covered for unexpected costs, be realistic and avoid asking for more than you need.

If you're starting out and don't have financial information yet, our template provides resources to help you get your finances ready.

3. Write your summary last

Summarise the main points of your business plan using as few words as possible. You want to get to the point but not overlook important facts. This is your opportunity to sell yourself, but don't overdo it. The summary should include details about your business, market, goals and what makes you different from other businesses.

4. Get help

Don't leave your business plan to the last minute. It takes time, research and careful preparation to develop an effective business plan.

If you aren't confident in completing the plan yourself, consider getting a professional to look over it and provide advice.

There are a number of government services available to help you plan, start or grow your business. These services can provide general advice, workshops, seminars and networking events, and can even match you with a mentor or business coach.

Get expert help from a business adviser in your area .

5. Review your plan regularly

As your business changes, your plan will need to change to ensure your business is still heading in the right direction. Having your plan up-to-date can keep you focused on where you are heading.

It's a good idea to keep a record of each version of your business plan.

6. Protect your plan

Having an understanding with third parties when distributing a plan could be enough protection for some businesses. But if you have innovative business practices, products or services, you may want people to sign a confidentiality agreement to protect your innovations.

It may also be a good idea to include some words in your plan asking the reader not to disclose the details of your plan.

Start writing and developing your marketing strategy.

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Benefits of a business plan

Your business plan outlines:

• your vision for the business
• the actions that will help you achieve it

When you are starting out, your business plan can help you to secure financing and investment. But your business plan does more than tell others what your plans are. A good business plan can help you test the feasibility of your new business idea, set operational and financial objectives, and make sure your business is manageable and effective.

You will need to revisit your business plan regularly as your business evolves and the business environment changes. These changes could include increased competition, advances in technology or the expectations of your customers.

What to include in your business plan

A clearly written business plan should include:

• the vision and direction of your business – where are you now and where do you want to be?
• a SWOT (strengths, weaknesses, opportunities, threats) analysis – a good business plan won't only identify ways to make your business idea work, it can also help you identify reasons why your idea might not work so you can address them before you invest time and money
• a force field analysis – for each issue identified in your SWOT analysis, identify the positives and negatives of each issue and the actions you will take to address the issue

Write your business plan

Whether your business is just starting out, you're looking to sustain or you're looking to grow, our guide to writing a business plan can help you clarify your goals, figure out your barriers and come up with a plan of action.

Video: How to write a business plan in 8 steps

View transcript.

Whether you're planning to start a business or have been running it for years, business planning is the key to your success. A business plan helps you get finance, gives you control and direction and helps you set priorities.

Step 1: Define your vision

When you start a business, you have a clear goal to achieve this vision. After some time, the clarity of your vision may become blurry. Writing down your vision will help you define it for your staff to identify with your mission. Where are you now? Where do you want your business to be in the future?

Step 2: Set your goals

Make your goals and objectives realistic. Plan your short-term, mid-term, and long-term goals, including choosing your location; the number of customers you plan to reach and your customer demographics; your sales targets - revenue and profit margins; what you will outsource; your required staff numbers; and your growth strategy. Planning this strategy will help realise your dream and make your business thrive.

Step 3: Define your unique selling proposition

What makes you different from your competitors? Highlight the characteristics that make your business stand out from your competitors. Is there demand for your range of products or services? What can your business offer to increase demand?

Step 4: Research your market

Who are your competitors? What product range or services do they offer? Where are the gaps? Where is demand greater than supply and for which products or services? What are the current and future industry trends? How do you leverage these opportunities?

Conduct a SWOT analysis to explore the Strengths, Weaknesses, Opportunities and Threats faced by your business; Think of all possible scenarios. List the issues and conduct a Force Field Analysis for each. This will help you determine clear actions to implement in order to address them.

Step 5: Know your customer

Do your research and define your target audience. Customers are spoilt by choice, so find out their buying habits. What does your ideal customer want? Get their feedback. Who are you targeting by age, gender, behavioural patterns or location? Find your niche.

