Create a business plan: 7 steps to a business plan

 

What is a business plan?

The term business plan is not clearly defined, although everyone can agree that it is crucial. The business plan, also known as the business plan, serves as a central part of starting a business and usually includes a summary, an introduction, the business model, a market analysis, a financial plan, an action plan, and a description of the organizational structure.

We will explain the individual components in more detail in the following sections. Then, you can use this as a business plan template to create your own.

Why should founders write a business plan?

The business plan is a document that summarizes how a business will be realized and how it intends to make a profit. A business plan is essential as a document for internal control and a communication tool for potential investors.

All entrepreneurs planning a serious venture will benefit from creating a business plan. The plan puts your business idea down on paper, and your thoughts are checked for strengths and weaknesses by clearly formulating them. In this way, you can take a closer look at the idea and, if necessary, further optimize it or make necessary changes in advance. Once you've created your business plan, you can decide if it's worth continuing to invest more time and money.

If you are still looking for a business partner for your idea, the business plan could be an effective means to an end and convince potential partners of your vision.

However, a business plan is essential for financing your business idea. It doesn't matter whether you are looking for investors or want to take out a loan - a well-founded business plan is your ticket to convincing financiers of your business idea. That is why the financial plan and the capital requirement plan are often seen as the most essential part of the business plan.

Although there is no officially prescribed layout or table of contents for a business plan, you can use our following points as a guide or sample business plan to create your project.

What belongs in a business plan?

1. Summary

You will probably write the first part of your business plan last. It is best to start your business plan with a short 1-2 page summary containing the elements listed below. You can expect the reader to devote less time to your business plan than you would like, so keep it short and to the point. Mention the most important unique selling points of your business idea. Don't forget to mention the most important figures from the financial plan. You want to arouse interest here and demonstrate directly that you not only have a great idea but that and how it can also bring profit.

2 Introduction

As the name suggests, this section introduces your concept to you and why the idea should be implemented. The background and goal of the company should also be mentioned here, where you can formulate and explain your vision. Above all, think about what your company offers your target group and what problem you solve for the customer. This is precisely what makes your company unique and distinguishes you from competitors.

A common mistake here is using adjectives like "the best" – this describes a relatively inexperienced entrepreneur since the offer is too broadly defined. Unfortunately, this also includes a too broadly defined target group, e.g., B. "women" or "consumers." The more specific the target group, the more you can demonstrate that you have thought clearly about your customers.

You can also brag about personal successes here. Do you already have experience in the industry, have you successfully launched or managed companies, or are you just the right person for your business idea as a career changer? In the introduction, you should also show who you are and what makes you unique!

1. Business Model

In this part, you describe the elements of your business model and thus provide an overview of your offer. Keep the following points in mind:

• What kind of products or services do you offer?
• Who is the customer, and what is their budget?
• Who are your competitors, and what are their prices?
• How do you market your products or your services?
• How much is your product or service priced?
• How do you deliver your products or your services?

You can show how your company creates value for the market by answering these questions. In short: why does the world need your product or service?

1. Market Analysis

A market analysis aims to determine the extent to which a market is profitable and to identify possible opportunities and risks. This will allow you to identify the strengths and weaknesses of the proposed enterprise. A PESTEL analysis is a commonly used method to represent the external environment at a macro level. The result can, in turn, be used to identify specific vulnerabilities and potential threats as part of a SWOT analysis.

PESTEL is an abbreviation for:

P: political

E: economic

S: sociocultural

T: technological

E: ecological-geographical (environmental)

L: legal

The elements of this analysis are also often described as "drivers-of-change" – the points can be seen as indicators of organizational change.

A SWOT analysis describes the strengths and weaknesses of a company and the opportunities and threats. Present this analysis in your business plan to clarify that you have thought carefully about your market.

SWOT is an acronym for:

S: Strengths

W: Weaknesses

O: Opportunities

T: Threats

A detailed target group and competition analysis is always part of market analysis. It pays to be honest here because the business plan is not only used to ensure financing for a business idea but also to put the idea through its paces in advance. Therefore, you shouldn't close your eyes when looking at the target group and the competition. Especially with the target group, it is essential to check exactly who you need to address and whether your ideal target group is large enough and has enough budget and interest in your product to make the business idea profitable.

It is worth looking at direct and indirect competitors when it comes to competition. You should not only look at the strengths and weaknesses of the product but of the company itself. In this way, you may find valuable weaknesses that you can use to the advantage of your own business by making it better.

1. Financial Plan

The most important part of the business plan content is the financial plan, especially when getting funding for your business idea. The presentation of the economic situation is an indicator for potential investors that you know what you are doing. It's also a good idea for you to be aware of your financial situation and define it clearly - so you know exactly where you stand.

The business plan should include the following points:

• The expenses at the beginning: investments and start-up costs
• Capital requirements for starting a business
• Financing of capital requirements
• Payments after founding: running costs

In principle, you show in the financial plan how much money you are planning for the foundation, what this amount will be invested in, how profits are to be made, and how you will deal with any liquidity bottlenecks.

You may also be able to create a budget for your expenses to be sure you can make ends meet without jeopardizing the business. But, again, a tax advisor can be beneficial, especially in the planning phase of the finances.