Every founder should take care of his or her business plan at the beginning of the business start-up. Quite a few start-ups have to bury the dream of their own company in the start-up phase. Not infrequently due to a widespread – albeit easily avoidable – mistake: You made mistakes when creating a business plan or did not prepare it professionally.
What is a business plan?
A business plan is generally understood to be a roadmap for setting up a business. The founder or entrepreneur structures the basic business idea and shows a detailed overview of the intended company structure. With the business plan, you check your business idea for feasibility and economic potential.
You can also determine the financial requirements, and it serves as the basis for assessments regarding the chances of success, for example, through a lending bank or other investors. Therefore, the business plan is an information document for potential donors and is an important orientation aid for the start-up himself.
When should you create a business plan?
There are several scenarios that require you to draw up a business plan. Most of the time you will need it when applying for funding or loans. Here are the business plan occasions:
- Business start-up or start-up
- Establishing a secondary business
- Company takeover
- Company expansion
The content required in the business plan differs depending on the occasion. In the following article, we will focus on creating business plans for setting up a business.
Why do you need to create a business plan?
When starting a business, you have to ask yourself the existential question right from the start: What do we have to do to make the company worthwhile? The entrepreneur describes how his idea should work and which target group he is targeting with his idea.
Create a business plan – 10 advantages
If you’re planning on just chasing a business idea, this is not a very good idea. Implementing such an idea in a successful business concept is a complex undertaking that must be very well prepared. Companies that have a business plan fail much less often in the start-up phase. In addition, there are other good reasons why experts advise founders to draw up a business plan.
- The business plan reduces the risk.
- It gives your business idea a structure.
- It is the continuation of your idea.
- The business plan shows you the relevant market and target group.
- With it, an analysis of your competitors and competitors is possible.
- You have an overview of the capital requirements.
- A business plan is a document that you can use as evidence.
- The business plan you have created remains an important component of your company after it is founded.
- It enables you to have ongoing control and success analysis.
- With him, you have the basis for your business success.
How long does it take to create a business plan?
Would you like to create a business plan, and are you wondering how long it could take? There is no general answer to this. What is important here is the preparatory work, the collection of relevant information, and your business plan concept. The preliminary work should include a detailed examination of all important aspects and contents of the business plan. So take enough time for this; this is the only way to convince the addressees of your business plan! Depending on how intensively you have done the preparatory work and drawn up a rough concept, a time window of 1 – 3 months can be planned for creating your business plan.
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What does a business plan look like?
A business plan can be viewed as a kind of multi-page plain paper for the company to be founded. Because a business plan represents the future company to stakeholders and banks, perfect execution is a matter of course in the presentation. Correct spelling and grammar, a clear structure, and legibility are essential.
Create a business plan – step by step instructions
It is not the finished work that determines the value of the business plan. Rather, it is the structured considerations behind it. With detailed preparatory work, you can convince the potential financiers and make your company fit yourself for acting on the market.
Executive Summary
The executive summary is a summary of the content of the business plan. It is intended to provide business prospects, stakeholders, investors, and financiers with quick and meaningful information. The executive summary is usually one to two A4 pages long. The executive summary design determines whether the addressees of the business plan will deal with the following statements in more detail. Even though the executive summary is at the beginning of the business plan, it is only drawn up at the end.
Founder Profile
In the founder profile, you introduce yourself and, if necessary, your co-founders. People interested in the future company want to know who they are dealing with. They need to find out whether you have the necessary knowledge and experience to lead the company successfully in the long term. Therefore, the following information should be included in the founder profile:
- School education and professional education
- Strengths and weaknesses
- Industry knowledge
- Expertise
- commercial knowledge
- other qualifications
Deficits should not be concealed either; However, to make the business idea credible, it is important to show how you as a start-up want to compensate for these deficits.
Business Idea
Your business idea must then be examined to see whether it will be successful in the long term under the given circumstances. The product or service must be described. The following points are important for this:
- Purpose of the project
- Special features of the business idea
- Short and long term corporate goals
- A precise description of the product or service
- Start of production or service
State of development of the product or service - Requirements that still have to be met to start production
- Time from which the product or service can be marketed
- Legal formalities that need to be completed.
