Before we start, a quick note:
We like to keep things efficient and make every word count. So even if you already know a bit about writing a business plan, we recommend not skipping the sections. We rather recommend working through this page in the order that it’s written. You might pick up a golden nugget that you might have skipped. Of course, you’re free to skip if you only want to read about one specific topic. Still, most things in life are connected and so are all the sections in this article. All that being said, let’s cut straight to the chase with a quick overview of all the topics in this guide.
What is a business plan?
A goal without a plan is just a wish.-Antoine de Saint-Exupéry
In general, a business plan is a summary of your business setup, goals, and outlooks for the next three to five years. Either for internal uses or external presentations. It can even be both. Depending on that, it might change what a business plan looks like for you.
If your business plan is only for internal usage you could be fine with adjusting some templates. But we’ll come back to templates later. For us, internal means to present it to your co-founders, or to get a better idea on your game plan. The importance of a good internal strategic growth plan shouldn’t be overlooked!
So what about external reasons?
Why do business plans fail?
Whenever we talk about success or failure, we have to take different points of view to understand a situation in a productive way. It’s always a combination of internal beliefs and external factors. Let’s first have a look at the external factors.
1. Unique selling proposition (USP)
You should be able to propose the value of your business for others in the most simple convincing way. When it comes to the number of words, follow the old saying as much as needed, as little as possible. Make each word count, create a powerful statement.
2. Team competencies
Imagine you’re spinning a coin. For the coin to keep on spinning, it needs speed, momentum, and balance. While one side of the coin is the numbers you’re generating with your business, the other side deals with the people behind it, your team. If your team’s competencies don’t match, the coin will lose its balance, and at some point stop spinning. If they match, the coin will probably spin longer and faster. That ability is exactly what potential investors are looking for.
3. Financial projections
When we start to look at one side of the coin, we’ll have to talk about the other side as well. If everything fits, but your financial projections are simply not convincing, why would anybody want to put money in your business?
You see, it’s not simple to write a successful business plan. In fact, many business plans fail due to a lack of clear financial goals and a solid plan to achieve them. But it’s not only the plan that the people are investing in, but it’s also your business, your team, and your ambitions. Three easy to understand points, but complicated to execute. Having a clear vision, and planning and preparing for it helps a lot.
By failing to prepare, you are preparing to fail. -Benjamin Franklin
The mindset behind a successful business plan
Let’s dive deep for a second. Imagine two scenarios.
First scenario
You’re working with a client, delivering your project, and you’re barely finishing it on the deadline. In the final moment, you’re thinking to yourself “this should be good enough”. How do you feel about having the final talk with your client? Insecure? Anxious? The scary part about it is that your client can at least subconsciously feel what goes on in your mind. This can result in a feeling of dissatisfaction, instead of feeling great.
Second scenario
Same client, same day, same time. But this time you’re completely over-delivering. You managed to finish 2 days before the actual deadline. Now you have time to do more, to make efforts in the way you’re presenting the results, and maybe even add a little more service on top. How do you feel now on your final talk? Confident? Godlike? How does your client react? Astonished? Amazed? Hopefully, we all have been in this scenario.
You see, most people like to have the results from going the extra step, but don’t want to go the extra step. What does that concept have to do with creating successful business plans? Good question!
–Think about it: If you don’t believe in your idea enough to go the extra step, why should somebody else walk with you?–
Let’s take this thought even further. How much is getting 10.000 Euros of non-refundable cash worth to you? Maybe one sleepless night? If that doesn’t sound like much, how much is getting 50.000 Euros of non-repayable funds to you? Imagine all you need to do to have success is to invest the right amount of time and money. The secret lies within “the right amount”. For us, the right amount means to always give the best you can. And if you can’t give the best, give at least enough to stand out of the crowd. Easy enough?
This could mean working a few over-night shifts with your co-founders. Or hiring an expert to have no chance of failing. It’s always either about time, or money, that you need to put it. Elsewise it’s only about being lucky, but we want to make sure to succeed, and minimize the risks of failure, right?
Investing 2000 Euro for a convincing business plan to get a 50.000 Euro investment back. Sounds like a good ROI, doesn’t it?
You’re probably pretty excited now, after hearing those great numbers, right?
That’s good! Keep that excitement up, because now we are getting into the business plan itself. You might want to get a coffee and a piece of paper because this will be a lot to remember.
What does a business plan contain?
In short – a business plan mainly contains:
1. Executive summary
2. Founders
3. Information about your products and services
4. Market overview
5. Marketing plan
6. Company structure
7. Major company milestones
8. Chances and risks
9. Financial Plan
10. Appendix
How much does it cost to hire a financial plan writer?
Let’s dive deeper into the key elements. Get ready for a lot of statements and questions.
1. Executive summary
Here you will need a summary of the most important general information. This includes basic information about the company and its founders, as well as its mission statement. Names, experiences, clients, marketing strategy, growth revenue, team building, milestones, chances and risks. The key points of all the listed sections. This is probably the most important area, as it gives the first impression to the reader. And we all know the first impression either opens or closes doors.
2. Founders
What can you say about the founders? Qualifications? Licenses? Experiences? Strengths? How do you plan on balancing those?
3. Information about your products and services
What’s so special about your offer? Is it already fully developed? What do you need to get started? When can you start distributing it? What legal formalities do you have to deal with? If your new business has an intense development phase, which steps are missing for the final product? What do you need for the first series? Who tests your models? What about patenting?
