1.3. What are business plans needed for?

Typical Situations for Business Plans

Typical foundation situations

There are many good reasons to become self-employed. The individual motives can be summarised from the perspective of business plans. Business plans are prepared for different occasions. They can be differentiated in their nature. Each business concept has to address the different preconditions of coming into being.

Structurally, four typical start-up situations are to be distinguished:   

• Business plans for setting up a company:

a)       Start-up

b)       Start-up

c)       New foundation

• Business plans for the takeover of a company:

a)       Company succession as family succession

b)       Company succession as a company purchase

• Business plans for franchising:

a)       Business method for taking over an existing business concept: franchisor and franchisee

• Business plans for operational business concepts:

a)       Development of new business areas

b)       Planning new company locations

c)       Development of new projects or business areas

Development of new products or new services

1.3.1. Business Plans for setting up a Company

Business start-ups should be defined as start-up, business start-up or new business start-up. The start-up typically begins with an "open" situation. The founder must and can define all the conditions for his business himself. The start-up is characterised by starting "from scratch". The start-up is also associated with the claim of wanting to make a personal living with it. It is usually aimed at being able to secure one's personal existence in the long term. A start-up can also include a business that is run "on the side". This would be a self-employed secondary activity. Every newly founded company has to find its market. The start-up must be designed in such a way that it can conquer a certain position in the market. In the start-up, it is important to develop the business idea in such a way that the start-up has a real chance. The product and the service must be clearly defined. The service offered must find customers who are willing to pay a certain amount of money for it. The service must be able to hold its own in competition. An organisation must be set up for the start-up. Goods and supplies must be purchased, processed and sold with an added service. A marketing plan must show how customers are to be won. The founder must be convinced of his business idea in order to find employees who will build up the company with him. Financing must be found. Finally, the turnover, minus expenses, should lead to a profit. Every start-up has a start-up phase. During this time, the crucial business relationships must be developed. A business start-up involves opportunities and risks. These must be convincingly presented in a business plan.

A start-up can be founded in any legal form. If a start-up wants to operate a trade, it is a good idea to run the company as a sole trader. However, a contractual agreement is always necessary so that the "internal" legal relationships are clarified. This will be necessary at the latest if the parties involved are in dispute. Finally, "freelance activity" is a possible legal form for the liberal professions (doctors, lawyers, consultants, etc.). It can be started without delay and registration. In the case of commercial activity, a business registration is required. In any case, the founder of a business must apply for a tax number for the preparation of invoices at the tax office.

1.3.2. Business Plans for the Takeover of a Company

Company takeover means the takeover of an existing company. This can take the form of a family succession or a company purchase. There are company exchanges worldwide for buying and selling companies. They are easy to find on the internet.

In business plans for company takeovers, the company successor does not start from scratch. The typical situation is: the company already exists, there are real products and services, a market, employees, a legal form, cost accounting and liquidity; there is a strategy of the previous owner. The takeover and the new start from the point of view of the successor begin on a very specific day and in a very specific situation of the company. The business plan must seek to grasp this initial situation of the company and develop the new strategy for the next few years based on it.    

The importance of business succession will continue to grow in the coming years for demographic reasons. More and more companies are being passed on to heirs or buyers for reasons of age. A not inconsiderable proportion of existing businesses will close because no successor can be found.

Company succession must be guaranteed to a large extent by legal regulations and agreements. In this context, business valuation plays a special role.

Family succession

In family succession, the owner hands over the business to a family member. There are usually various stages leading up to the final takeover.

1.       The start of a succession can begin in the management. By taking over the management, the economic path of the company is steered.

2.       The transfer of ownership can take place within the framework of leasing, inheritance or also donation. For this purpose, economic, legal and tax conditions must be observed.

If the business successor is a family member, the prior information about the business and the market is known to a large extent. The assessment of what the successor may face can be estimated. The success of a business succession is largely determined by how the parties involved succeed in transferring the management and ownership of the business to the new family member.

Of economic importance are the ownership structure and also inheritance claims of other family members. Compensation payments to heirs can increase the capital required to take over a business. If the compensation payments are taken from the business assets, the existence of the business may be at risk. Company succession should be clearly regulated by will, inheritance or transfer agreement.

Family succession presents a special psychological and economic situation. For parents, the son or daughter - at whatever age - remains a child. The family life situation creates specific behavioural patterns and economic dependencies as well as opportunities.  

