A plausible business plan covers everything – from marketing costs, living expenses to retrospective tax payments. At the request of Hamburg News, Doreen Hotze, Manager of the Founders’ Centre at the Hamburg Chamber of Commerce, has drawn up seven key tips for start-ups to heed when drafting a business plan. Hotze, an economist by profession, has inside knowledge of the challenges facing budding entrepreneurs.
1. Draft a business plan for yourself – not the bank!
Only those with a clear plan and a central theme can assess whether milestones have been reached or if strategic improvements are needed. Therefore, hands off purchased, ready-made business plans. Do not copy other people’s business plans. A proficient reader notices that and so too does an investor or bank.
2. Do not use technical jargon!
The business plan should be written in a clear, understandable manner. Do not use specialised terms when talking about technical innovations. People who are unacquainted with the sector should be able to read and understand your business plan. Keep it short and simple. Sketches or drawings are advisable for explaining technical aspects.
3. Impress with clarity and objectivity!
Every plan should present the business idea convincingly. Thus, the case must be made coherently and logically. A clear breakdown and structure are imperative.
4. Score with good figures!
Figures are crucial to a business plan – regardless of sales, costs, liquidity or indicators. The figures must add up. Thus, it is important to calculate prices, sales and anticipated profits that are not overly optimistic, but that can be planned realistically. No one expects the figures to be absolutely correct, but diverse scenarios should be envisaged and the results must be sound. Do not forget your own costs of living when planning liquidity!
5. Draw up a marketing plan!
Founders often forget to focus on marketing. It’s important to show how you intend raising awareness of a product or service and gaining customers. This can be done in several ways. What is the best means of bringing an offer to a target group? Which concrete measures (short description) are being planned at first as well as ongoing marketing measures? That costs money and must be accounted for in a sound marketing budget.
6. Liquidity includes back taxes
Retrospective tax payments are frequently overlooked. Yet, valued added tax (VAT), income tax and tax must be paid. Sufficient liquidity is needed to foot these payments. The first tax assessment often arrives much later. If higher sales and a profit have been earned and advance payments have been made, a subsequent payment is made. Therefore, it is advisable to make higher advance payments or to build up a buffer for this case.
7. Use any support offered – accept assistance!
Get information or use any advice offers on how to draft a business plan properly and the content that it should reflect. Readers of business plans expect completeness and plausibility. Several offers e.g. the Chamber of Commerce’s tool (www.gruendungswerkstatt-hamburg.de) are available. (Just don’t buy a ready-made business plan.) Discuss a completed business plan with an expert before presenting it to a bank or an investor. After all, first impressions do not get a second chance. Use the free advice offered by the Chamber of Commerce Hamburg for your concept.
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