Salaries II – Plan B

Plan B

If you came to the conclusion, the proposal to improve labor productivity to obtain a better salary from the previous section  is not your cup of tea, maybe plan B is more your style.

You still have to work hard first, but you might have a greater influence on your own salary – by starting your own company. Thereby you need a plan B  – B for ‘Business plan‘. I asked an acquaintance of mine who sits regularly on the other side of the table, when young entrepreneurs present their business-ideas to obtain a start-up funding.

I started asking him “regardless of the type of business, what do you expect from a business plan?”

First, even the best business plan is no guarantee for success. But a good plan can make the difference between success and failure.

Many business plans are a little over the top, since entrepreneurs see a business plan more as a marketing tool with strategies and projections they hope to convince investors the business makes sense. This is a mistake.

A business plan should convince the entrepreneur himself. (after all it’s time, efforts and money that’s on the line).

So, at a minimum, a business plan should be as objective and rational as possible. A good idea can still lead to failure because of competition, insufficient funding, or a nonexistent market.

The business plan should serve as a guide to the business’s operations for the first months or years and give answers to the following questions.

• what’s the company’s purpose
• the management responsibilities
• personnel requirements
• marketing plans
• current and future competition

No fantasies please, a business plan should be convincing and provide concrete evidence that the business idea is reasonable.

“How long should a business plan be?”

Less is more. A good idea can be explained in a few sentences.

“If you can’t fund your business yourself and approach investors.  How does a business plan have to be  structured?”

A comprehensive business plan have 3 sections

1. business concept
2. marketplace
3. financial information

These sections are broken down into 7 components

• summary of the plan
• description of the business
• market strategies
• competition analysis
• design and development
• operations and management
• financial information.

After the title page, investors expect a ‘summary’ that should tell clearly, what the entrepreneur wants. No investor will read the whole plan to find what the business owner desires on a footnote on page 34.

After the ‘summary and the table of contents, a business description should follow with the respective Industry: Present situation, near term outlook and possibilities in the future. Next step should be an in-depth market analysis followed by a convincing research of competitors with their strengths and weaknesses. Investors like to read, how you plan to exploit a weakness of a competitor to your advantage.

A business plan should close with an operations- and management plan to describe how the business is working on a continuing basis and a financial forecast that proofs, a business owner know how to project and running a business.

Last but not least – a business plan is a professional document; it should look like one. Concise language, correct figures, no typos and quality paper is a must.