This chapter describes the purposes of business planning, general business planning concepts and guidelines, and the format of a comprehensive business plan.

Business planning

Business plans are developed for both internal and external purposes. Internally, entrepreneurs develop business plans to get a share of their business. The most common external purpose of a business plan is to raise capital.

Internal purposes

  • A business plan is a roadmap for business development because it
    defines the company’s vision
    determines the company’s strategy
    describes how the strategy is implemented
    provides a framework for analyzing important issues
    a plan for the development of the company
    is a measuring and control tool
    helps the entrepreneur to be realistic and test theories
    External purposes

A business plan is often the most important way to describe a company to external target groups, such as B. Potential sources of funding and recruitment of key personnel. It should help third parties understand the current state of the company, its capabilities and the need for resources such as capital and human resources. It also provides the most comprehensive source of information for business evaluation.

Principles of business planning

As Hindle and Mainprize (2006) say, business plan writers should seek to express their expectations of the uncertain nature of the future. However, news obligations make it difficult for new companies (even more than existing ones) to communicate the expected future. You present five communication principles:

  • expectations
    Translate your view of the company and how it fits into a format that meets readers ’expectations
    Tell me about it
    You have identified and understood the key success factors and risks
    the expected market is large and you expect good market share
    You have a strategy for commercialization, profitability, and dominance
    You can build and protect your owned and competitive position
  • Milestones
    Anchor key events in the plan with specific economic and quantitative values
    Tell me about it
    Your main goals are in the form of financial goals
    You have twice as much design requirements and flexibility
    They understand the dangers of ignoring the connections between certain events
    You understand the importance of quantitative values ​​(and not just chronological data)
  • potential
    Nothing lasts forever – things can change to affect opportunities: taste, preferences, technological innovation, competitiveness
    Tell us about these four perspectives to differentiate between a business concept, different competencies, and sustainable benefits:
    the new combination on which the company is built
    Opportunity size or market size
    Market growth trends
    Market value of the company (as a percentage of the proposed market share or Dessamsine in dollars)
    Four important aspects that describe the operating environment of the new company (internal and external environment)
    how the context helps or prevents the proposal
    how the context can change and affect the firm and the extent of the firm’s built-in flexibility or response
    what management can or will do if the context proves unfavorable
    what management can do to positively influence the context
    Business model
    A brief and clear description of how the idea really becomes a value-creating company

Who pays how much and how often?

The activity that a company must perform to produce, deliver to its customers and products
And be able to defend claims that a company is attractive, sustainable and has a competitive advantage

Credibility principles in the business plan

The authors of a business plan should strive for the credibility of the project (Hindle & Mainprize, 2006), so the needs of the entrepreneurial group (resource seekers) and the expectations of the investors (resource providers) should be in line with their criteria. The “take it or leave it” principle (i.e. financial forecasts made by an entrepreneurial team) has a good chance that resources will not be available. Hindle and Mainprize (2006) present five principles that help entrepreneurs reflect their credibility: