When starting your business you need to evaluate your future. You need to plan your products or services and you want to make sure that you’re successful. The truth however is you can’t be sure. You can prepare the best plans and still not be successful. So the question is: Why should you prepare a BP? Is there a possibility to increase the likelihood of success with a proper plan?
A correct, consistent calculation of a business plan can easily be achieved (with or without specialists). However, the specialists can’t assess the business model in all it’s depth in general. The opportunities and risks can best evaluated by the owners of start-ups and/or entrepreneurs themselves. They are able to describe the dependencies, interfaces and all non-financial information best.
A detailed calculation of an uncertain future is meaningless. A business plan is about the future might be, not necessarily how it actually will be. A Business Plan demonstrates, that you have made your homework and analysed a lot of different parameters, eg: Margins, Resources, etc. A business plan may help you to get funding (banks, VC, etc) but it doesn’t help you to manage your business. Remember, that for external lenders (banks, business angels) a business plan is often the first starting point for a thorough discussion of your business model (besides your personal standing). However also be aware that they have a lot of benchmarks and you have to explain, why you are able to generate more profits or have a better cost-structure than your peers. So knowing your position in the market is very important.
Customer Contacts, Know-How: all the non-financial aspects may be much more important for the success of your business than your financial plans. “Get the operations right and the financial success will follow.” Important non-financial parameters are:
- Competitors Knowledge
- Know-How of your team
- Expertise
- Customer Contacts
- Existing contracts
- Compliance
- Your Governance Structure
- etc
Nowadays pitching your project is as important as calculating a Business Plan. When pitching your project, you should be able to make a short and concise presentation of your business. When you mention some numbers from your business plan, you should highlight only 2-3 numbers. Eg. The turnover is XY mEUR and with a Margin of 30% you are able to achieve this or that result. Concentrate on the most important numbers that support your story.
So finally, do you need a business plan to be successful? No. But should you prepare one? Yes. Because it helps you to structure your thoughts and business model. Once established and once the funding is received – you should concentrate on your business.
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