Before founding, there is a business plan. This valuable document will help you plan and organize your project. You will also need it to present your concept to banks, authorities, or investors. An accurately drawn-up business plan presents your project in detail and can convince the respective decision-makers of the chances of success of your idea.
You should invest both all your skills and your glowing passion for the start-up project in the creation of the business plan. There are free patterns and templates available online that you can use to create the document yourself. Or you decide on a fee-based provider who is at your side.
A business plan is something like a start-up roadmap that gives you an overview and brings your business idea closer to the reader. Here you can find out what to consider when creating it and how to make your business plan perfect.
Is a business plan necessary?
In principle, of course, you can also find a company without a business plan. But good planning is half the battle. And badly planned, unfortunately, half lost again. Studies show that over 80 percent of startups in Germany fail within three years. According to expert estimates, only one in ten start-ups achieve real success.
These numbers are good arguments for creating a business plan. Because if you include as many imponderables as possible in your planning beforehand, you can best prevent failure. And has the best chance of success.
A business plan ensures that the idea can be implemented
Unfortunately, a good idea is no guarantee of success. It must also be able to be implemented in a realistic manner. The business plan is an instrument that puts this undertaking on a solid footing. After creating the business plan, the founder can be sure that his idea can be realized and financed. Risks and opportunities were weighed against each other and the idea became a well-founded concept.
The basic building blocks of a business plan consist of two elements
1. The business idea: To be able to convince banks, authorities, and potential investors of your idea, it must be presented in a comprehensible manner. In addition to the basic idea, this also includes the measures with which it is to be implemented.
In the business plan, the offer must first be explained. It should be clear to whom you want to address it and how interested parties and customers are to be won over. A comparative analysis of the opportunities and risks of founding a company also belongs in the business plan.
2. The finances: A carefully worked out financial plan shows the solidity of a start-up idea. This not only includes a detailed list of the financing but also a profitability forecast. The business plan can only be convincing if both points are calculated in a well-founded manner.
Why should you create a business plan?
A business plan is always required when it comes to financial support for the start-up. The plan serves to convince the respective financier of the prospects of success of the business idea.
A business plan is mandatory if
- the founder wants to apply for support from the Employment Agency,
- Investors should put money into a business idea,
- the bank should approve a business loan
or when it realizes a new project.
But the business plan also has many advantages for the founder himself. Because when you create it, you have to think very carefully about your planned project. So a business plan can be a valuable tool that shows you certain aspects that you had not considered before.
The creator can use the plan as a guide and signpost that will accompany him through the entire start-up phase. This provides him with a strategy paper that always provides an overview of the founding process. During the start-up process, it can prove valuable at various points to have a business plan in hand. For example, you can present this at any time to potential partners whom you would like to win over for cooperation.
How do I create a business plan?
A business plan includes certain basic elements that give the outline a clear structure. If you create your business plan yourself, then this outline is your first task. After you’ve listed each item, you’ll know what information you need to gather to complete the plan.
The most important points of a business plan
Executive Summary
As a summary, the executive summary forms the start of the business plan. The reader gets to know the idea and gets a first impression of the founder. Many financiers, who often have to read a business plan, use the executive summary as the first basis for decision-making. If this is important, the first chapter of the plan is not correct, do not read any further.
This makes the importance of the executive summary clear. You should only write them at the very end when the business plan is otherwise complete. Then it will be easier for you to create a short and concise summary of your project. It may be worth taking the executive summary to some experts who are not related to your startup. The neutral opinion of a competent non-participant can be very helpful for optimization.
At best, the executive summary serves to arouse the reader’s interest. The first impression can sometimes be the most important; use the introduction to put your business idea in the best possible light.
Founder profile and company
The point here is that you leave a trusting impression as a person. A financier must trust you that you can successfully implement your business idea, through competence and your personality. The founder profile goes beyond a mere curriculum vitae. Don’t hide your light under a bushel, but don’t overdo it either. Qualifications that you still lack to implement your idea should not go unmentioned. Describe how you intend to obtain it.
The founder profile includes information about the entire team. If a company already exists, this must also be described in detail. In addition to the legal form, this also includes the structures, the organization, and the distribution of tasks. At this point, it should also be clear how much staff will be needed to implement the business idea. You can also go into workflows and supply chains here.
Business idea
The business idea is the core of the business plan, that’s what it’s all about. Potential financiers want to know exactly what is involved. But they are usually also interested in the story behind it. The story of how an idea came about can say a lot about its value and also about the founder. When presenting the business idea, it must also become clear what is special about it, who it is aimed at, and what benefit it could bring to the customer.
When describing your business idea, you can prove your competence. This shows if you know what you’re talking about. When you present your idea and the business model based on it, your enthusiasm for the cause should also be clear. You have the chance to infect the reader with your enthusiasm. Share your visions with the contact persons and present your goals for the next few years.
At the end of the presentation, the offer should be plausible and the unique selling point of your project should be clear. And the prospects of the business idea should be clear to the reader.
Industry analysis and target market definition
What opportunities does the founding idea have on the market, and how should the company position itself in the industry? What is your target market like? What are the current developments? What initial difficulties do you anticipate, and what hurdles are typical for the industry? How do you want to take these hurdles? How is the industry positioned in your area and how does your company fit into this market cosmos?
