A business plan, regardless of whether it is based on the conventional business plan or the Business Model Canvas (BMC), is necessary both for starting a business and for the strategic and operational planning of existing companies. Furthermore, a business plan is drawn up as part of a company takeover or succession and generally for raising capital.
Create a business plan: marketing plan, financial plan and other sub-plans
The starting point is usually a marketing plan. This is supplemented by further partial plans; these include the procurement plan, production plan, workforce plan, research plan, and sales plan. In addition, there is the financial plan, which contains an estimate of the necessary financial and human resources (costs) and the expected revenues, so that the economics of the capital expenditure can be assessed. A business plan is the basis for internal target agreements and at the same time a means of communication to convince private or state investors such as banks, risk capitalists (venture capitalists), business angels, cooperation partners (in the case of mergers) or internal company committees that decide on the release of funds.
Furthermore, a business plan is also required for any application for subsidies, subsidies and subsidy programs. If you are facing difficulty in understanding the different business plans you can always take help from a business financial advisory.
A business plan is required whenever a business idea is to be concretely implemented as a start-up project. It doesn’t matter how extensive the start-up project is. When someone starts a flower shop, the person needs a business plan just as much as when a new innovative production process has been developed. The questions are the same. Only the scope of the plan will differ. However, contrary to widespread opinion, start-ups and business start-ups are no longer the only area of application for business plans. Especially in large corporations, it is now common to work with the business plan tool for product launches, expansions or company acquisitions and to have a professional business plan drawn up for many different purposes.
Business plans are used on the following occasions:
- business growth
- succession plan
- Company sale or takeover
- Structural change and reorientation
- product launch
- Expansion into other markets
- capital increase
- raising capital
- Application for public funding
- Obtaining extension credits from the bank
- investment decisions
- Strategic planning and plan update in the operative business
A business plan has the following advantages:
- The business plan helps to convince others of the planned project: An idea or project only comes to life when a business plan is drawn up. This clearly shows that you have worked intensively on the idea. Furthermore, the creation of a well-structured business plan is a sign that you definitely want to put the project described in the business plan into practice.
- The business plan is an essential prerequisite for raising capital: without showing the economic viability of the concept, you will not attract financiers.
- The business plan provides the opportunity to monitor success: the plan is the starting point for all controlling. Every step can be traced. Any deviation requires an evaluation and a possible adjustment of the plan. In the event of imbalances, appropriate measures can be initiated at an early stage.
- The business plan forces a systematic approach: When creating a business plan, the author is forced to think everything through logically and systematically. Gaps in knowledge become visible. problems become apparent. Decisions have to be made. Alternatives have to be considered.
- The business plan gives an overall view: the finished business plan brings everything together into a whole. All parts must fit. The dimension of the planned project becomes visible.
- The business plan increases the chances of success: Nobody would start building a house without a blueprint. This means that a business plan that has been worked out in advance makes the implementation of a business idea much easier. Practice has meanwhile confirmed that the prospects of success increase when a business plan is drawn up. Because a faulty plan, serious deviations from the plan or a non-existent plan are the most common reasons for the failure of a start-up in Germany.
- The business plan helps to assess risks better: The implementation of a business idea is always associated with risks. Risks can arise within the company itself or from the market. Risks cannot be ruled out. But precise planning and the awareness that there is a risk in one case or another significantly mitigate the negative consequences. Identified risks can, e.g. B. by financial reserves, mitigated or excluded.
- The business plan helps to show dependencies: Even if a business plan is broken down into individual building blocks, it is still important that all chapters fit together in terms of content and that the project itself is coherent. Statements about the target group have an impact on the marketing plan. The communication planning must be reflected in the corresponding figures in the financial plan. Planned revenues influence the capital requirement. When the business plan is complete, it shows whether all the chapters of a business plan fit together in the end.
- In accordance with this development, a company handbook for subsequent entrepreneurial action is often drawn up from the business plan.