Enterprise Value

The purchase or takeover of a company requires a thorough analysis of the company's situation. A look at the past and present of the company serves to obtain an assessment of the future potential for success in the market. However, the past says little about the future of the company. Yet determining the value of a company is a necessary and difficult process. There is no such thing as the "right" company value, because the value of a company always has a "psychological" or subjective dimension in addition to objective characteristics. The person who wants to buy something has different motives than the person who wants to sell something.

In business valuation, for example, a distinction can be made between the capitalised earnings value and the net asset value. The capitalised earnings value is based on the reported profit of the last few years and the expected profit of the next few years. In determining the capitalised earnings value, for example, the "annual profit" is determined and multiplied by a factor of three to ten as the purchase price. The net asset value focuses on the potential and assets of a company, including real estate, licences, patents, etc. The net asset value is calculated by multiplying the net asset value by a factor of three to ten.

In order to determine the value of a company, it is helpful to carry out a "due diligence", i.e. a well-founded valuation. All relevant factual, personnel, organisational, legal, economic, investment, tax, liability and profit aspects should be considered and evaluated in the inventory. The property description for a craft business looks different from that for a commercial enterprise, an agency or a medium-sized company.   

Company acuisition

Buying and selling companies is a normal occurrence in business life. Company exchanges - on the internet, at chambers of commerce, at associations - document this. The purchase of a company is a "transaction" - like many other transactions - with the special object that the product is a whole company.

The purchase of a company represents a takeover in the sense of a company succession by new owners. This can take place through active cooperation of the buyer and new owners; this can take place through a new managing director taking over the business as manager.

There are many reasons for buying a business. A founder can acquire a company in order to start his own business. An investor can buy a company in order to generate economic growth. In the case of a company purchase in the context of a merger, two companies enter into an economic unit. This can take place within the framework of a takeover and payment of a purchase price. In a "hostile takeover" (only for public limited companies), the buyer acquires the majority of the shares on the stock exchange against the resistance of the owners.

When buying a company, an economic valuation of the company is absolutely necessary. The economic valuation (due diligence) is the basis for purchase price negotiations. The purchase of a company can take the form of a one-off payment, annuity, instalment or permanent burden. The purchase agreement should establish clear ownership from the outset. The buyer should obtain free power of disposal over the enterprise.

In the case of a purchase against a one-off payment, the buyer must hand over the purchase price to the seller on a closing date. The buyer's capital requirements must be planned accordingly.

Financing of the purchase price can be secured through equity and debt capital. If the potential buyer does not have sufficient capital to settle the purchase price through a one-off payment, the purchase can be agreed against recurring payments (instalments, annuities, etc.). Then the seller takes over the financing function himself instead of a bank. Which type of payment is chosen also has tax implications. An accountant or tax advisor should be consulted for this.

Buying a company out of insolvency can be a favourable way to acquire a business and secure a market entry. Acquiring a company out of insolvency means entering an extremely difficult situation. The business management perspective must answer questions of legal transactions, employment relationships, the financial situation and especially the market. A differentiated analysis is always necessary.

Buying a company only makes economic sense if the company to be bought earns the purchase price itself within a defined period of time. This means: the company to be bought must earn the purchase price itself. The economic risk of buying a company lies precisely in this fact. If the company to be bought cannot raise the current debt service from the sale, the owners must provide additional external financing. If this does not succeed in the long run, insolvency or resale cannot be ruled out.

Seperation of ownership and corporate governance

In a business succession, ownership and management can also be separated. Without changing ownership, the management can be taken over by the successor. The option of legal separation can be undertaken by a sole proprietor in the same way as by a corporation. The separation of ownership and management is often the case with corporations. What is meant is the following:

• An owner (proprietor) appoints a managing director who runs the business as a manager. In return, the manager receives a salary with a performance-related commission. The owner does not take action himself, although he could legally do so.
• A limited liability company (GmbH) must appoint the managing director as a body according to company law (Commercial Code and GmbH Act). This can be an external managing director who is paid for this. If the shareholder also takes over the management of his company, he becomes a "managing shareholder".
• An owner can also have his business run by a "third party" in return for a lease or annuity.

In all cases, professional management by competent managers is sought as a solution.

The manager acts as an entrepreneur on behalf of the owner.

