Business plans help companies identify their goals and stay on track. They form the basis of a business startup, can drive growth, and serve as a guide for management. They also convince people or banks to work with you and/or invest in your business.
A business plan is a detailed guide to the operational development of the business. It describes in detail how a company – usually a start-up – defines its goals and what steps it must take to achieve them. It is both a business concept and a guideline and defines marketing, financial and business management aspects. The business plan is an important document for founders, used to attract investment before a company has built a proven track record. Additionally, it provides strategies to keep the company on track for the long term.
Although it is especially sought after by young entrepreneurs, every business should have a business plan. Ideally, this is reviewed and updated at regular intervals to see whether the desired goals have been achieved, changed and/or developed further. Sometimes it happens that established companies want to take a new path – a comprehensive description of the renewed business model is then needed for this as well.
A business plan is a written document that describes a company’s main business activities, its goals, and how it will achieve its objectives.
Young entrepreneurs use business plans to successfully get their business off the ground and generate funding from outside investors
Companies can use either a longer business plan or a shorter lean startup business plan
Good business plans include a market analysis, marketing strategies, a financing plan, and a summary of a company’s planned strategic and operational operations, competencies, and growth potential (see below)-.
A business plan is an important document that every start-up business and all self-employed individuals should have as a mandatory requirement before commencing operations. In fact, a viable business plan is often required by banks, institutions and other funders before they will consider providing capital to new businesses.
A good business plan should show anticipated costs as well as potential pitfalls and difficulties of all business decisions. Business plans among competitors in the same industry are therefore rarely identical. However, they usually have the same basic elements, which include both a detailed description of the company, its services and/or products, and a summary of the operating structures. In addition, the business plan defines how the company intends to achieve its goals.
That is the rough rule of thumb. Operating without a business plan is very risky and (usually) not a good idea. In fact, very few businesses are able to last long without a solid financing and action plan. Cost-effectively and without much effort on your part, a professional business plan can save a company from heavy losses in the long run. Thus, it definitely has more advantages than disadvantages. In its shortest form, the plan should contain at least an overview of the industry in which the company will operate and describe how it intends to differentiate itself from its potential competitors.
The length of a business plan varies from company to company. All information should fit into a 25- to 30-page document. If there are important elements of the business plan that take up a lot of space – such as patent applications – they should be referenced in the main plan and included as appendices.
As mentioned earlier, no two business and implementation plans are alike; however, they all have the same elements. If you want to write your own business plan, we have detailed some of the common and most important parts of a traditional business plan for you here.
Need help writing a professional business plan or want to have your business plan written by one of our expert business consultants? Contact us through our contact form and we will call you back within 24 hours.
The company description provides detailed information about your company. In this section, comprehensively address the problems your business solves, for example, by describing what gap your service fills or what need your product fulfills. Also explain the competitive advantages that will make your business successful.
You need a good understanding of your industry and target market. A competitive analysis will show you what other companies are doing and where their strengths lie. Look for trends and themes in your market research.
Tell your readers how your company will be structured and who will run it. Describe the legal structure of your company.
Also, show how the unique expertise of your employees will drive your business forward. Consider including resumes of key members of your team.
Describe exactly what you are selling or what service you are providing. Explain how potential customers will benefit and what the product life cycle is. Explain how you will handle intellectual property or personal data, addressing issues such as copyright or patent applications.
Your goal in this section is to describe how you will attract and retain customers. This also explains step by step how a sale will actually happen.
Indicate whether you need debt or equity, what terms you want to apply, and how long you want your application to last. Describe in detail how you plan to use financial resources to generate revenue. Indicate if and how much start-up capital you will need to purchase equipment or supplies, pay salaries, or cover certain bills until revenue increases.
Provide a projected financial outlook for the next five years. Include projected income statements, balance sheets, cash flow statements, and capital budgets. Think through various expected scenarios. If your business is already established, include profit and loss statements, balance sheets, and cash flow statements for the last three to five years. Should you want to summarize the steps to implement in the company itself, a checklist for creating a business plan can help.
Consulting services are in many cases subsidized by the federal government. In the case of consulting by an accredited management consultant, you will receive a subsidy for your company. Thus, in the case of professional management consulting by us, you have only a very small personal contribution.
Although there are no right or wrong business plans, they can fall into two different categories: Traditional or lean start-up.
In our experience, classic business plans are often the ones that work better with lenders. They are standardized and provide comprehensive details on a company’s numerous fields of action. However, due to their comprehensiveness, they also require more work.
For an accurate analysis and the creation of a professional business plan, a conversation with a more expert business consultant can be helpful. Also, we have 6 pro tips on how to write a professional business plan in our exclusive article.