These questions should be answered by the end of the chapter. Here, too, you have the chance to prove your competence. The description of the market shows how well you know your industry.
Contest
The market and your industry are of course also determined by your competitors. The better you know them, the better you can compete with them. It is important to present the competitive situation with well-founded data and to describe the relevant players in the market. This information also plays a crucial role in your financial planning, so it will be given appropriate attention by potential financiers. The more detailed you describe the market situation, the more competent the impression you leave on the reader. Only if you know your marketplace well can you survive the competition.
Target group
A market analysis is worth nothing if you have not studied your target group in detail. The more precisely you can describe your target audience to the reader, the more believable you will become. Only if you know who you are dealing with can you figure out how best to address these people. This is also part of your competence as a founder. This is not only about who your target group is, but above all how you identified them.
The reader should get to know your potential customers in detail. He wants to know about their needs and how you can meet them with your business idea. And how you want to make that clear to your target group.
Marketing
A product or service is only ever as good as the marketing that it brings to the man or woman. So if a financier has approved of your business idea, they now want to know how you intend to market it. Your competence must therefore go beyond your offer, your industry, your knowledge of the market, and your target group. How do you bring your business idea to the customer? That is the question of all questions.
This chapter includes a well-developed marketing strategy including a budget. To showcase your marketing, you can use Jerome McCarthy’s 4 Ps:
- Product (product policy): Is there a sufficiently large group of buyers for your product?
- Price (pricing policy): Do your prices cover the costs and are still attractive for the target group?
- Promotion (marketing): Do you want to position yourself more broadly or focus on the target group with your communication?
- Place (distribution): Through which sales channels should the product reach the customer?
Timetable
A detailed timeline is required here, which documents the planned market entry of your business idea step by step. Important milestones and fixed deadlines are the core points of this agenda.
Financing
Now for the specific numbers. The previous points of the business plan are now broken down into euros. How much money is planned for what and why? Forecasts, income statements, and a balance sheet should be presented here in a plausible and comprehensible manner.
Banks, authorities, and investors from whom you expect monetary support will draw their conclusions about the feasibility of your project from this chapter. The success of your business plan depends on the correctness of this calculation.
If you are not sure about such calculations yourself, you should consult a tax advisor or another specialist. This is where precision matters, you should not allow yourself any mistakes or carelessness here. The approval of subsidies or loans depends on this.
SWOT-Analysis
Finally, the reader is given a glimpse into the future. Here you show that your idea is sustainable in the long term. First and foremost, of course, it is about the chances of your project, but the risks should also be discussed. This allows you to show foresight and show how you will counteract these risks.
Where can I get help?
A lot can depend on a business plan. The start-up project stands and falls with the approval or rejection of a loan or funding. Investors may also need to be brought on board. Anyone who has never created a business plan should therefore seek help so that the result is as perfect as possible.
There are different possibilities for this:
| Template | A business plan template is not necessarily applicable to your project, but it will help you with structure, outline, and essential content. |
| A template gives the business plan structure. You can enter the respective content in the existing structure. A business plan for applying for funds from the employment agency must have a specific form, with an appropriate template you will receive the right form for your purpose. | |
| Software | There is a variety of software that can help you create a business plan. The help corresponds to the sample or template. You have to enter your content yourself. However, there are precise instructions for this in the software. |
| Tool | One tool offers the most support when creating a business plan on your own. When it comes to money from the employment office, there is additional information here, for example, on the requirements for the application. At the end of the process, you will receive a ten-page document. |
| Seminar/Workshop | There are numerous offers for start-ups. The chambers of commerce, for example, organize seminars and workshops that help with the creation of a business plan. |
| Start-up advice | Paid offers from specialized companies are available. But the Employment Agency and the IHKs also offer start-up advice, as do some tax consultants. |
The Unternehmerwelt platform provides all the help you need to create a business plan yourself free of charge. There is a sample, template, tool, and information on how to create a business plan.
Tips and tricks for a successful business plan
- Simple and understandable formulations
- Not too long or convoluted sentences
- No technical terms that not every layperson understands
- avoid repetitions
- Make realistic statements, both in terms of time and money
- Do not present plans as absolute, include imponderables
- Pay attention to logic, discrepancies confuse the reader
- Have someone proofread
- Run spell check
- recalculate calculations
- A second person sees more than the writer and can uncover the implausible
- The test reader can be a friend but should have a certain level of competence
Conclusion
The importance of a good business plan cannot be overstated. A lot depends on the diligence in the preparation. A foundation can even fail because of this. But even if the business plan is not necessary for applying for funds or attracting investors, it brings many benefits to the founder. This allows you to bring structure to your start-up process and use it as a roadmap. With the creation, you are forced to reconsider all aspects of your project. Factors may come to light that you hadn’t considered before. The meticulous preparation of a financial plan can also only bring benefits to your project. You may discover one or the other set screw for savings or plug a financial hole,
Business plans drawn up for authorities, banks, or investors must be perfect. Anyone who is not firm in the matter should therefore get help so that the foundation cannot fail at this point. Unfortunately, studies show that too many founders fail. A meticulously prepared business plan can help to prevent this.