Everything starts with your business idea. It can literally be anything. From a small café around the corner, to an online shop for exclusive fashion. Whatever you are planning, there are a few things you need to consider. First and foremost, check if your business idea is realistic. Something that sounds good in your head, can seem utopic to others. Even though it helps to discuss your idea with family and friends, be sure to let strangers take a look. This way you get a more realistic assessment.
Your business concept has been approved as realistic and has to be transformed into a company concept. To start things off, you have to decide what your product or service is and if there are customers, who want it. Now you can check, who else is present on the market? Two things can be researched in parallel.
Number one: Who is your competition, i.e. who is satisfying the same customer needs that you want to satisfy? It is of vital important to formulate an USP (unique selling point), to differentiate yourself from the competition.
Number two: Who could be a partner in business? Business partners can have various positive effects for your business. Supporting your marketing, sales and production are only a few examples. There is a possibility that your partner has been in the business longer than you and you can benefit from his advice and experience.
Your concept is ready to go. Now you can tackle finance. Only a small percentage of startups are solely based on equity capital. Usually it is a mix of personal and foreign investment. Foreign capital can be a number of things. The classic is, of course, a bank loan. The bank invests its money with interest over a contractually set timeframe. Different kinds of foreign financing can be e.g. government support, private investors or crowdfunding. To receive these funds, you have to present your business concept to those investors. A professionally structured business plan saves time for both you and the investor, by presenting information fast and uncomplicated. This way the entrepreneur can present his business concept in an attractive manner, without skimping on the details. A good business plan should contain an executive summary, a marketing plan and a detailed financial plan. You should know all this information by heart. That will help you to be confident during negotiations.
Since you did all the planning in your business plan, the next step is execution. What kind of company you want to found should have been already stated and justified in your business plan. Now you need to get registered in the commercial register. You can start building your company at this point. Hire employees, rent office/production space and buy equipment. Once the foundation is layer you can start your business.
The business plan is an excellent tool to support the startup and to make it through financial negotiations. But one thing it isn’t: 100% correct. The business environment changes constantly and even the best business plan doesn’t survive contact with reality completely intact. It is more of a baseline that supports you to formulate plans for the short-, medium- and long-term. Entrepreneurs can always fall back on the business plan, to check how the situation has changed.
There are those who think that business plans are obsolete for modern businesses. But writing the business plan, alone gives you a feeling for your chances of success. A detailed business plan shows that you researched and planned meticulously before founding your company. Additionally, the business plan offers the possibility to look up any detail that might have escaped you.