Lack of planning after the initial phase is the main reason for businesses failing within the first 3 years. A business plan can help here.
What?
It summarizes the business concept, contains vital information on the business such as target group or its opportunities and risks and can be used to gain an overview of its critical areas at a glance. It also contains a financial plan.
Why?
Business plans are useful to keep track of long-term goals of a company in its early days and can be also used to check the idea’s viability, financial sustainability and financial benefit.
Often times, investors, banks, creditors but also long-term business partners like suppliers, contractors or simply a co-founder will ask for a business plan to get an overview of your business and evaluate your idea and its (planned) implementation.
Specifically in Germany in the case of unemployment the German Federal Department of Employment “Arbeitsamt” will grant subsidies for unemployed entrepreneurs planning to start a business. One of the requirements here is a business plan. For more information on this topic, see Further reading.
How?
Before starting, you should have your product idea completely finished. Most startups only make a business plan once it’s needed.
Note that making a full business plan is a tremendous amount of work, but it will pay off and can be prefaced with smaller drafts to aid the process.
Personally, I like using business model canvases to draft a business plan before creating the real deal. A business canvas looks like this:
Note: I’ve included this template as a PDF below.
Start by filling out the gaps. Make it precise, but keep it concise. Do not go into depth too much. For making a full business plan, see the checklist and template below.
To sum up, a business plan is a concise document containing vital information on the business concepts and related data such as the target group and a financial plan. It aids in long-term planning after the business’ initial phase and is often required by other parties.
Templates
Further reading
- The US’ Small Business Administration’s guide to writing a business plan
- How to Create a Business Plan in Germany (source for all the templates)
- Applying for subsidaries (“Gründungszuschuss”) to create a business (German)
— Oskar Manhart