4. Market research and overview
4.1 Clients – Who are your clients? Where are your clients? How would you describe customer segments (e.g. age, sex, salary, occupation, shopping behavior, b2b or b2c)? Do you have referrals yet? If so, which ones? Are you dependent on a few big clients? Which needs do your clients have? Who is your target market and how will you reach them?
4.2 Competition – Are there any other endeavors in your niche? Who is the competition? What does their product cost? Strengths and Weaknesses of your competition? How do you plan on dealing with that?
4.3 Location – Where do you offer your service or product, and why? Any disadvantages? If so, how will you cover that? How does the future of that “place” look?
Clear answers to why questions, and concrete solutions in dealing with potential risks are crucial to a successful business plan.
5. Marketing plan
What benefit does your offer have? What makes it better than your competition’s offer? Which price strategy are you focusing on and why? Which price are you desiring to sell for and why? Which sales figures are you planning on in which periods? Which areas are you targeting? Who are you partnering with for distribution? What costs will you have through distribution? What about Ads and a clever Social Media Plan? How does your business have a competitive advantage in the marketplace?
6. Company structure and milestones
Which legal form have you chosen and for what reasons? What is your business model? Which form of organization have you chosen? Who is responsible for what? How are you going to ensure careful controlling? When do you want to hire how many employees? What qualifications should your employees have? What training do you plan for your employees?
7. Chances and risks
Let’s talk about the further development of your company. What are the three biggest opportunities that could positively influence it? What are the three most important obstacles that could hinder it?
8. Financial Plan
8.1 Cost of living
What are your monthly/annual living expenses? How much financial buffer do you need to handle unforeseen events like accidents and illness? What’s your investment plan like? What capital do you need and for what purpose? This might include acquisitions and upfront costs to get your startup running on the basis of your business plan. Even a liquidity reserve to ensure salaries at least 6 months after foundation. Lastly – do you have cost estimates to back that up?
8.2 Financing Plan
How high is your equity share? What collaterals can you use? Can you lease certain objects? Which funding programs could be considered for you?
8.3 Liquidity Plan
This part deals with estimating the right numbers. How high do you estimate:
– the monthly costs
– the monthly payments from receivables
– the investment costs, distributed over the first twelve months
– the monthly capital interest (repayment and interest payment)
– the monthly liquidity reserve
8.4 Income forecast/profitability calculation
What turnover can you expect for the next three years? How high do you estimate the costs for the next three years? How much profit do you estimate for the next three years?
—– Tip —–
For estimates, use comparative figures from your industry. You can ask your chamber for that.
9. Appendix
This one is probably the easiest out of all points, as the documents are self-explanatory.
- Curriculum vitae in tabular form
- Shareholders Agreement
- Lease agreement
- Cooperation agreements
- Leasing agreement
- Market analyses
- Key industry figures
- Expert opinions
- Property rights
3 points to really make sure your business plan succeeds
What a long list, right?
To make it easier for you, here’s what you should exactly focus on to really make sure that you’re successful.
First of all, no matter what you write, all the why questions have to make sense. Not only for you but even more for others.
It’s tough to look at your own business objectively enough. Our advice – Get an expert to give you feedback. You need somebody with experience to read through your business ideas from an outstanding first impression point of view.
Secondly, take the chances and risks part seriously. And don’t hide any important information here, rather give it. Showing that you can even deal with big weaknesses, is a huge plus for your business plan.
Thirdly, be prepared for anything. Especially for questions around your team, product, and service. What makes you and your offer stand out? Remember, by failing to prepare, you are preparing to fail. No need to fail here, right?
What about templates?
Good question! It’s a common thing to just download or buy a template, fill it out, and “be done with it quick”. But imagine you’re an investing company, getting thousands of requests daily, and 800 of them clearly use a template. Out of those 800, at least one third uses the top 5 free business plan templates. So by choosing the same free top template, you are competing against over 300 companies and making a low-value impression right away. Do you want that?
What about design?
We highly believe in making everything needed to have a higher chance of success. And design plays a huge role in it. Most templates, especially free ones, are so full of so-said amazing graphics, that they distract from the content. They distract from the message that your investor should perceive. Remember, we are still in a sales-like situation. You are in control of how your client should perceive you. So why make it confusing with having too many extras?
Our #1 tip when it comes to design that sells
So when it comes to writing a business plan that succeeds, the design must be appealing. But appealing to whom? It’s not you or your partners that need to like the design. It’s the person, company, or institution you’re writing the business plan for.
Think about it. Who are you going to pitch your business plan to? A conservative traditional bank? Use a simple and classic, non-distracting design. A modern social media-loving investor? Be precise, but free to play a bit around with colors and appealing modern graphics.
How to ensure your business plan is a success
Facts are tough to work through, and we tried our best to make this article as helpful and as easy to read as possible. If you made it this far, you are probably more than ready to get your business plan done.
By this point, you know what kind of questions you need to deal with. You don’t need to go to consultations right away. Save yourself some cash, and answer those truthfully and in the best way possible on your own. Check with your co-founders. And then you can go to a consultation to help you out.
We have dealt with thousands of business plans by now, and we hope that this guide gave you all you need to know about writing a business plan that succeeds. If you want to minimize the risk of failure and make a convincing impression don’t hesitate to contact us for help.