Various products or services can be particularly development-intensive. Often they cannot be marketed immediately after setting up a business. These products or services must be specially presented in the business plan. The business plan should cover the following points:
- Necessary development steps for the product
- Point in time from which a pilot series can be issued
- Information about the person or company responsible for the testing process
- Point in time at which any patenting procedure will be completed
- Required technical approvals
- Existing or applied for patent or utility model rights
- Ideally, development of technological possibilities.
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Target Audience
Your future target group represents those customers who are expected to generate sales. This can be both private individuals (B2C) and companies (B2B). From the value created by the business idea, certain customer groups are derived interested in the product or service offered. A meaningful market analysis is only possible based on the identified customer group. You can only make statements about sales expectations accordingly.
Market & Competition
After the customer segment has been identified, you can start analyzing the market. Here you put together all the data and information that describes the market for the planned product or the desired business model. This is how you can identify opportunities and risks. This chapter includes the following analyzes:
- Market analysis
- Competitive analysis
- Location analysis
Market analysis
Above all, the market forecast is an important piece of information in the business plan that summarizes how sustainable your business model is. Analyzing what customers value about the individual competitors also provides valuable pointers for developing your strategy. The following questions must be answered in the market analysis:
- Who are the customers?
- Where are the customers?
- Composition of customer segments by age, gender, occupation, income, shopping behavior, and by private or business customers
- Indication of existing reference customers
- Possible dependence on a few major customers
- Customer needs and problems.
Competitive analysis
Not to be forgotten is the competition, so a point in the business plan should be dedicated to it. The competition analysis must include:
- What other developments in the direction of the start-up exist
- Who the competitors are
- Prices of competitors’ products and services
- Competitor strengths and weaknesses
- Weaknesses of your own company compared to important competitors.
- The unique selling point of your own product/service compared to the competition (USP).
Location analysis
The choice of location is important and should be explained in the business plan. The following must be taken into account in the location analysis:
- Where the products or services are offered
- Why the entrepreneur decided on this location
- Disadvantages of the location
- Compensate for these disadvantages.
Marketing & Sales
You will only be successful if the product can not only be created but also sold. The sales and marketing concept includes at least statements about:
- The planned product respectively
- The product range or the intended service
- Price calculation and discount design
- Contractual Conditions
- Distribution channels
- Field service control
- Public relation
- Correct advertising
- Sales promotions
- Logistics
It makes sense to add a statement about market segmentation and market entry strategy to these subject areas.
Also Read: Baby Steps And Visions For A Thriving Business
Organization and People
The organization must be described in the business plan, the entrepreneur must indicate whether he wants to work alone, whether he wants to hire employees when the company is founded or whether he plans to hire employees at a later point in time. To represent the organization, the entrepreneur should consider the following:
- Presentation of the company with founding date, shareholders, managing directors, employees, headquarters, business purpose and strategic alliances. Patents , licenses, rights, and contracts should be indicated if they exist.
- Indication of the phase in which the company is, for example development, establishment, market launch or growth
- Organizational chart of the company as an attachment with information on the individual managers. The managers should be presented with age, company affiliation, education and qualifications.
If a start-up wants to hire employees, he must indicate when and in what periods he wants to hire them. He must provide information about the required qualifications of the employees and the planned training measures for the employees.
Chapter 8: Legal Form
The legal form of your company is particularly interesting for investors, as they are also interested in liability in case of doubt. If they want to get their money back and start a limited liability company, you look less attractive than if you are liable for your business and private assets. The banks and business partners then have a better chance of getting their money back from you. You have to explain in the business plan
- For which legal form you have chosen as entrepreneurs
- Why you choose this legal form
- Information about the planned business structure
- Distribution of business shares
If you also work with business partners, you must state whether you are taking into account the interests of your business partners with the chosen legal form.
10 tips for creating your business plan
So that you can create an effective business plan, it is advisable to consider expert tips. Her tips will help you think of everything and separate important facts from unimportant information when creating. Here are a few good tips for creating your business plan:
- Impress with facts in the introduction
- Convince with numbers
- Address possible points of criticism yourself
- Present existing skills
- Get help from experts to create it
- Use understandable language
- Create financial plans for different scenarios
- Go offensive to the “worst-case” scenario for
- Use a business plan template
- Show yourself as a founder with heart and soul
