Definition

A business plan is a formal document that sets out a firm's objectives, the strategies it will use to achieve them, the resources required, the financial projections, and the risks and mitigations. The UK Government's guidance on writing a business plan identifies the executive summary, market analysis, operational plan, and financial plan as the core sections. For a RICS-regulated firm, the plan also needs to address regulatory compliance and the maintenance of chartered status.

Why this matters for Business Planning

  • Level 1 knowledge: you must be able to describe the key sections of a business plan and explain the purpose of each.
  • The business plan is the primary document through which partners, lenders, and investors assess the viability and direction of a practice.
  • Assessors often ask candidates to describe their firm's business plan; candidates who cannot answer demonstrate a worrying lack of commercial engagement.
  • A well-structured business plan draws on the analytical skills covered in this competency: SWOT, PESTLE, SMART objectives, forecasting, and KPI selection.

Key principles

Executive summary

The executive summary is written last but placed first. It provides a concise overview of the practice: what it does, who it serves, its principal objectives for the planning period, and its financial targets. For a RICS firm it should note the practice's regulatory status and any significant changes planned. A well-written executive summary should be comprehensible to a non-specialist reader in under two pages.

Market and competitive analysis

This section sets out the market the practice operates in, drawing on SWOT and PESTLE analysis. It identifies target client segments, the geographic footprint, and the competitive landscape — using, for example, Porter's Five Forces framework (Michael Porter, Harvard Business School, 1979). For a surveying firm, this section might analyse planning application trends, transaction volumes, and competitive intensity across service lines.

Operational and resource plan

The operational plan describes how the firm will deliver its services: staffing levels and structure, technology, quality management processes, and office locations. The resource plan translates this into inputs — how many surveyors are needed, at what grade, and at what cost — and should also address CPD commitments and succession planning.

Financial plan and risk register

The financial section includes a projected income statement, a cash flow forecast, and a balance sheet projection. Key assumptions should be stated explicitly so readers can test the projections. The plan should also include a risk register in which each risk is rated by likelihood and impact, with a clear mitigation — for example, the loss of a key client or a market downturn reducing instruction volumes.

Relevant RICS guidance and legislation

  • RICS Rules of Conduct (effective 2 February 2022) — the firm obligations require regulated businesses to be financially viable; a sound business plan is a key management tool for demonstrating and maintaining viability.
  • Companies Act 2006 — directors of incorporated RICS practices have legal duties in relation to financial planning, including acting in the interests of the company and avoiding insolvent trading.
  • UK Government guidance on writing a business plan (available at gov.uk) — a useful free reference covering the core sections and common pitfalls.
  • Insolvency Act 1986 — relevant to the risk management section; directors must understand the triggers for wrongful or fraudulent trading.

Ethics and Rules of Conduct angle

Business plans shared externally must be accurate and not misleading. Presenting inflated financial projections or understating known risks would breach Rule 1 of the RICS Rules of Conduct (honesty and integrity) and could constitute fraudulent misrepresentation under the Misrepresentation Act 1967. Internally, plans should be challenged rigorously: a culture in which optimistic plans pass unchallenged is a governance failure.

APC-style Q&As

Q (Level 1)What are the four main sections of a business plan?

Executive summary, market and competitive analysis, operational and resource plan, and financial plan. Most plans also include a risk register and, for RICS firms, a section on regulatory compliance and professional indemnity insurance capacity.

Q (Level 1)What is the purpose of the executive summary in a business plan?

The executive summary provides a concise overview of the business, its objectives, its market position, and its key financial targets. It is written last, placed first, and designed to be understood by a non-specialist reader in a short time. For a RICS firm it should also note the practice's regulatory status and any major changes planned.

Q (Level 2)How does Porter's Five Forces framework contribute to the market analysis section of a business plan?

Porter's Five Forces (Michael Porter, Harvard Business School, 1979) analyses competitive intensity by examining the threat of new entrants, the bargaining power of buyers and suppliers, the threat of substitute services, and rivalry among existing competitors. For a surveying practice, it reveals whether the market is attractive or challenging, and informs strategic choices about where to compete and how to differentiate.

Q (Level 2)What financial statements would you expect to find in the financial plan section of a business plan?

A projected income statement showing revenue, costs, and forecast profit; a cash flow forecast identifying when cash will enter and leave the business; and a balance sheet projection showing the expected financial position at the end of the planning period. The plan should also state key assumptions so that readers can assess their reasonableness.

Q (Level 3)Your firm's partners have asked you to contribute to the risk register. One partner believes a key-person dependency — 40 per cent of fee income generated by one senior partner approaching retirement — should be downplayed to avoid alarming junior staff. How would you respond?

I would explain, respectfully but clearly, that understating a material risk is both an ethical breach and a practical mistake. Rule 1 of the RICS Rules of Conduct requires honest disclosure, particularly in a document that may be seen by lenders, insurers, or prospective partners. Practically, failing to acknowledge the risk means the firm will not put in place the succession planning and financial reserves needed to manage it. I would recommend the risk be accurately stated alongside a mitigation plan — a structured client introduction programme over the next two to three years and a recruitment plan for a replacement. The document can frame it as a managed risk, but it cannot omit it.