Drawing up a business plan: what for?
You’re an entrepreneur at heart and have a ton of ideas – so you’ve decided to start your own business. In your search for financing, investors and partners, you are consistently faced with the same request: send us your business plan! What is a business plan and what is it for?
One definition among many
A business plan is a comprehensive document setting out:
- the core idea for your business;
- its commercial prospects and an analysis of the risks involved, as well as your positioning in the existing market;
- the strategic objectives and action plans for putting the idea to work and capitalising on the business opportunity;
- the financing needs and income forecasts for the next 3 to 5 years.
From the initial idea to the actual launch of your business, there will be many hurdles to clear. In all of this, your business plan is the touchstone for creating your company, monitoring its development and judging its performance. Lastly, it also serves to draw in the partners you need to make your project a success.
Above all else, the business plan is a crucial tool for you too. It helps you structure your project, identify the necessary resources and potential flaws, study its feasibility, set objectives and fix deadlines.
A reference point for your partners/staff
Your partners and staff can’t read your mind. They need a yardstick for measuring what has been accomplished and for checking that the company is still on the right course. The business plan serves as a reference point for all exchanges on the project and any subsequent adjustments.
A must-have for your financing
Most people need financial support to launch their business. When you first approach your bank, it will almost certainly ask to see your business plan before granting you a loan or bank guarantee. Needless to say, the document must be compelling and demonstrate your seriousness as an entrepreneur, as well as underline the relevance of your past experience and the quality of your project. Get right to the point: your goal is to get the reader’s attention, demonstrate the credibility of the undertaking and prove the potential that you represent for the bank.
Your bank will almost certainly ask to see your business plan before granting you a loan or bank guarantee.
A tool for drawing in partners
A business plan also allows you to clearly communicate your idea in order to convince partners, service providers and clients to work with you. It goes without saying that this plan should be well laid out, and that you should provide a well-crafted executive summary if you want the document to have the intended impact.
Depending on your target audience, you may choose to highlight different items in your plan. For example, a service provider will want to know about your financial backbone and the potential for future orders. A client will focus foremost on the user benefits of your offering before studying any technical features. A capital investor will want to assess the risk-adjusted return on investment for the project. Place yourself in the shoes of your audience and anticipate any obvious questions.
Now you know what a business plan is for, it’s time to get started! Need a little help putting one together? Just discover how to structure your business plan.