Step 6: Set your marketing goals

Consider the product range and stock quantities to output or warehouse. Create a product development strategy. What is the price you should set to achieve your desired revenue? How will you handle distribution and delivery? What tools will you use for promotion?

Step 7: Define your marketing strategy

Include your chosen social media channels and engagement. How and where will you advertise - search engine marketing, print, radio or other media? Will you attend industry, trade or networking events?

Step 8: Talk to your accountant

Do your sums - are your financial goals and propositions realistic? How can you improve cash flow? How can you achieve your goals? Good business planning is a three-stage process:

• You PLAN for the future.
• You TRACK your progress.
• And you LEARN from your experience.

One of the most important things to remember is that a business plan is a living document. Just as your business evolves over time, so too should your plans. Set reminders in your calendar to revisit your plan every 3, 6 or 12 months. It's important to revise your goals according to your current status as changes occur over time. Make planning part of your business. It doesn't have to be onerous and it doesn't have to be done in solitude. Make it fun, get creative, and include others in your process.

For more information on business planning, visit business.vic.gov.au where you can access tools, workshops and resources to help you plan for your success.

Create your one-page action plan

A one-page action plan is an overview of the current situation, where you want to be and what you need to do to get there. It's also a practical way to record the outcomes of the planning process.

A one-page action plan has the following elements:

• 'Now' analysis – Summarise your current situation and issues in 4 or 5 points.
• 'Where' analysis – What is your vision? What is your competitive advantage? What are your key objectives?
• Strategies – What are the 3 or 4 key strategies you need to work on over the next 12 months? You can draw these from the SWOT analysis in your business plan.
• Action plans – List about 3 or 4 of the most important actions to complete to help achieve your strategies. You can draw these from the analysis of your key issues and strategies in your business plan.
• Timing – State when you aim to achieve the result and who is responsible for each task. These should be in priority order and are critical for accountability.

Get help in person

If you’re a first time business owner then you might need help working out how to action some of the steps you want to take. This might mean talking to an accountant, other business owners, a mentor, business coach or joining an industry group or your local chamber of commerce.

There's plenty of support available in Victoria to help you upskill and put you on the right track:

• Try one of our mentoring services or workshops .
• Get free advice and speak to subject matter experts with the Small Business Bus .

How to Make a Business Plan for a Sole Proprietorship

by Devra Gartenstein

Published on 1 Jan 2021

Sole proprietorships tend to be closely held companies whose success and longevity depends on an owner-operator with sufficient skills and resources to keep the business going. A business plan for a sole proprietorship must proactively address the challenge of demonstrating that the owner is financially responsible, as well as sufficiently skilled, to ensure that the company will meet its goals. The process of creating an honest and realistic business plan that highlights your involvement in the company will demonstrate to investors that you are worthy of their money. It will also help you to lay out a useful map to follow as your company grows.

Write a company description that highlights your experience and skills. Provide information that will convince potential investors that you are the ideal person to be owning and operating this particular business. For example, if you are writing a business plan for a new restaurant and you have held chef positions at prestigious restaurants, include this information in your company description. Also provide information about qualities that make you qualified to own and operate a business, such as strong management, marketing or interpersonal skills. If you have built a reputation as an expert in your field, mention this, as well.

Provide detailed information about your personal finances in the financial section of your business plans. Use bank statements, as well as your personal bookkeeping records, to create a balance sheet listing all of the money and tangible assets you own and the money that you owe. Create a cash flow projection for your first three years in business. Incorporate all of the capital that you envision bringing to the business through personal equity, personal loans or outside investment opportunities. Include your personal living expenses in the expenditure section of the chart in order to show that you are thinking about how you will support yourself while your company is getting off the ground.

