Your step-by-step guide to writing a business plan in NZ

What is a business plan, and why does it matter?

In short, a business plan is a document that sets out your goals and how you intend to achieve them.

Goals are specific targets or outcomes the business aims to achieve within a particular period. For example, a company might aim to achieve a 20% profit margin or launch a new product within six months.

A well-written business plan also outlines strategies and financial projections: 

• Strategies guide the actions the business will take to achieve its goals. 
  Financial projections are an estimate of the company’s future financial performance. 

The financial section of a business plan typically forecasts three things: 

• Revenue: the total amount of money a business makes from selling its products or services. 
• Expenses: the costs a business incurs to run its operations. 
• Cash flow: the money that flows in and out of a business over a specific period. 

A funding request is also typically included in a business plan if the business is attempting to lure investors. This part of the document outlines the company's future funding requirements over a certain timescale, such as the next five years.

Your NZ company’s business plan should also provide an in-depth description of your business. 

It will need to cover the company's products and services, its target market, the competitive landscape, and what marketing and sales approaches you will be taking. 

Three reasons every NZ business needs a business plan

1. It summarises the strategy of your business. This is essentially your plan for getting where you want to go. For your business, your strategy will guide your company's direction – not just now, but for years to come. 
2. It helps your business attract investment. This can be crucial for getting your business growing. Not all Kiwi entrepreneurs necessarily wish to seek out investors for their business plans. However, we’ve written this guide for those who do.  
3. It helps predict future business demands. It will include financial projections, for example. This way, you can be clear about what revenue, expenses, and cash flow everyone involved with your business (including investors) can expect. 

So, now that you know the “what” and “why” of business plans for Kiwi businesses, let’s explain the “how”.

How to create a successful business plan in 15 steps 

We’ve put together this guide for Kiwi entrepreneurs who will be looking for investors and who plan to hire staff at an early stage. However, your circumstances and requirements may be different. You may, for instance, be a sole trader launching a side hustle, in which case, you might not be recruiting other workers for a little while. 

So, you shouldn’t treat these 15 steps as a “one size fits all”. Instead, feel free to omit sections or to reorder when you do them, in line with your needs.

Step 1: Write a clear business profile 

This is the part​​ of your business plan where you introduce who you are, as well as your business, and the people supporting you to the reader. 

The standard order for this section is as follows: 

1. The cover sheet contact details
2. The executive summary
3. The background of your NZ company and the people helping you make it a reality. 

We explain these elements in further detail below. 

Step 2: Draft an effective summary

Typically, it’s just a few short paragraphs at the top of the document, aimed at people without technical or specialist knowledge. 

At its best, though, the executive summary is a crucial part of a business plan for “selling” the business to the reader. So, it is usually straight-to-the-point and focuses on getting across critical information. 

Pro tip: Write this section of the plan after you have completed the rest of the document. By then, you will have a better sense of how to summarise your business. 

Step 3: Provide business background and objectives

This section is an opportunity to briefly explain where you have come from, and how you have got to this point.

Step 4: Set measurable business goals

Think of goals as the big-picture things you want to achieve – your destination. They’re broad, ambitious, and give your business a sense of direction. Objectives, on the other hand, are specific steps that get you there. They’re measurable, actionable, and keep you on track. For example, if your goal is to open the best café in town, an objective might be to get 100 five-star reviews in your first year. Goals set the vision, and objectives make it happen.

Are you able to summarise your future plans for your NZ business? More than that, are you able to set specific, ambitious, but realistic goals, with a target date for achieving each of them? Perhaps you have a certain goal in mind for this year, the next three years, and even the next decade? 

If you can answer “yes” to all those questions, you’re in luck — this isn’t a part of your business plan where being wishy-washy will do. Writing down a laser-focused goal or mission (or several) will help you achieve it more easily as a Kiwi entrepreneur. 

Step 5: Describe your management team and advisors

Whether you like it or not, investors will decide whether to get involved with your business on the strength of the people who are already involved (or likely to become involved). 

So, this isn’t a section of the business plan to skip. 

• Be sure to list and describe your current management team (if you’ve got as far as setting up a team yet).
• Also, mention any advisors supporting you. These can include the likes of accountants, lawyers, business gurus, mentors, and consultants. They could even include a member of your family helping you, if they’re well-known in the industry. 
• Don’t forget to outline vacant positions, too – in other words, the roles you will recruit for that will help your business survive and grow. 

Step 6: Add key ownership and structure details

Now, it’s time to list all the owners of your business. If there are multiple owners, it’s a good idea to include a copy of your Deed of Partnership (a legally binding document that sets out each partner's rights, responsibilities, and obligations within a business). 

In this section of your business plan, you will want to talk about: 

• Organisational structure: what are the responsibilities of each management team member? Who reports to whom? 
• Recruitment policies: for many young and ambitious NZ businesses, there will be a need to hire staff at some stage. So, take the opportunity to explain what recruitment methods and policies you will follow. Being detailed about this will help reassure investors that your business will comply with minimum national standards and won’t suffer from avoidable retention and human resources issues. 

