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Creating or managing a business without a business plan borders on improvisation and results in a real waste of time and energy. A development plan is crucial to clarify your vision and strategy, attract talent, and serve as a communication tool with your stakeholders, both internal and external. This process allows you to formalize your strategic, financial, and operational plans and to convince potential investors or key partners. The format of the business plan varies, but it must be clear, concise, and tailored to the specifics of your business.
E. Krieger
Creating and developing a company without a business plan not only condemns you to improvisation but will also make you waste precious time in terms of sharing information about your goals and growth strategy.
A brilliant but isolated entrepreneur risks missing out on real development opportunities, since intellectual capital multiplies as it is shared.
Attracting Money and Talent
Even though it is a mandatory step for most startup creators and SME managers, a business plan is not only for securing financing. As Jean-Baptiste Rudelle, a serial entrepreneur and co-founder of Criteo and of a tech entrepreneur collective, aptly points out, the main function of a business plan and all the pitch sessions that accompany it is to mobilize talent.
This perspective is highly fruitful because, for companies aiming for extraordinary growth, the competition is more about detecting and retaining said talent. Funding then becomes a consequence of having managed to gather an exceptional team.
The Main Virtues of a Business Plan
The business plan is a strategic document that summarizes your entrepreneurial project, clarifies your objectives, and describes the means to achieve them. Therefore, it is useful in several ways:
- Clarification of your vision and strategy: The business plan allows you to clarify and share your vision and strategy. It helps explain your main challenges, including your competitive situation.
- Strategic and financial planning: The business plan specifies the steps necessary to achieve your goals and presents the required needs and resources, particularly in terms of financing.
- Communication and sales tool: The business plan also serves as a communication tool to present your project internally (associates, employees) as well as to key external stakeholders: investors, banks, business partners.
Numerous Recipients
A business plan thus has several functions and is intended for various interlocutors depending on the objective and your stage of development:
- Your board of directors, management team, and employees: Defining your development axes is an essential prerogative of your board of directors, but this approach must be nourished by the expertise of all your teams and operational leaders. Developing a plan outlining your objectives and the means to achieve them will foster a shared vision and ambition.
- Your business partners: Before committing, some strategic clients or suppliers may ask for significant parts of your business plan to be reassured about your economic model, strategy, and development prospects. Your plan will have little substance if your business model (value architecture) is not formulated in close relation to these key clients and suppliers.
- Potential investors: The business plan is a mandatory step for venture capital funds and other institutional or individual investors wishing to evaluate the economic and financial potential of your company.
- Banks and financial institutions: For these entities that may grant loans to your business, the business plan helps assess their risk and your repayment capacity.
- Administration and local authorities: Public organizations may request a business plan to grant you subsidies, repayable advances, or even essential authorizations to start or expand your business.
The Common Denominator: Created Value
The business plan is therefore an essential tool for structuring, planning, and communicating your entrepreneurial project.
Although the potential recipients and the interlocutors involved in the formulation of your business plan are numerous, they are all concerned with the value you create and how you share it.
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Form and Content
The format of the business plan varies according to the recipients. However, the essence of the project should be summarized in one to two pages via an executive summary. For the main document, it is better not to exceed twenty pages, excluding appendices. Such a document should not be an indigestible compilation of technical, commercial, and financial studies that few people would read.
The proposed outline below is purely indicative: each business project is specific, and the business plan of a tech startup will emphasize very different elements from an online service. Even though several items are essential (market, team, offer, competition, action plan, and financial forecasts), it is important to focus on the crucial aspects of your business project. You can adapt this outline as you see fit:
- Genesis of the company, vision, and mission.
- Founders, executives, and strategic committee.
- Identified need and proposed solution.
- Target market and growth potential.
- Value proposition and business model.
- Competition and competitive advantages.
- Commercial action plan and development schedule.
- Financial forecasts and required funding.
The process leading to the formulation of the business plan is as important as its content: it is a coherence exercise that must involve your teams, otherwise, your vision and action plans are unlikely to be shared and even less implemented.
Good luck, therefore, with the formulation and implementation of your business plan!
