Business concept
The business concept is the qualitative part of a business plan that describes the “business story” of the company. It primarily outlines the business idea and, in particular, its implementation. One of the most important aspects of creating a business concept is that it should always be directed towards the recipient or reader of the concept. The recipient (investors, lenders, or landlords) of the concept or business plan each has specific interests, and for this reason, they should be shown what they want to see.
THE TOP 3 QUESTIONS ASKED BY INVESTORS
Typical structure of a business plan
This section aims to provide essential information about the primary concept of the business activities and business development. It primarily answers the following questions:
- What is the business idea? What are the central elements of the business concept?
- How did the idea originate?
- What are the unique aspects of the business or the offerings?
- What contributes to the success of the business?
- How does the business evolve over time?
- What steps have been taken toward implementing the elaborated business idea?
The presentation of both the founding team and staff is of paramount importance for the recipients of the business plan. Particularly in the case of startups, the central role of the founder should not be underestimated. The potential success of a business venture is often significantly influenced by the personality of the founder. Therefore, a good business plan should include a meaningful biography of the founder, along with information about their qualifications and relevant business experiences. In cases where the founder lacks industry experience, it should be demonstrated how this deficiency can be addressed or compensated for. For this reason, describing employees or the personnel strategy is also essential.
- Have you already found the suitable premises?
- What are the key considerations in choosing a location?
- Under what legal structure will the elaborated business idea be realized?
- When is the planned start of business operations?
This section is primarily intended to describe the unique aspects of the product or service offerings. Pricing, collaboration with suppliers, and the advantages of the range of products or services offered – all of these are included here. Ultimately, the reader should gain an understanding of how revenue is generated and what demand the company will address through its business activities.
Every business should know its customers. The target audience and pricing segment should be precisely defined. When the company understands its typical customer, it can identify and address basic needs. This enables the company to choose the right marketing strategy and effectively reach its customers.
Typically, when starting a project or a business venture, various marketing measures are necessary. These range from creating a website to SEO and online activities, to newspaper advertisements and the distribution of flyers. In a well-founded business plan, the specific steps and resources for marketing should be mentioned and, depending on the level of detail, specified in more detail.
The SWOT analysis is primarily used to define the company’s situation and develop a strategy for business development. This tool analyses both internal and external factors. Internal factors include the strengths and weaknesses of the company. External factors consider market threats or competitors as well as potential opportunities that this market can offer.
Market analysis may be necessary to better understand the market before investing more resources in certain measures. It can analyse competitors in terms of their offerings and the demand situation. This way, market gaps can be identified that the company can specialise in.
The strengths and weaknesses of competitors can be analysed. Based on this analysis, a strategy can now be implemented that exploits gaps in offerings or offers pricing advantages over competitors.
For smaller business plans, points such as SWOT analysis or market and competitor analysis (which can be time-consuming) can be omitted. When seeking investors or lenders, the requirements for a business plan tend to be larger, and therefore, more of the above-mentioned points should be presented (and in greater detail).