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How to develop a great business plan

Business plans are often associated with start-up companies which need money from a bank and therefore have to present a comprehensive concept. A business plan describes the strategy with which an entrepreneur or intrapreneur demonstrates how he wants to develop his business and reach ambitious growth goals.

Business plans can be developed for a whole company, for strategic business units, for product lines, individual products or specific projects.

The ultimate objective of a business plan is to present a growth story to internal or external decisions makers in order to obtain the resources to make it happen.

To determine what makes an excellent business plan, it is useful to put oneself in the situation of the decision maker: He can only spend each Euro once and will therefore carefully consider whom he will give his money. To him, the key criteria are the risk involved, the interest rate that can be achieved and the point of time at which his money, including interest, will be paid back.

To meet these 3 criteria, the business planner should provide reliable facts and figures and present them in a convincing and consistent way. Excellent business plans are ´robust´ - they include a comprehensive analysis and demonstrate sound strategic conclusions.

Here are the 9 key elements of an excellent business plan:

1. Audience Orientation
   Put yourself in the position of your audience - the decision maker. How does he think? Is he a technician or figure-driven? Does he have prior knowledge about the topic or is it new to him? How can you present your information in the most effective way to meet his needs?
2. Background and Objectives
   Explain why you have written the business plan (e.g. to launch a new product) and what your target is (to obtain the go-ahead from the decision-maker as well as the financial resources required to implement your plan.)
3. Analysis
   Excellent business plans are characterized by a comprehensive analysis of the relevant external environment and of the company itself. This includes an…
   - Analysis of the macro environment: Political, economic, social and technological influences on the business.
   - Analysis of the micro environment: Market, customers, competition.
   - Analysis of the company´s internal situation.
4. Scenarios
   As the above analysis is static, it should be complemented by a dynamic scenario analysis. This anticipates various future developments, their probability of occurrence and their possible impact on the business.
5. Objectives
   Having analyzed the situation and developed various scenarios, you can define your objectives. In most cases, these involve financial targets like turnover, contribution margin, EBIT, Return on Investment, etc. Objectives should be ambitious: If your target market grows by 8% annually, then your growth objective should, e.g., be 10%.
   What special value do you offer which enables you to grow more strongly than the market and to actually reach your target?
6. Strategy
   Your strategy to reach the goals should answer the following 3 questions:
   - What: Which products/services do you offer? What is special about them? What is your USP (Unique Selling Proposition)?
   - Who: Who is your target group?
   - How: What is your business model? Do you sell via internet or do you have a direct sales force? Do you sell your offering or rent it? Do you have a strategic alliance with partners? Do you license? Which processes and structures are required to execute your strategy?
7. Implementation
   Here you define which activities should be completed by when, who is responsible and which budgets are required.
8. Results
   Show the expected financial outcome for the next 3 – 5 years in a profit and loss statement. Carry out a sensitivity analysis in which you simulate different prices, quantities and costs and show the resulting profit scenarios.
9. Risk Management
   Categorize the risks your venture involves based on their severity and probability of occurrence. Then propose measures to manage these risks.

Conclusion:
If you take these 9 elements into consideration when developing a business plan, you will be in an excellent position to obtain the resources you require and you will be successful as an entrepreneur or intrapreneur.

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