As a founder, why do I need a business plan?

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The business plan is presented in start-up guides as an indispensable tool for professional start-ups. The followers refer primarily to the great importance of the business plan for raising capital.

But here, we discussed ten other important reasons for a business plan. Also, you’ll learn why you must get a business plan consultant to do the writing for you.

Notable reasons why you need a business plan

Reduced risk of project failure

More than half of all start-ups fail within the first five years. A business plan can protect entrepreneurs from making crucial mistakes in their independence. When developing it, founders recognize the insufficient market potential and the lack of profitability of their business idea as soon as they deal with feasibility, target group, and market potential. 

The simplified presentation of the start-up project in a business plan writing improves the chances of success in the implementation phase.

The compulsion to transparent and structured procedure

The business plan ensures a structured approach and, through the step-by-step presentation, offers the founder himself and any third parties the necessary orientation. A business plan system prevents knowledge gaps, hurdles, or other problems from going unnoticed and standing in the way of a successful start-up.

Development of competitive advantage and added value

The founder has to get to the heart of his business idea in two to three sentences. This includes specifying the competitive advantages of your future company and the added value of your offer. For financiers, a comprehensive customer benefit and an innovative offer with a clear, unique selling point are the strongest reasons for financing a project.

Detailed analysis of the intended target market

A detailed market analysis is an indispensable part of every business plan. The underlying market research forces the founder to contact the potential target group early and check the need for the envisaged products or services. In this way, misjudgments of the target market and costly market tests are avoided.

Analysis of the competition and own positioning

Positioning one’s offer requires an in-depth analysis of the competition. To do this, the founder must deal with the particular strengths & weaknesses as well as opportunities & risks of the competing offers and compare them with their offer plans. 

If the new offer stands out positively from the competition from the point of view of the target group, it can be assumed that there is a fundamental interest in the market. It remains to be clarified to what extent there is an increased willingness to pay for the recognized added value.

Financial plan for the well-founded determination of capital requirements

Inadequate funding is responsible for many entrepreneurial failures. The financial plan is a core element of every business plan and guides the founder – not least through sales and cost planning – to determine his capital requirements. The founder can approach reality with well-founded assumptions even if the financial plan is always based on hypotheses. It is particularly important to plan for sufficient capital for any delays.

Usability for different areas of application

Although credit institutes and investors are often initially content with a summary of the most important information and key figures in the form of an “executive summary” or a “pitch deck,” if there is interest, a detailed business plan is required. Other areas of application for a business plan are a start-up and business plan competitions, where start-ups can gain attention, input, and prizes.

Tracking of milestones in future day-to-day business

The business plan defines the milestones of future business development, not least for marketing and customer acquisition. They contain qualitative and quantitative goals that are to be achieved step-by-step through concrete measures. The assumption that such a valuable document would disappear in some drawer after the financing contradicts the circumstances in the start-up scene described by consultants.

Controlling through regular target/actual comparisons

The business plan represents the starting point for efficient control. The actual figures should be compared with the target figures from the business plan at regular intervals. In this way, it is possible to track down undesirable developments and other plan deviations. Last but not least, controlling enables entrepreneurs to take countermeasures at an early stage if there are signs of liquidity bottlenecks.

Personal framework for entrepreneurial success

Due to the systematic thinking and documentation required during the creation, the business plan represents a personal framework for founders. They can hold on to it permanently on the way to entrepreneurial success. Ongoing updating is an important success factor for operational development. The business plan protects some entrepreneurs from serious wrong decisions and possible failure for decades.

Conclusion

Suppose you need a consultancy for a business plan writing service. In that case, we recommend you use the services of the most reputable business plan consultant. You’ll also get us as the number one pitch deck consultant services on the internet.

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