Unternehmenswerk explains: What is a business plan?
Business plans help you to identify your goals and stay on track, but what exactly is a business plan? In short, it forms the basis of your company foundation and serves as a guide for your future strategy. It also helps you to obtain funding or financing.
What is a business plan?
A business plan (also known as 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 these goals. It is both a business concept and a guideline and sets out marketing, financial and business management aspects. The business plan is an important document for founders, used to attract investment before a company has established a proven track record. In addition, it provides strategies to keep the company on track in the long term.
What benefits does the business plan have for your company?
Although it is particularly popular with young entrepreneurs, every business should have a business plan. Ideally, this should be reviewed and updated at regular intervals to see whether the desired goals have been achieved, changed and/or developed further. Sometimes established companies want to take a new direction – a comprehensive description of the new business model in the form of a business plan is then also required.
The most important aspects of the business plan at a glance
A business plan is a written document that describes the main business activities of a company, its objectives and the way in which it intends to achieve its goals.
Young entrepreneurs use business plans to successfully launch their business and generate funding from external investors. Companies can either use a classic, detailed business plan or a simplified, so-called lean start-up business plan. Good business plans include a market analysis, marketing strategies, a financing plan and a summary of the planned strategic and operational processes as well as the company’s competences and growth potential.
How long does a business plan have to be?
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, e.g. patent applications, these should be referenced in the main plan and included as appendices.
What must be included in the business plan?
As mentioned above, no two business plans are the same; however, they all have the same elements. If you want to write your own business plan, we have explained some of the common and most important parts of a traditional business plan here.
Do you need help writing it or would you like to have your business plan created? Get in touch with us using our contact form and we will call you back within 24 hours.
Business plan for bank, funding and investors
A business plan is an important document that every newly founded company and all self-employed persons should have before starting business activities. In fact, a viable business plan is often required by banks, institutions and other lenders before they will consider providing capital to new businesses.
A good business plan should outline projected costs as well as potential pitfalls and difficulties of any business decisions. Business plans among competitors in the same industry are therefore rarely identical. However, they usually have the same basic elements, which include a detailed description of the company, its services and/or products as well as a summary of the operational structures. The business plan also defines how the company intends to achieve its goals.
No business plan, (usually) no financing
That’s the rough rule of thumb. Working without a business plan is very risky and (usually) not a good idea. In fact, very few companies are able to survive for long without a solid financing and action plan. A professional business plan can save a company high losses in the long term at low cost and without much effort on its part. It therefore 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.
Classic or lean startup: Which business plan is the best?
Although there are no right or wrong business plans, they can fall into two different categories: Traditional or Lean Start-Up. In our experience, traditional business plans are often the ones that work better with lenders. They are standardised and provide comprehensive details of a company’s many areas of activity. However, due to their comprehensiveness, they also require more work.
1. Company description
The company description provides detailed information about your company. In this section, go into detail about the problems your company solves, for example by describing what gap your service fills or what need your product fulfils. Also explain the competitive advantages that make your company successful.
2. Market environment - an analysis of the market and the competition
You need a good understanding of your industry and your target market. A competitive analysis will show you what other companies are doing and where their strengths lie. Look for trends and topics in your market research.
3. Corporate structure and management
Tell your readers how your company will be structured and who will manage it. Describe the legal structure of your company.
Also, show how the unique expertise of your employees will drive your business forward. Consider including CVs of key members of your team.
4. Service and/or products
Describe exactly what you sell or what service you provide. Explain how potential customers will benefit and how the product life cycle works. Explain how you handle intellectual property or personal data and address topics such as copyright or patent applications.
5. Marketing and sales concept
Your aim in this section is to describe how to win and retain customers. It also explains step by step how a sale actually takes place.
6. Planning and liquidity calculation
Indicate whether you require debt or equity capital, the conditions under which you wish to apply and how long your application should be valid. Describe in detail how you intend 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 sales increase.
Unternehmens-Werk helps you to create a professional business plan
For a precise analysis and the creation of a professional business plan, a discussion with an experienced business consultant can be helpful. We also have 6 professional tips for creating a professional business plan in our exclusive article.