How to write a business plan for UK funding

The executive summary is the most-read section of any business plan, yet it should be written last. It is a 200–400 word distillation of the entire document: what the business does, the market opportunity, the competitive advantage, the financial ask, and the use of funds. Write the rest of the plan first, then summarise it here.

For funding applications, the executive summary answers one question for the reader: "Is this worth reading in full?" A weak summary — vague, full of jargon, or failing to specify the amount sought — results in rejection before the rest of the plan is even opened. State the ask clearly in the first paragraph: "We are seeking £75,000 to fund equipment purchase and working capital for the first six months of trading."

Keep it free of superlatives. Claims such as "unique", "revolutionary", or "no competition" are red flags for experienced readers. Every credible business plan acknowledges competition and explains specifically why this business wins.

UK lenders and grant bodies expect evidence-based market analysis, not estimates. Use publicly available sources: the Office for National Statistics (ONS) for sector size and growth data, Companies House for competitor financial information, and the Federation of Small Businesses (FSB) for SME sector benchmarks.

Define your addressable market precisely. "The UK cleaning industry is worth £5.6 billion" (a common quoted figure) means nothing for a local cleaning business. "There are 47,000 registered businesses in the East Midlands food service sector, of which 6,200 are within our delivery radius" is actionable and credible. Show the segment you are targeting, not the total industry.

Include three to five named competitors with brief profiles: turnover (from Companies House filings), number of locations, and customer positioning. Explain specifically how you will win customers from them or serve a customer segment they currently underserve. Generic claims about "better service" or "lower prices" do not satisfy this requirement.

Financial projections must cover three years: monthly P&L for year one, quarterly for years two and three. Include a cash flow forecast alongside the P&L — they are not the same document and lenders review both.

Every revenue assumption must be justified. "We will achieve 500 customers in month six" requires an explanation: what is the conversion rate from enquiries, what is the cost per acquired customer, and what marketing spend generates those enquiries? Work backwards from the revenue figure to the underlying assumptions, not forwards from a desired outcome.

Show three scenarios: base case, pessimistic (50% of base case revenue), and optimistic (130% of base). Lenders expect a pessimistic scenario and will create one mentally if you do not include it — the difference is that yours will have your assumptions and theirs will have theirs. The pessimistic scenario should show the business surviving, even if it shows losses and the need to draw on reserves.

Government grants and Innovate UK funding have specific requirements not shared by bank lending. Most require: evidence of match funding (you typically fund 30–50% of the project cost), a detailed project plan with milestones and deliverables, a named project lead with relevant credentials, and a statement of how the project creates additionality (what would not happen without the grant).

The additionality argument is where most grant applications fail. "We will use the grant to buy equipment" is not additionality. "The grant enables us to develop a production prototype 18 months earlier than our current cash flow allows, creating 3 FTE roles by year two and demonstrating proof-of-concept for a £2M Series A round" is additionality.

Growth Hubs (England) offer free grant-writing support from business advisors who know local funding streams. The British Business Bank maintains a central database of available finance. For grants specifically, the gov.uk Business Finance Support Finder is the most comprehensive starting point and is updated regularly.