How and why do you write a business plan?

Do you want to start your own business? Then you need to write your business plan first. This plan outlines the financial roadmap of your business and is something you can show your investors or partners. But what do you need to include in your business plan? And why is a business plan so important? You’ll find out on this page. 

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What is a business plan? 

A business plan is a document in which you outline the strategic and financial plan for your business, step by step. The plan describes exactly what you’ll be doing, how you will do it and which financial resources you will need. An accountant’s help is often enlisted for the financial part of the business plan. 

There are different kinds of business plans: 

  • a classic version for your entire enterprise;  
  • a specific version that focuses on just one part or a product/service; 
  • A version similar to a marketing plan, in which you draft a business plan for a product launch or an advertising campaign. 

What’s the purpose of a business plan?  

A business plan is more than just a roadmap. It’s a document that increases your credibility for when you request a loan from a bank. A document that helps you gain the trust of potential investors and partners. Furthermore, a strong business plan helps you convince contacts of how relevant and attainable your project is. 

You should create a business plan before or as soon as you start your business. By writing one, you’re thinking ahead and taking all sorts of scenarios into account. It helps you prevent unwelcome surprises. 

Are you required to write a business plan? 

Writing a business plan is not required if you start a sole proprietorship. For certain partnerships, like a BV, NV, or SC, you do need a business plan. 

Mandatory or not, writing a business plan is always the best course of action, no matter the business type you go with. Banks and/or investors will practically always expect you to have it at hand. 

How do you draft a business plan? 

To draft a business plan, you can use the Partena Professional Business Model Canvas: a must-have for every starter. The Business Model Canvas helps you ask the right questions and keep track of all the aspects that create a successful business.      

Another option is to use this template, which allows you to present your business plan on a singular page. 

A business plan consists of 5 elements:

1.

What’s your goal?

Summarise your idea. Explain how you came up with it and how your concept can contribute to our society. Stress the benefits, but also the potential risks. Set clear goals and translate those into a roadmap. 

2.

Who are you?

Present yourself and your business. This gives potential investors an idea of the kind of entrepreneur you are and how your business is organised. Your personal assets will also help you determine the additional talent you need. 

3.

Which legal status and business type will you choose?

The legal status you choose determines your liability, accounting and future taxes. Depending on your situation, you can choose to set up a sole proprietorship as a natural person or a company as a legal entity. 

4.

What’s your financial plan?

Your financial plan includes your own resources, as well as the amount you want to loan from a bank and the amount your investors are willing to put in. This plan gives you an overview of all expenses and investments for the first couple of years. 

5.

What kind of market are you targeting?

Conduct research into the market/industry you’ll be operating in and determine your most important target audiences. How are your competitors performing? What can you do better? Examine your strengths and weaknesses, opportunities and threats (SWOT analysis). This is the foundation of your marketing plan. 

The financial plan: the core of your business plan 

The financial plan is an essential part of your business plan. Compiled by a specialised accountant, and based on that very business plan, it helps you avoid unpleasant surprises and convince potential partners or investors. Without a realistic financial plan, it’s difficult to launch your business. Tangible and reliable numbers are crucial. 

For some business types, a financial plan is even required and must be filed with a notary. Does your company go bankrupt within the first 3 years of its existence? Then you and your partners can be held liable if the financial plan shows that you didn’t have enough capital to begin with. 

A financial plan contains multiple elements:

Investment plan

This plan contains an overview of the necessary financial resources and expenses to launch your business. These are expenses you have to make before you get your first client: renting or buying office space and making sure you have all the amenities you need, buying machinery or resources, etc. 

Financing plan

With this plan, you indicate how you’ll make the necessary investments. The plan helps you to quickly check whether you have enough resources. To write a financing plan, you need to look into how much capital you can invest and how much you need to borrow from a bank or investors. 

Income statement

Your income statement gives you an overview of your monthly income, expenses and surplus. It’s important that you think about your set monthly expenses (by calculating the budget you need for your salary, for instance).  

This break-even analysis gives you an idea about how much money you need available at all times and what your minimum annual revenue needs to be to cover all your costs. Your business will only be profitable if your revenue is higher than the break-even point. 

Cash flow

Your business may only start becoming profitable after a couple of months. But in the meantime, your expenses may keep rising. That’s why it’s important to make a monthly overview of your cash flow.   

This overview includes all the factors that impact your income and expenses. The difference between these two streams determines the cash flow of your company, which gives you a good idea of where, when and why there will be any financial shortages.  

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Need help with your business plan?

Does drawing up a business plan sound complicated? Then get some help! Partena Professional offers workshops to help you create a solid business plan