At the beginning of their careers, founders face the challenge of writing a business plan to realistically assess where their business is headed. But what should it look like? What's important? And where do you need to be careful? We spoke with Fabian Brunner, startup coach and coordinator of the "Munich Business Plan Competition" (MBPW) at Baystartup, and gathered the most important tips for startups.
What are the first steps when a founder wants to write a business plan? What information is needed for this—and how can Baystartup support them?
On the Baystartup website you can find our Business plan creation manual for free download This manual provides examples of what a finished business plan looks like. For those who are completely new to business planning, there are countless videos, specialist books, and sample business plans or pitch decks from successful companies available online that can give you an idea of what a finished plan will look like. For detailed implementation, questions, and fine-tuning, we offer our free business planning workshops and the Bavarian Business Plan Competitions.
No room for irrelevance and enthusiasm
What are the most common mistakes when creating a business plan?
There's no such thing as "the" business plan. A business plan for starting a business in the restaurant industry, for example, will have completely different metrics than one in the ICT sector. A business plan isn't a product that's set in stone, but rather serves as an explanation of the current situation and a vision of where you want to be with your idea and your team in the next five years. The biggest mistakes are lack of objectivity, inaccuracy, and raving about your own idea. Business planning is primarily about the business. It's not a sales catalog for the product, solution, or service offered.
In addition to business plans, there's also the option of working with fully developed "pitch decks." The preparatory work and considerations for what ultimately forms the document—whether it's a pitch deck or a traditional business plan—are the same.
The business plan is a dynamic document
How strictly must entrepreneurs adhere to the business plan? Is there room for changes?
A business plan or a fully developed pitch deck consists of facts that are known at the present time and assumptions that could materialize based on logical connections and intensive research. At Baystartup, we don't like to talk about "writing a business plan," but prefer to refer to the content we convey as "business planning" to clarify that it's a dynamic document.
A plan written in 2019 cannot and will not predict what will happen in 2024. The plan should therefore be viewed as a plan with objectives. It reflects whether the founders have control over the present, i.e., whether they have conducted sufficient research and gathered sufficient experience about themselves and other stakeholders, and whether they can make realistic assumptions for the future based on this. There are many methods and techniques that even claim that a business plan is superfluous, as methods such as Lean Startup, Design Thinking, or Agile Development make the business plan obsolete.
We believe that one does not exclude the other, but rather that methods complement each other. In short: well-thought-out financial planning, a sprint in the sales model, an A/B test in pricing, or the Business Model Canvas, and so on, are not fundamentally contradictory methods or approaches. It is up to the entrepreneur how they combine these methods and the results they derive from them. A business plan provides the framework for this and gives the company a time horizon.
Acquire basic knowledge through workshops
Can a Business Model Canvas replace a business plan?
In my opinion, the Business Model Canvas cannot replace the business plan. However, a business model can be a good starting point for a business plan. A Business Model Canvas can also be a great help when faced with the challenge of adapting the business model to new and changing market conditions. I am personally a fan of the Business Model Canvas and recommend it as a starting point for creating a business plan.
Where can founders get help with creating their business plan?
With us, of course! My colleague Sebastian Bock and I Basic workshops and compact workshops throughout Bavaria, including Munich, of course. The following topics are covered: 1. Business Idea, 2. Marketing and Sales, and 3. Financial Planning. The three main areas of the workshop content are tailored to the requirements of the MBPW.
The workshops are designed to provide participants with as much valuable information as possible, helping them achieve top spots in the competition. All founders who submit their documents to the competition receive feedback from our expert jury. We are currently working with around 300 volunteer jurors—university professors, successful entrepreneurs, high-ranking corporations, consultants, and investors—from across Bavaria. They read the submissions and provide in-depth, written feedback on the plans. A team typically receives feedback from 8 to 10 experts on its submission. This is sometimes worth its weight in gold, providing founders with important, market-relevant information on what they can improve in their business model, and where further work is needed.
Phase 2 of the MBPW is underway
How does the MBPW work? Who can participate, and what's in it for the startups?
In principle, anyone can participate. The more technological and scalable the idea and the associated business model, the higher the teams' chances of winning. Startups can choose whether to submit a business plan or a fully developed pitch deck. In addition to receiving feedback from the judges, the teams will have the opportunity to participate in Baystartup's financing coaching program. Here, we work with the teams, depending on their needs, toward a financing round. Additionally, there are cash prizes totaling over €48,000 to be won.
The competition is divided into three phases:
Phase 1 has just ended; here, a 7-page idea concept must be submitted — with an executive summary, information about the product or service, as well as the market and competition of the business idea.
For those who have not yet participated in this process, startups can also be a career changer enter Phase 2: The deadline is March 26, 2019. A 20-page outline concept must be submitted during this phase. A rough business plan with information on marketing and sales, as well as the business model, opportunities, and risks for the company, is required.
Starting in Phase 3, our judges will want to see a complete business plan of approximately 30 pages, including financial planning. The submission deadline is June 4, 2019.
Fabian Brunner, Startup Coach and MBPW Coordinator at Baystartup. (Photo: Baystartup – Andreas Gebert)
