Business Plan and Entrepreneurship: Creating a Winning Formula

Is planning a good thing, or is it better to improvise? In the age of innovation and with start-ups dominating the scene, there is a temptation to improvise: many go the ‘learning by doing approach’ preferring to launch directly into action rather than wait whilst defining a strategy.

February 1, 2020

An important investment in terms of time and resources is required when a winning business plan is needed, capable of mapping activities, organizing processes and guiding the launch and momentum of a business in the short and medium term. But with it comes unparalleled competitive advantages.

One of these is the opportunity to understand and exploit the economic potential of the business idea before taking the plunge. According to the research ‘Are Formal Planners More Likely To Achieve New Venture Viability? A Counterfactual Model And Analysis’ (Francis J. Greene, Christian Hopp – December 2016), entrepreneurs who structure a precise and detailed business plan, are 16% more likely to achieve expected profitability than those who preferred to improvise.

Needless to say, however, that in the age of speed, being flexible towards changes in the market and the competitive environment can be a winning asset for a successful entrepreneur. A need for responsiveness that does not fit well with the methodological rigidity of a business plan.

So what makes a business plan functional and useful for the business?

Here is the winning formula for a really effective business plan:

1. Time is crucial

When drafting an effective and efficient business plan, time is crucial. A business plan should not be written too soon, at least not before the full scope of the opportunity within the industry is known, as well as the competitors and the market in question.

2. Consistency between facts and assumptions

The value of a business plan can be measured by its ability to describe the business you are about to launch. In this regard good Strategic Planning becomes relevant to define a realistic plan. It is therefore especially important to take time when writing the project’s plan and evolutionary roadmap. Facts and numbers must go hand in hand and will be all the more convincing the more realistic they are therefore based on empirical data.

3. Key Information

Each sector is unto itself, however there are 6 points which need to be included when writing an effective business plan. First is an executive summary (the summary of the business, the medium-term goals, the opportunities), continue with a complete description of the business idea with alongside a market analysis. Then present your organization (the team, business areas) and give evidence of your current financial situation and explain how you expect to achieve the goal. Finally, if you are looking for funds, you will need to inform investors of the amount you are requesting and provide all the evidence to support this number.

4. Real-life examples

If you want to engage investors, your best option for a successful business plan is to have tangible data. Explain with real-life examples, with best practices – even if they belong to other players in the market – with prototypes and with in-depth simulations why your idea will work and what makes your business an opportunity to invest in. Providing tangible supporting evidence reassures funders and helps them buy in to the idea with less hesitation.

Are you ready to write the business plan that could decide the outcome of your business idea?

If you are then remember to follow our advice.

If not, you can rely on a strategy consultant for support throughout the process or in specific areas. Whatever you choose, the important thing is to leave nothing to chance: an effective business plan is the key to opening the doors to market leadership.