Market research and framing the business idea
6. Creating a business plan
Creating a business plan is the first big hurdle for many prospective founders. However, it is often the prerequisite - for example, it must be presented to the bank for a loan. State subsidies are also linked to a convincing business plan. This makes it all the more important that the business plan has matured in terms of content.
The business plan follows a relatively fixed structure. When you start your business, the first thing you should do is write a business plan. You can work out and improve this plan later with consultants. Try to take advantage of free - if necessary also chargeable - advisory services on the subject of business start-ups in your region. Such a thing gives it nearly everywhere. Nevertheless you should formulate the basis already once. This will also help you to become aware of your idea. Many of the elements you have learned in this course, as you will soon see, also flow into the business plan. We have therefore made a mini business plan the final task for this course.
In principle, the structure of a business plan looks like this:
Summary
The founder(s) in profile
The business idea/project
Market environment and competition
Marketing and sales strategy
Organization, employees, network
Legal form
Risks and opportunities
Financial plan
Appendix
1. Summary
It is best to start your business plan with a short summary, from which the reader already knows who you are, what you want and where you see the decisive advantage of your business idea. This summary must be short and concise. It is the first impression the reader has of your business idea! And as the saying goes: There is no second first impression. Therefore this summary should be written at the end - with a lot of care.
2. The founder(s) in profile
In this section you introduce yourself (or if you start with several, of course also your partners). It is about how your previous activities, experiences and competences fit to your business idea.
Here you should describe how far you already have experience with the topic that forms the basis of your business idea in the area of cultural heritage. Would you like to pick up the local basket weaving tradition and sell locally woven baskets at Amazon or Etsy? Then you should mention here, for example, if you have previously worked for a company that sells gift baskets - perhaps because you know that the quality of the basket is also important to the customers and that this is often not good enough. Anything that you can mention that qualifies you for your new self-employment should be listed here. The same applies to your partners. If you have a clear specialization, you can also name it here and carry it out under point 6.
In addition, all formal qualifications also belong here, e.g. special licences, driving licences, etc., especially if they are relevant in this context. Anyway, a complete curriculum vitae should be included in the appendix.
It is also not wrong to name soft skills that are important for self-employment.
It is also good if you already point out possible deficits here - and what you are doing to make up for them (e.g. attending further training courses).
3. The business idea/product
This is the time to present your business idea, the product or the service you want to offer in detail: What is this product/service?
This includes the question of why you are offering this product/service at all: What is the Marketpull? For which problem is it a solution?
Above all, present the USPs in detail here.
In addition, you should name the short, medium and long-term goals of your company and explain why you are setting these milestones.
When would you like to start? Why do you choose your time horizon - what has to happen before?
When can the product be marketed? Are there any other approvals that need to be obtained in advance, or approvals that need to be obtained?
4. Market environment and competition
Here you should start by describing your target group exactly. Who is your product for? What distinguishes your customers (age, income, education, characteristics)? Here it helps to work with personas. Personas are imagined customers who ideally embody your customer(s) and their needs.
Then, of course, you have to deal with your competitors. What does the competition already do, what is still missing and how do you set yourself apart from them? Who are your most important competitors? Is there something where your competitors have an advantage over you? Then also describe here how you intend to deal with it.
Of course, the location is also an important topic here if you want to set up a stationary company. What are its advantages and disadvantages? How can any disadvantages be compensated?
5. Marketing and sales strategy
Here you describe again exactly the USPs of your product, and say, in how far it differs from the competition. Here you describe the marketing mix you developed for your product as a strategy (see above the "4 Ps").
6. Organization, employees, network
Here you show how your company is organized - when it is founded, who appears in which function, etc. Of course, this will be shorter if you found your own company. But even then you should describe whether you plan to hire employees, if so, when and with what qualifications and for what purpose.
You can also describe your network here, your connections with the local community. You will learn more about this in our module 4.
7. Legal form
This point is actually self-explanatory: Here you briefly describe which legal form you have opted for and why. If there are several shareholders, you also have to deal with the structure and why the shares are distributed as you plan.
8. Risks and opportunities
Here you present the biggest chances and the biggest problems of your project. Stay objective, analytical and concise. Describe how you will strategically deal with the problems and risks. You can very well use a SWOT analysis here.
9. Financial plan
Needless to say: Every business plan includes a financial plan. In it you have to explain how much money is needed to start and how high the liquidity reserve has to be (usually for 6 months). This is the capital requirement plan.
Then comes the financing plan. It shows where the money should come from. So you show how much money you have (equity ratio) and how much you need (borrowed capital requirement).
You should also show that you have looked for funding programmes and mention which ones are suitable for you. Maybe you can also involve investors?
If you need money (which is usually the case), you should show what collateral you can offer (collateral overview).
A liquidity plan consists of an estimate of monthly deposits, monthly costs, investment costs and monthly debt service.
The profit and profitability preview shows you what turnover, costs and profit you expect in the next three years.
10. Appendix
Here you attach your curriculum vitae, in tabular form, as well as
all possible expert opinions, patents, draft contracts etc., which
document the status of your preliminary work for the foundation of
the company.