Create a marketing plan detailing how you will use your personal reputation and connections to promote your business. If possible, develop a strategy to establish yourself as an expert in your field. Sole proprietors are particularly likely to act as the faces of their companies, and your business plan is the ideal place to think through the opportunities and challenges that you will encounter in representing your business and building a name for yourself that will encourage potential customers to support your business. Include strategies, such as writing articles, maintaining a blog, or teaching classes in a relevant field.

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Business.govt.nz, tax 101 for sole traders.

Sole traders are responsible for preparing, paying and ­filing their own taxes, as part of running a business. To help you accurately plan ahead, we’ve created a guide explaining different taxes and levies, and how they’re calculated. 

As a self-employed sole trader, you’re responsible for calculating, paying, and filing your taxes every financial year. How much tax you’ll owe will depend on a few key factors like:

• how much you earn
• whether or not you have a separate PAYE job
• what industry you belong to.

Because of this, completing your taxes isn’t as straightforward as setting aside a percentage of your income every time you get paid. Instead, you need to understand how taxes are calculated, so you can accurately plan and avoid expensive surprises.

There are three kinds of taxes and levies sole traders, contractors and solo operators need to be aware of:

When planning your cash flow, you might also need to think about:

• student loan repayments
• KiwiSaver contributions
• independent earner tax credit (IETC).

Follow the checklist for sole traders to help you work through financial essential tasks.

Start the sole trader checklist

There are alternatives to managing your finances on your own. You could use online accounting software, or work with an accountant or bookkeeper.

Getting financial advice

If you can’t pay your debts on time, it’s important to act fast. Talk to those you owe money to – they may agree to a more manageable payment plan. Also check if you are getting paid on time so that you can manage your cash flow.

Introduction to taxes and levies

Getting paid on time

If you pay your tax right, you can qualify for a first-year tax discount and avoid potential penalties.

Your net profit – what you earn after paying work related expenses – is taxed through your IRD number based on how much you’ve earned in your financial year.

While you’re a sole trader, you must file IR3 income tax return at the end of each year.

If you pay all your first-year income tax before the financial year-end on March 31, you may qualify for a discount. Talk to an accountant about how you can do this.

Early payment discount

See how your income will be split into brackets

New Zealand uses a progressive tax system. This means you don’t pay a flat rate percentage of income tax on all your income. Instead, your income is split into brackets, each with its own tax rate.

Income tax rates (from 1 April 2021)

Source: Inland Revenue

Let’s say you earn $40,000 as a part-time employee, and $10,000 as a contractor. Your taxable income is the sum total of all income – so in this case, $50,000.

Even though $50,000 falls into the 30% tax bracket, you won’t owe 30% across your whole income. Instead, you calculate your income tax by applying the bands progressively.

After applying the different brackets, only $2000 of your $50,000 income will be taxed at 30%.

In this example, your total income tax bill will be $8,020. But because $40,000 of your income comes through a PAYE role, most of this tax bill will be paid directly by your employer.

Changes to income tax brackets are expected to apply from 1 July 2024.

When you first start out, you automatically get ACC personal injury cover from day one. It’s called CoverPlus. What you pay will be based on the type of work you do and your liable earnings.

You can choose to change to CoverPlus Extra which gives you more control over how much of your income you want ACC to cover and means you can lower the levies you pay.

Your first levy invoice will arrive after the end of your first year in business. After that, you’ll be invoiced once a year, usually in July or August.

Types of cover for self-employed (external link) — ACC

The ACC collects three different levies from all employers and workers in New Zealand.

• The Earner’s levy, a flat rate of $1.33 per $100 of your liable income.
• The Working Safer levy, a flat rate of $0.08 per $100 of your liable income.
• The Work levy, which is based on what kind of business you run. The riskier your line of work, the higher this levy will be.

”Liable income” refers to income between minimum and maximum threshold, as set by the ACC every year.

You can find out more on the ACC website.

Calculating your levies (external link)   — ACC

While the Earner’s levy and the Working Safer levy are both straightforward to calculate, you’ll need to find the specific Work levy rate set for your industry.

