A business plan is a document that entrepreneurs create before starting a business. It serves to clarify the entrepreneur's long-term plans, to reveal risks, to obtain a bank loan or to approach investors and business partners. It includes, for example, the business idea, customer and market analysis or the financial costs of starting a business. For tips on developing such a plan, see the article.
Business plan vs. strategy & process
A business plan (or business plan) is often confused with a business strategy or business process. However, there are differences between the two.
A business strategy, as opposed to a plan, is used by existing companies that want to improve their business processes and better meet their objectives. Strategies may already be outlined in a business plan, but as the business continues to grow, the strategy is updated and adjusted.
A business process is an outline of specific tasks and activities that lead to profit - it usually serves as a guide for the sales department on how to acquire leads, put together proposals, or how to behave in sales meetings. The process is repeatable, flexible, structured and measurable. To learn how to set up a sales process, read the SalesDriver chapter.
Why you should create a business plan
The business plan has several purposes:
- Clarify your long-term business plan and set goals, including how to achieve them,
- identify potential risks and understand how to avoid them,
- approach investors or banks for credit,
- business partners and employees clearly understand from the business plan where you are collectively heading.
What does a business plan contain and what form does it take
There is no specific template for a business plan. It's up to you which form suits you best. However, if you are also creating a business plan for a bank or investor (here it is officially called a business plan), find out from them what form they require the document to take and what all needs to be in it.
In general, every business plan should include:
- an introduction describing your business idea,
- a profile of the entrepreneur and a description of their experience,
- a detailed description of the product and service, including an explanation of why it will be of interest,
- a description of the customer (ideally with personas),
- market and competitor research,
- risk analysis,
- financial and marketing plan,
- the human resources required, including the organisational structure,
- a rough timetable (planning the next steps before and after the establishment of the company).
Make sure your business plan is clear and well-structured. Everyone who reads it will appreciate it, including you.
Although a business plan contains a lot of information, it is always in a concise form. The maximum length of a business plan is 20 pages. Each additional page requires more energy to read and is more likely to discourage your peers and potential investors.
The most important part of the business plan is the data
The most common flaws for which business plans fail are empty claims and lack of data. Many entrepreneurs get excited about their idea without having the data to confirm that their plan will work.
When creating a business plan, back up every claim with research, studies or statistics. Feel free to include them in the document in the form of charts and links so you can easily refer back to them whenever you need to.
What to look out for when creating a business plan
Don't be overly optimistic - Don't automatically assume the most optimistic possibilities in a timeline or profit estimate. Be realistic, keep your head down and allow for worse case scenarios.
There is no one-size-fits-all business plan - Just as every entrepreneur is different, every business plan is different. So don't try to find a one-size-fits-all solution that you can copy, but tailor the business plan to your idea and product. Only if you're applying for a loan at a bank, make sure it doesn't have a prescribed form. In this case, first create a business plan for your purposes and then a variant for the bank.
Don't let the business plan lie fallow - Don't let the business plan become another document that ends up in a drawer. Familiarize all co-workers with it and refer back to it regularly to make sure you are executing the plan. Update the business plan as well, if necessary. You can conveniently track the implementation of the plan in your CRM system, where you have all leads, clients, orders, and business results in one place.
