Studies show that careful planning has a decisive effect on company performance. Companies that have a business plan grow up to 30 percent faster than those that don’t. The main reasons why businesses fail have to do with lack of demand, limited capital, incorrect pricing and high competition. With a business plan, you can avoid these pitfalls. People who write a business plan are 2.5 times more likely to become entrepreneurs.
Companies that have a concrete plan for the development of the business have a greater chance of getting external capital into the company. If you have never written a business plan before, it can be difficult to know what it should actually contain. Below we go through some of the most important points and give you a couple of examples.
Your business idea
Before you start a business, you should have a clear business idea. The business idea is the most important building block in the company’s operations because it must attract customers and contribute to the profitability of the business. If you have several ideas, write them down and select the one that is feasible and can be turned into a profitable business.
Your vision describes what you want with your business and how you plan to get there. When you describe your vision for the business, you should include where you want your business to be in the future if all conditions are optimal. The vision can consist of a number of sub-goals and strategies to achieve them. It doesn’t have to be time-bound, but on the other hand, it shouldn’t be too far in the future either.
It is not unusual to confuse the concepts of goals and vision. In short, the vision is a vague and daring description of the goal. The goals of the business, unlike the vision, are measurable, concrete and time-bound. The objective describes what you want to achieve with the company, both in the short and long term. To get a better follow-up of the long-term goal, you can create a number of short-term interim goals. In this way, it will be easier to evaluate along the way and change the milestones if the business requires it.
It is also important that all goals are measurable so that you understand when you have achieved them. The next step is to figure out who you plan to sell your product or service to, that is, your customers and target groups. The knowledge in this area will make it easier and – also cheaper – to create an effective marketing strategy that actually produces results.