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10 Essential Content of a Business Plan

The business plan

What is a business plan? How do I write a business plan? Where can I find suitable business plan templates? Please read our article

What is business Plan?

A business or business plan provides a clear and generally understandable start-up with all its opportunities and risks. It describes the business idea, analyzes the existing market, plans the implementation process, estimates the capital requirements, and predicts the expected profits.

A business concept is usually drawn up both for the presentation and presentation of the entrepreneur, as well as for applying for a loan or for the application for funding, some of the start- up grant.

Is the business plan a necessary evil or is it the basis for business success? What must be included in such a concept at all?

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The plan is necessary in the vast majority of cases: in the case of financing requirements, the house bank wants to see the business plan, the finance office asks for a new start-up mostly afterward and who applies for a start-up grant from the employment agency must present it anyway.

It also makes sense: it helps to manage your own business in a structured and thought-out way.

In most cases, however, a detailed business plan is not necessary for the strict sense, a simpler business concept is completely sufficient. The difference is mainly in the detailed business depth such as sales forecast, profitability forecast, and capital requirements analysis. You can find out which approach is the right one for you.

I will explain the Content of a Business Plan later,  I have to explain important thing first;

The ready-made forms, which can be downloaded everywhere, can be a help – they do not release the young entrepreneur from the duty to think about the most important points:

 Business Plan and its Elements

  1. What is actually the business idea – can I give it back briefly and concisely?
  2. Am I suitable for this idea at all and why?
  3. What do I offer to whom? Products, services, and target groups
  4. What sets me apart from the competition?
  5. What similar models already exist, which are successful and why?
  6. Are my marketing concept and I have a promising market entry strategy?
  7. What capital requirements do I have? How do I bridge the startup phase?
  8. Do I need leverage and if so, do I already know where I can get it as cheap as possible?
  9. If I have a material or use of goods, how is it calculated, what are the purchasing conditions, how is my gross profit calculated? Minimum turnover, operating costs and so on.
  10. Do I want to employ employees? From when? How do I find my future colleagues?
  11. What opportunities/risks and future perspectives must or can I expect in my industry? What imponderables do I have to plan and what does my strategy look like?
  12. What insurance do I need?

What is the purpose of a business plan?

Before you create a business plan, you must be aware of the purpose of your business plan. Consider which target group your business plan should address and which functions your business plan should fulfill. 

The target group of your business plan

  • Investors and banks
  • Suppliers
  • landlord
  • Financial institutions and public authorities
  • Intern
  • clients
  • business plan betting

The functions of your business plan:

In a business start-up, a business plan fulfills the following functions:

  • Financing/procurement of capital
  • Analysis of a business idea
  • Planning: personnel planning, investment planning, marketing planning, realization schedule with milestones, development plan,
  • Control: cost, liquidity, time
  • Company succession
  • Investment decisions

Content of a Business Plan

1.    Executive Summary

Summary of business plan

  1. Business idea/product and service
  • Presentation of your business idea
    • Product manufacturing: Special features for the production of your product (e.g sources of supply, production sources)
    • Manufacturing costs / cost structure: Display your purchase costs / production costs.
    • Price and margins: presentation of prices and margins
  • Customer service

3.    Market and competition analysis

Description of the market environment with the following subchapters:

Define your target market as short as possible.

  • Market size: Describe the size of your target market based on the number of customers, the number of pieces sold or the turnover. Particularly in growth markets is also the description of the market growth, i. The projected gains, and the market potential, i.e. The theoretically maximum possible sales, interesting.
  • Competition Analysis: Analyze the strengths and weaknesses of your competition.
  • Market positioning: Describe how you place your company on your target market in comparison to your competitors. If you are experiencing difficulties, consider how you differ from the competition: 1) Customer use (location, product, service) 2) Price
  • Optional: Explain your sales/sales plan: If you demonstrate why your preview is realistic / not unrealistic, you will greatly increase the persuasiveness of your business plan.
  1. Marketing and sales
  • Distribution / location
  • Describe in this chapter how to sell your product to your customers. When you open a store, you describe the advantages of your location instead of a sales strategy.
  • Marketing measures/advertising specify how you advertise your product and indicate your marketing budget.
  • Market entry strategy Describe how you can win your first customers and establish your business.
    1. Founding team and staff
  • Founding team and key staff Relevant experience, qualifications, CV
  • Personnel planning Representation of permanent and freelance employees
    1. Organization and legal form
  • Legal form
  • Describe the legal form and shareholders
  • optional branches, the organization of the company
    1. Implementation plan / implementation plan

An implementation timetable presents the essential work packages and milestones for implementing your business idea.

Tip: Set only the essential points, e.g. Reconstruction, business opening, expansion and pay attention to clarity.

  1. Opportunities and risks

Identify the opportunities (e.g., product and business expansion) and risks (e.g., unsafe market development, high fixed cost, product development risk)

  1. Financial plan
  • Liquidity plan / Capital requirements make your payments against your payments to determine your capital requirements / financial requirements. Since liquidity is particularly important in the start-up phase, you should plan monthly or quarterly in this phase.
  • Tip: Make a list of your private capital requirements. You will consider this as a salary in your personal expenses or as an entrepreneur’s wage over the private withdrawals.

Tip: In liquidity planning, pay attention to the payment flows, ie the inflows and outflows in your account. Particularly in the case of investments, the payment flow (the payment of the invoice) must be distinguished from the costs (depreciation) taken into account in the income statement.

  1. Investment Plan

Show how you can finance the above capital requirements. Through equity or leverage such as bank credit, microcredit or other loans.

  • Profitability forecast: show the profitability of your business for the next few years.
  • Investment plan: Identify your investments to calculate depreciation. Also, consider the initial investments to start the business.
  • Statement of revenue or profit or loss

Here, you set the sales against the costs and preview the expected profits in the future periods.

Tip: Also consider start-up costs such as fees for lawyer, notary and a possible admission/license.

This is all about the business plan and its Content, if you want to learn more about Content of Business Plan I will recommend you to Visit.

About the author

Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.

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