How to Write a Successful Business Plan: Our Guide for Founders

Most people who start a business want to start selling the product or providing the service as quickly as possible. Writing a business plan is certainly not one of the tasks you look forward to the most. In this article we show why a business plan is still important, how it is created and what it should contain.

What is a business plan anyway?

A business plan is a detailed document that describes all the important aspects of the future company, in particular:

- the project itself

- the project team

- the market situation, the target group and their needs

- the corporate goals and the planned overall strategy

- financing plans

- a detailed financial forecast, typically for a period of three years

Creating a business plan takes some effort, but it is very important. A good and accurate business plan helps with two things in particular:

1. Convince potential business partners or investors of the company and show that this is not just a quick idea.

2. Writing down your own ideas, defining and structuring goals and maintaining an overview.

Since the business plan is not a mandatory document, there are no formal requirements as to what it should look like. However, it should not be longer than 30 pages and should get to the heart of the matter.

In general, a business plan consists of the following six parts:

First part: The executive summary

The Executive Summary is a summary of the project. This part is a maximum of one to two pages long and contains:

- The business idea

- The target group and the target market

- Vision, mission and values

- the short and medium-term growth targets

The readers should be able to grasp the most important aspects of the business project immediately. The remainder of the document then serves to explain these points one by one.

Incidentally, the executive summary is the last thing to be written after the business plan has already been drawn up – so no important aspect is forgotten.

Second part: the presentation of the product or service

In the second part of the business plan, it is time to present in detail the products or services that the company offers. In other words: what is to be sold?

The description of the product or service should:

- describe the benefit,

- identify the needs that will be met and the problems that will be solved,

- emphasize the advantages over competing products,

- name the positioning and the price.

When presenting products and services, it is advisable not to use too many technical terms (especially with technical products), since not everyone who gets their hands on the business plan is necessarily from the same industry. Investors from other fields should also be able to understand the content.

Third part: the team

Without people there is no company and for this reason the presentation of the team involved in this project should not be neglected. Investors often decide for or against a project based on the people behind the idea. Therefore, all participants should be presented in detail.

The following points can be described:

- the professional background

- special abilities

- the motivation to start the company

- the role and contribution to the project

Even as a sole proprietorship, this section should not be skipped. Hey, after all that was your own idea, wasn't it?

Fourth part: the business model

The business model shows how the company should generate profits. It answers the fundamental question: How should the service or product be sold?

Therefore, these questions are answered in this section:

- What's for sale?

- To which target group?

- How is it sold?

- How expensive is it and what is the profit margin?

In order to be able to answer these questions, some research is required.

Market Research

Market research is usually carried out before the business plan is drawn up. In this way, target customers and their needs can be determined, competitors and potential risks and opportunities of the industry identified. The results of this research can then flow into the business plan in the form of concrete figures.

In this phase of the business plan, it can make sense to address possible limitations of the project. So on all factors that could slow down or complicate the operation of the company (e.g. seasonal fluctuations or the weather). In this way, the readers can be shown that everything has been thought of and that negative scenarios have also been taken into account.

Marketing Strategy

Unfortunately, a great product and a convincing service alone are not enough to sell them successfully. This is where a good marketing strategy comes into play. So this is the part of the business plan where all the tools to be used are listed. This includes, for example, advertising, posters, content marketing, social media, sponsoring, trade fairs, content marketing or influencer marketing.

Fifth part: the financial plan

The business plan usually contains a financial plan for the next three years. This means that the running costs, the income and the profits have to be estimated fairly accurately in advance.

In addition, this part of the business plan also includes information on how the company is to be financed in the first place. Are there already investors? Has a loan been taken out and what is the equity?

It is best to split the financial plan into these four parts:

- A preliminary profit and loss account. This contains the income and expenditure for the next three financial years.

- An estimated balance sheet. It provides information about the financial position of the company at the end of a specific financial year.

- A financial plan. This can be used to determine whether the necessary financial resources are available to start the company.

- A cash flow plan. It contains an estimate of the development of finances over a shorter period, usually 12 months.

Readers of the business plan must be able to use the financial plan to assess how profitable and stable the company is.

Sixth part: the legal aspects

In the sixth and last part of the business plan, all legal aspects of the company are presented, in particular:

- the legal form and the reasons for this choice

- the amount of the company's share capital, with a breakdown of the shares held by each shareholder

- How the company's profits are taxed

Four tips for a convincing business plan

- The business plan should be easy to read: A clear presentation, tables and easy-to-understand language make it easier for readers to understand the business plan.

- The business plan should be adapted to the target group: not all investors have the same focus. Some focus more on ensuring that a company is sustainable, others invest in particularly innovative ideas and still others care most about the founders behind the company. Therefore, the business plan should highlight and emphasize exactly what the reader wants to see.

- Update the business plan regularly: A business plan is not set in stone. The market is constantly changing and we collect new insights. The business plan should also be adapted to these – on an ongoing basis.

- Look for support: Anyone who has never written a business plan will find it difficult to think of everything. And that's not bad at all. Because that's exactly what experts are there to help you create a strong and solid business plan.

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