The decision in favor of self-employment is a big step for start-ups in many ways associated with certain financial risks. However, the prospect of realizing oneself freely weighs more heavily as the central driving force. But before supposedly good business ideas are put into practice, start-ups should do their ‘homework’ thoroughly. And they do that with a business plan ixxn a suitable formal framework.
All main contents and functions of a business plan are to be examined in a practice-oriented manner. With this in mind, possible aids and sources of information should also be presented in compact form. Finally, budding entrepreneurs will find some practical tips to develop an effective business plan.
What is a business plan? A definitional approximation including entrepreneurial importance
A business plan is a well-structured summary of the entire business project. The business idea is presented in all its essentials. In addition to opportunities and risks in the market, the product is highlighted in particular. In addition to corporate goals that are specific to be pursued, financing plays a key role: What costs can be expected?
How should the company be financed? What sales/profits are targeted for the first few years? A business plan is thus a strategic roadmap that reflects the direction of the business, with business and financial aspects in the foreground. A business plan consultant gives you the strategies for the business plan to grow your business. It is essential for such a corporate concept that it is well structured and coherent. After all, it should also serve as a business card to get banks or other financiers on board.
Components and effects of a business plan
The two main components of a business plan are the detailed examination of the business idea and meticulous financial planning, in which nothing should be calculated nicely if possible. In addition to financial security and economic feasibility, and appealing profitability forecast should be included. For the founders themselves, the business plan has an essential function because it ‘forces them to deal with all of the crucial strategic decisions.
And externally, it has a critical function to convincingly ‘sell’ your business idea. In this respect, the essential task of creating a business plan, which no founder can avoid, is worthwhile. However, due to the all too human operational blindness, it is strongly recommended that outsiders with a certain amount of experience look at the business plan.
Content and strategic aspects: What is a business plan for?
As far as the described external function as a ‘business card’ is concerned, a business plan is explicitly required from authorities, banks, guarantors, or other financiers to understand the business idea and profitability. Therefore, a business plan with a clear structure should follow and quickly make all central aspects recognizable.
An executive summary, usually placed in front of the business plan, is used for this. Even if the business plan has to contain certain elements, it is not entirely rigid. This gives founders the space to present the unique features of their business idea. As already mentioned above, the plan serves as a guide for founders, specifying the goals to be achieved and the tasks to be performed. In this sense, it is an essential roadmap for the first two years after starting a business. As a pure business plan, it must be meaningful and convincing if external investors are won. This is necessary in most cases, depending on the capital requirement and available equity.
The outline/structure of a business plan in a compact overview
The following topics have become established in the order presented. In general, all explanations should be short and precise. This also applies to necessary calculations, which should be based on realistic scenarios (or market data). Furthermore, everything must meet the criterion of relevance and thus be of great importance for assessing the opportunities of the business model.
1. Executive summary: convincing summary of the perspectives and opportunities, ideally the uniqueness (USP – unique selling proposition) becomes clear
2. Profile of the founder: concise brief introduction in the sense of a resume for a founding team of all persons. Above all, experience and relevant qualifications are important
3. Business idea: what is the essence about? What are the goals? What is unique about the product/service (added value from the customer’s point of view)
4. Target group: Who should be reached? (Keywords purchasing power and sales potential)
5. Market and competition analysis: Analysis of the environment, the market, and the competition (keyword SWOT analysis)
6. Sales and Marketing: Which sales channels should be used? How should customers be made aware or won over?
7. Company organization: choice of legal form, clarification of powers, the efficiency of company structures and processes
8. Corporate finance (assessment of profitability and financial sustainability): What is the capital requirement and when? How should it be covered? Which profits/sales can be forecast?