Business Model Vs Business Plan – Once formulated, too many organizations set their business model in stone. Instead, the goal is to create a dynamic model, which is open to incremental change and innovation. The UNITE Business Model Canvas helps you describe, challenge and innovate your business model to maximize value across your organization.
In this article, Digital Leadership will guide you through the basics of a business plan – we’ll cover financial planning, business concepts, examples of a good business plan, and why business plans are so important today.
Business Model Vs Business Plan
In short: a business plan is a working document that contains all the company’s goals and strategies.
What Criteria Should A Good Business Plan Meet?
A business plan serves multiple purposes, the two main ones being: (1) to convince potential investors outside the company, (2) as a basis for further strategy and planning concepts within the company. An in-depth planning phase is required before writing a business plan.
A business plan does not play an important role only when a company is founded. A good business concept follows the organization continuously and constantly expands and adapts to changing circumstances. The classic business plan thus becomes a constant companion. It is there to solve questions about the positioning of the business strategy, analysis of the competitive situation and further development of the company. The business plan serves as a central element of management and fulfills important internal tasks:
The business plan is not only important for the internal structure of the company. A good business plan is also an important basis for external perception because it is the business card of the company.
First of all, it convinces potential investors of the company and thus helps to secure financing. This may be necessary when establishing a company, but also later when acquiring new investment funds for marketing or developing new products.
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Second, the business plan can also be used in negotiations with potential partners or authorities. In this way, it can serve to secure existing and planned business relationships with customers or suppliers.
When starting a new business, it makes sense to write a business plan. A strong business concept helps you find investors and convince big business figures, investors or banks of your business idea.
In addition, a business plan forces beginners to face the strengths and weaknesses of their business idea. But an existing company can equally benefit from a business plan. Many companies often lack a clearly identifiable strategy or guidelines against which success can be measured.
A business plan also leads to greater transparency in entrepreneurial decisions and is essential for an existing company when raising external capital and investors. An increasing number of investors and capital providers require the submission of such a plan, which is why a strong business concept is so important.
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In general, there are no fixed guidelines on how a business plan should be structured. Business concepts largely depend on the recipient of the business plan and the orientation and structure of the company. The following points should therefore only be understood as basic building blocks that must be adapted to the individual situation.
An executive summary is a summary of the business plan, written on no more than two pages. It is the reader’s first impression of the business plan. It has two main goals: (1) to get the reader interested in the rest of the document and (2) to be a useful summary that makes sense even without reading the rest of the business plan. The summary should provide an overview of the company, explain the objectives and describe the business idea, range of services and corporate strategy.
The purpose of this section is to provide an overview of the company’s strategy. The first step is to illustrate the business concept. This is done by showing both the business idea and the ways and means used to successfully implement the idea. At this stage it can also be helpful to include a timeline of the implementation of the business concept. Information about the company or headquarters location can also be included in this part of the business plan.
Business Model Et Business Plan
A thorough analysis of the target market is extremely important for a business plan. Insufficient market analysis is often the cause of failure, especially in the start-up scene. Industry and market analysis is essential to explore the potential of a target market.
This section is focused on showcasing the project’s services or products. The most important aspect is to make it clear how the products and services differ from the products and services of the competition. Ideally, this is where you should describe your unique selling proposition.
This section focuses on plans for marketing the service/product. It describes the marketing strategy, the time schedule of the planned actions as well as the preparation for entering the market. In addition, the company’s goals for market leadership, market share, revenue and awareness should be added here.
Sales policy means showing how the product/service will be sold to the customer. Future developments and adjustments to products and customer needs should also be taken into account.
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Regarding price policy, it is necessary to explain the origin of prices and their calculation. The justification of the basic strategy of pricing and financial planning should be added here.
Communication policy and advertising are essential to contribute to product sales. The business plan must explain what business concept and strategy is used in the advertising media.
This section should explain the skills and qualifications that characterize management and introduce employees in leadership positions. Special mention should be made of industry knowledge, social skills, previous achievements and professional experience. Additionally, staff development can be discussed at this time.
After that, the focus should be on the organization aspect. How is the company organized? The focus should be on procurement and development, production and sales, as well as administration.
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In the “Opportunities” section, the potential of the business idea should be presented, as well as the conditions and business concepts under which this potential can be used.
Risk exposure is also important to include in the business plan. It shows that the company dealt with the business concept in detail and critically. Of course, this section should also include potential scenarios that illustrate risks and show possible solutions.
The most important element of the business plan is a detailed presentation of the financing of the project. This means that at this moment all the aforementioned analyzes and plans must be converted into concrete figures.
In financial planning, it is necessary to add a profit and loss account (P&L). The balance sheet provides an overview of the state of the company’s assets. This property situation is shown according to the origin and use of funds. In the liquidity plan, expenditures are then compared with available funds.
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The last part of the business plan is the appendix. Here you will find all the necessary documents, such as CVs or company registration. Additionally, this is where you should add tables or graphics that could not fit in previous sections. That being said, this section shouldn’t take up too much space.
For a more in-depth look at the basics of a business plan, financial planning, business concepts and why business plans are so important, check out the Digital Leadership UNITE Business Scorecard business model card. The scorecard gives you the most critical questions you need to challenge your business model. It will help you assess your progress, discover your weaknesses and prepare for your investor pitch. Get access to 50+ UNITE models of innovation and transformation that are completely open source and completely free to download! https:///UNITE.
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