1 Practical Advice on how to write a business plan Dr. Thomas Kunz

2 Why is a business plan necessary? - For detailed planning and controlling - To win investors

3 Business Plan Structure 1. Executive Summary 2. Product Idea 3. Management Team 4. Marketing 5. Business System and Organization 6. Realization Schedule 7. Chances and Risks 8. Financing

4 1. Executive Summary Purpose: To give a clear, concise and compelling summary of the intended business To provide an complete overview of the business plan for reader who is under time pressure To get the reader excited about the presented opportunity Size: 1-3 pages

5 2. Product Idea Most important: The whole purpose of any company is to solve a problem that exists in the market or otherwise said to satisfy the costumer needs. Detailed Description of the costumer needs and the provided solutions. Very important is to stress out the unique selling proposition. Distinction between Products/Services:

6 2. Product Idea Product Overview What is the product? What does the product? What are the features? What are the benefits? What is innovative about the product (Picture of the product/protype, if possible an if it helps the reader to better understand the product)

7 2. Product Idea Product Explanation of the product characteristics: size, shape, color, cost, design, quality, capabilities, technological life- span Patent protection of the product. Explanation of the way of production, the materials required, and the type of labor needed.

8 2. Product Idea Service Overview What is/are the offered service(s)? How the service(s)work What need do the services address in the marketplace? Where will you operate? What makes your service different? What materials or equipment is needed? Days and hours of operation? Explanation of the service process What is innovative about the service(s)?

9 3. Management Team The management team is the crucial factor in a startup- company. It is important to have a very good business idea but it is the people behind the business that have to work out the idea. A description of each team member should include the following points: - Title of the position of the team member - Duties and responsibilities of the position - Work experience and success of the team member

10 3. Management Team - Education of the team member - C.V. of the team member Description of the board of directors

11 4. Marketing Description of the target Market: Market size, market growth, costumer characteristics (age, gender, geographic location, income bracket, buying similarities, and more), competitors (most important suppliers and their market share, way of operation, market share, strengths and weaknesses, also substitutes and potential competitors should be considered) Description of the marketing plan (4p: product, price, place, promotion)

12 5. Business System and Organization Typical Business System: Resarch & Development Production Marketing & Sales DistributionService Task: Develop a specific business system for your company!

13 5. Business System and Organization Organisation: Definition of Responsibilities

14 6. Realization Schedule The Realization Schedule should consist of: - A Chart showing the whole realization schedule with all work packages in detail - Important Milestones - Important Interdependencies between the work packages

15 7. Chances and Risks Point out the opportunities that lie in the enterprise! Every Enterprise also involves risks: environmental risks and risks that lie in the company itself. Risks are not static and can change. Task: Identification of all the risks and development of counteractions!

16 8. Financing Content: - Sources and uses of funds - Balance sheet - Profit and loss statement - Liquidity planning - Financial ratios

17 8. Financing Sources and Uses of Funds This section should explain to the reader which sources you expect to secure capital from, and what you specifically plan to spend it on. Possible Sources: Equity (Own savings, venture capital, funds, …) Loan Capital (bank loans, state support, mortgages, …)

18 8. Financing Balance Sheet Year 1 : quarterly Projections Year 2-5: Yearly projections

19 8. Financing Profit & loss statement Year 1 : quarterly Projections Year 2-5: Yearly projections

20 8. Financing Liquidity Planning Year 1 : monthly projections Year 2-5: quarterly projections

21 8. Financing Financial ratios: Financial ratios are formed from two or more numbers taken from the financial statements of businesses. The numbers may be taken from the balance sheet, the profit & loss statement, or the Cash flow statement and combined in any number of combinations. Examples: - Return of Capital Employed (ROCE) - Return on investment (ROI)