Step 7: Summarise your market research

By the time you come to write your business plan, you should have already done a certain amount of market research. After all, it will largely inform what your business plan looks like.

Market research refers to the organised process of collecting information about a business’s target market and its customers. This will help you understand the potential audience for your business’s products or services, and what your target customers will need and appreciate regarding price, choice, quality, and convenience. 

So, this will be the section where you describe:

• The market research you’ve done already 
• The market research you will need to do in the future 
• The market research methods you’ve used 
• How ongoing market research is (or will be) incorporated into your day-to-day business operations.

Step 8: Do competitor analysis

Many first-time entrepreneurs and business owners in NZ are well aware of the importance of researching their competitors. What they often aren’t so sure about is how to go about it. All too many Kiwis trying to do competitor research might simply fire up their industry rival’s website and note down the prices of their products or services. 

But if you want your competitor research to be worth the bother, you need to make it first-hand and in-depth. Directly sampling what your competitor offers – for example, trying out their cuisine as a customer if you’re setting up a local restaurant – could help you pick up vital insights that can’t be gained any other way. 

How does all that translate into what you put into your business plan? Well, you will need to identify: 

• Your competitors’ points of difference – in other words, the specific features, benefits, or qualities that set them apart in the industry.
• What your competitors do well.
• What your competitors don’t do so well. 

Step 9: Complete a SWOT analysis

After getting to know your market and competition well, it will be time to look at the broader picture of your SWOT: strengths, weaknesses, opportunities, and threats. 

Providing an in-depth SWOT analysis in your business plan will give the reader confidence that you know the factors that could affect your business. What’s more, it will show that you have considered how to deal with or make the most of these factors. 

Finally, we’ve reached the section of your business plan where you will set out your market research findings. Here, you will inform the reader about the size and potential of the group of customers your business is targeting (or looking to target). 

That will mean covering such elements as: 

• Market opportunities: Hopefully, by now, you will have a strong sense of what market gap you are looking to fill. So, be sure to identify that gap, whether any competitors are already partly filling it, and the revenue opportunity it presents. 
• Market description: Your target market might be other businesses or individuals. Whatever the situation, set out the vital demographic and geographical details here — for example, how old your target customers are and where they live. 
• Future markets: If there are markets that your business intends to target within a certain timeline, for example, the Australian market in the next two years, these can also be mentioned in the business plan. 
• Market size: This can cover both volume and value statistics, or any other data relevant to the success of your business. 
• Market structure: It might also be relevant to describe the supply chain of the market, including the connections between producers, suppliers, distributors, and the end consumer. Will your business have a place in this chain, or will it disrupt this structure?

Don’t fall into the trap of treating “everyone” as your target market! This can be a recipe for a business that lacks direction and doesn’t achieve the success it could otherwise be capable of. At the very least, you should be able to identify your most valuable target customers.

So, be sure to address these aspects in this part of your business plan: 

• A description of your target market, including demographic information and statistics, and your estimate of their average spend 
• How you will provide your product or service to meet the needs of this target market 
• The factors that will impact your target audience’s purchasing habits such as quality, convenience, and price. 

Don’t confuse the term “marketing” with “sales” or “advertising” – the former is broader than the latter two. It effectively encompasses the whole process of matching the product to the consumer. 

So, this is the part of your business plan in which you get detailed about your ongoing marketing strategy and budget. 

Typically, a marketing strategy can be segmented into the “four Ps”: 

• Product – the actual good or service that will be marketed 
• Price – how much the customer will pay for the product or service 
• Place – where and how the product will be made available to the customer 
• Promotion – the communication strategies that will be used to inform the customer about the product and persuade them to buy it. 

Readers interested in analysing the finest details of your NZ business’s financial situation will head to this section of your business plan. 

Whether you’re building a startup business plan or formalising a growing side hustle, you’ll need to lean on your market research, including any financial records that are publicly available for similar businesses. This will help you predict your own startup’s future financial status. 

Before your business can begin operating in NZ, it must adhere to various standards and processes. The exact ones you need to comply with will depend on the type of business you are running. 

So, you should check with the Inland Revenue Department (IRD) or the Companies Office to see which of the following may apply to your NZ business. 

As a general rule, though, this section of a business plan is likely to cover such aspects as: 

• The structure of the business: For example, you might decide to operate as a sole trader, a partnership, or a limited liability company. 
• Registration for goods and services tax (GST): You must do this as soon as you think you will earn more than $60,000 in 12 months. This applies whether you are a sole trader, contractor, in partnership, or a company. 
• Insurance: Common types of business insurance include premises insurance, contents insurance, and employer’s liability insurance. 

Finally, your business plan may detail various operational elements, such as: 

• Your business premises, including whether you have purchased or leased it, and why. 
• The equipment you need to operate the business, including whether you have bought or leased it, and your reasoning for this. 
  Your information technology (IT) needs, such as computers and servers.  
• IT solutions, including the IT setup you might already have, its reliability, its compliance standards, and the scope for it to be expanded. 

In summary, creating a successful business plan isn’t about length but clarity, goals, and follow-through.