Use the ACC’s estimation tool to work out how much you’ll need to set aside overall.

Estimate your levy (external link) — ACC

Generally you are liable for GST (Goods and Services). It is only applicable to you if you make over $60,000 a year in self-employed income.

If you earn over $60,000 a year in self-employed income, click “read full”.

It’s a tax of 15% that you collect from your clients – you don’t pay this yourself.

For example, if you sell cakes for $200, and your cake-making business generates more than $60,000 a year, you’ll need to charge GST. The new cost for your cakes will be $200 + 15% GST = $230.

You can calculate the cost of your services and GST using a GST calculator.

Calculating your GST (external link) — Inland Revenue

If you’re GST registered, you can claim back GST you pay on things you buy for your business. You will also charge GST on what you sell, collecting the GST on the government’s behalf.

You can choose to voluntarily register for GST even if your annual turnover is less than $60,000. If you’re not sure whether you’ll earn more than $60,000 in a year, talk to an accountant about what your options are.

Registering for GST (external link) — Inland Revenue

Student loan repayments

It’s not a tax, but if you have an outstanding student loan, you’ll need to make regular repayments to Inland Revenue.

Student loan repayments are set at 12% of every dollar you earn past the minimum repayment threshold. This is only if you’re based in New Zealand. Different rates and rules apply for people based overseas.

Repaying my student loan when I earn salary or wages (external link) — Inland Revenue

If you have a student loan, as soon as you earn more than $20,020 you’re required to make repayments.

If you’re self-employed or earn income from other sources, you will need to make your own student loan repayments, this can be done when paying your year-end income tax.

The amount of your student loan repayments depends on your adjusted net income.

Paying off your student loan if you’re self-employed (external link) — Inland Revenue

Making voluntary student loan repayments through the year will help spread the load.

Writing right

Anna is a freelance writer. In her first year of business after graduating university, she earns $40,000. This self-employed income is her only income for the year. 

To calculate her end-year student repayment, she subtracts the annual repayment threshold from her income (currently $20,020), and multiplies the difference by 12%. 

Regular contributions to your KiwiSaver fund will help you better weather market fluctuations and make the most of compounding interest.

But if you can’t put a little aside regularly, it’s a good idea to make sure you’re contributing at least $1,042.86 to your KiwiSaver every financial year.

This will ensure you receive the full government contribution of $521.43 towards your savings.

KiwiSaver benefits (external link)   — Inland Revenue

Independent Earner Tax Credit (IETC)

The independent earner tax credit (IETC) is an entitlement for individuals – including sole traders and contractors – depending on your income after expenses and losses for the relevant financial year. 

Depending on your income, you’ll claim your IETC when you: 

• file an individual tax return (IR3)
• receive your automatically issued income tax assessment.

If you have a tax advisor, ask them to help you do this. 

Independent Earner Tax Credit (external link) — Inland Revenue

Grab a first-year tax discount

Calculating your taxes

If you’re not sure where to get started, you can use this free sole trader tax calculator as an indication of how much to start putting aside.

Tax: Self-employed (external link) — Inland Revenue

You can also find guidance on GST and how you can navigate the end of the financial year.

End of tax year: Know what to do (external link) — Inland Revenue

Getting advice

When you’re deep in the day-to-day of running your business it can be hard to keep track of the bigger picture. Seeking advice from different sources can give you a fresh perspective on your business. Consider getting help from:

• a traditional accountant
• a digital accountant 
•  business mentors
•  investment advisors
•  business incubators
• Regional Business Partner Network

Seeking advice from an accountant or bookkeeper can free up time for you to focus on what you do best – your job. 

Getting business planning advice

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Sole trader checklist

Use the easy-to-follow checklist to help with business operations as a sole trader.

Basic tips for reducing your tax bill

Forecast your cash flow.

Forecasting your cash flow helps you have better conversation with your bank or advisor.

Funding and other government help

If you’re a sole trader or contractor you may be entitled to government benefits and other programmes to help you.