Every starting entrepreneur who needs financing will be required to make a business plan. But if you don’t need financing, do you still have to make a business plan? And how do you make such a plan, what should it include, and why is it so important? First, we explain why a business plan is essential for you.
Should every entrepreneur make a business plan?
Absolute. At least, as an entrepreneur, you should want to make a business plan yourself. We believe that every company, with the exception of some freelancers, should have a business plan. Not only to convince financiers to provide credit but also because it forces you to set goals and to work out certain matters very concretely. It is your roadmap to success. For example, what are your sales goals for the first year? When do you break even? And what is your (total) cost?
You can write down and test all these principles in your business plan. This way, you have a solid foundation for yourself to start your own business.
For yourself
You write a business plan for yourself in the first place. It gives you, as an entrepreneur, clarity about what you want to achieve with your company so that you can make adjustments if you deviate from this course. A business plan is an ideal way to test whether you have thought of everything. For example, have you taken out the right insurance, and have agreements with suppliers been recorded? By drawing up a complete business plan, you can avoid a lot of start-up problems. Therefore, use the business plan as a handle for yourself as an entrepreneur.
…but also for financiers such as banks, investors, or crowdfunding parties
If you start a hairdressing salon, webshop, or catering business, you will have to draw up a business plan. Almost every bank, (angel) investor, or crowdfunding platform will require a business plan from you. This way, they can estimate what you are going to do and what the risk is. You often only get one chance to present your plan to these parties, so make sure that everything is correct and well-developed right away.
With a business plan, you include these parties in what exactly you want to do. Banks see hundreds of business plans every day, so make sure you stand out with your plan. In addition, pay attention to the structure of your business plan and ensure that you include all chapters so that others have all the information about your company.
What’s in a business plan?
Your business plan focuses on the problem you will solve for your target group or the need you will meet. At a hair salon, for example, you respond to the lack of accessible and high-quality hairdressers in a certain neighborhood. A webshop may focus on offering power banks on solar energy that are not sufficiently available in the market. The rest of the business plan is the further elaboration of the way in which you will solve the problem or meet a certain need.
Business plan content
A business plan always has a fixed structure and consists of three chapters: entrepreneur, enterprise, and financial plan.
ENTREPRENEUR
This chapter focuses on you as an entrepreneur. You describe why you are going into business, what your strengths and weaknesses are and how you intend to deal with this. Try to look at yourself as realistically as possible and gain insight into your strengths and weaknesses by, for example, completing an entrepreneurial test on the internet. This gives you a better picture of the added value you provide to your company by using your personal qualities.
COMPANY
This chapter is a detailed description of your company. You describe exactly what you are going to do, how you are going to do it, and who you need for this. Take the reader into the company you envision five years from now. State the steps you will take to achieve that result. Market and competition research is an integral part of your company description.
Make extensive market research.
You are undoubtedly convinced of your product. It is important to always investigate whether there is actually a need for your product. Therefore, describe trends, figures, and developments in your market and target group. But, for example, contact potential customers by taking surveys or asking for input from your personal network. Use all criticism and comments to further improve your product.
Competitive analysis: who are you competing against?
Researching your key competitors is essential to the success of your business. Describe who your competitors are and how your strengths and weaknesses compare to the competition. Use a competitive analysis for this.
FINANCIAL PLAN
Set concrete sales and profit goals and make a budget for the coming years. This way, you know exactly where you stand financially. Many financiers will also want to see a liquidity budget. They want to know if you have insight into your cash flow and do not run into cash shortages during the journey. Fixed components of your financial plan are an investment plan, financing plan, liquidity forecast, and operating budget.
Would you rather want a complete sample business plan?
To help you on your way, we have written a sample business plan for you. It is a Hair Salon Business Plan Sample. It gives you inspiration for your own business plan. For more details, visit Mbplans.com.
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