1.3.3. Business Plans for franchising

The term franchising (English: french; related to; French: frank, free) or concession sales refers to a business method. Franchising is also defined as a sales concept in which a franchisor provides a franchisee with, for example, the regional use of a business concept in return for payment. Franchising concepts are in principle growth concepts.

Three possibilities of self-employment in franchising can be distinguished.

1.       The franchisee takes over a business idea from a franchisor. They receive training and regular support. He is more integrated into the franchisor's distribution system than a mere authorised dealer. The franchisee sells his products or services legally independently. He pays a fee for the use of the "name or brand". This includes, for example, the use of uniform equipment, a uniform name and external appearance, a symbol or logo, a uniform distribution system and often joint bookkeeping. The franchisor checks the implementation of the concept and may give instructions.

2.       The franchisor has developed the franchise system, which serves as the basis of the joint business model. This is only seriously possible if the business idea has been tested and has successfully passed the practical test. Becoming a franchisor offers the chance to expand relatively quickly with one's own business idea. The franchisor should have developed a meaningful manual for the distribution of his business idea. To become a franchisor yourself, more is required than to run a single business successfully. Especially the financing of the business concept requires new know-how.

3.       In master franchising, franchise companies want to establish themselves in international markets. Since they do not have the cultural knowledge or the human and financial resources to do this on their own, they offer the "master franchise": The master franchisee receives a licence for an existing franchise system, whereby he does not become directly active as a franchisee, but strives to acquire further franchisees in this area (e.g. Germany). He does this on his own account and in his own name. This type of franchising is reminiscent of "snowball systems".

Advantages / Disadvantages for Franchising

Advantages for franchisees

• Entry into the market is accelerated because the system is known and established. The franchisee should have territorial protection.
• The franchisor provides a tested business concept and a complete service package.
• The franchisor has built up a good image through many years of marketing and maintains this permanently.
• The credit rating is higher with banks because the entrepreneurial risk is better known.
• The franchisee is nevertheless an independent entrepreneur.

Advantages for franchisors

• The franchisor uses in particular the willingness of the franchisee as an independent entrepreneur.
• The franchisor can avoid the considerable expense of a branch system and set up a distribution network tailored to his business.
• The franchisor can market its market-proven system and know-how with a relatively low capital investment.

1.3.4. Business plans for operational business concepts

Business plans are becoming increasingly important in small and medium-sized enterprises. They are prepared for new operational business concepts. 

Within the framework of the business concept, an existing or new business idea is developed with the help of the modules of the business plan. The business model can relate to new products, new services, new projects or new business areas. These are therefore project- and company-related concepts. Such business ideas can be a new establishment of a subsidiary as well as business expansion or even the reorganisation of existing business structures. Since these are carried out in an operational context, essential business information is available. The decision to implement a new business idea is usually made by the company's management.

Business plans need to be prepared especially when a company wants to start new offerings and projects. The practice of creating project-based business concepts is more pronounced in large companies with investment decisions than in SMEs.

Business plans for project-related businesses have some special features. In them, the framework conditions are already predetermined and known by the existing company. They arise in a development-oriented context and in operational structures. The decision for new business concepts is a strategic decision.

Experiences and discussions with managers in small and medium-sized enterprises or with business promoters reveal that in many cases it is not customary to prepare a business plan for a new offer or project. In many cases, it is assumed that daily activities already justify the start of a new project. This can turn out to be a momentous mistake with enormous economic consequences. This is especially true when competitors in a sector come up with the same business idea.

The awareness of having to re-establish the requirements of a business plan for a new project or a new offer is strengthened with increasing competition in global markets. At the same time, it is an unspoken part of the everyday life of managers and entrepreneurial decision-makers to constantly check whether what is to be done and decided would be successful in a business plan.

Betriebliche Geschäftskonzepte

Businesspläne sind insbesondere dann zu erstellen, wenn ein Unternehmen neue Angebote und Projekte starten will. Die Praxis, projektbezogene Geschäftskonzepte zu erstellen, ist in großen Unternehmen mit Investitionsentscheidungen ausgeprägter als im Mittelstand.

Businesspläne für projektbezogene Geschäfte weisen einige Besonderheiten auf. Bei ihnen sind die Rahmenbedingungen durch das bestehende Unternehmen bereits vorgegeben und bekannt. Sie entstehen in einem entwicklungsorientierten Zusammenhang und in betrieblichen Strukturen. Die Entscheidung für neue Geschäftskonzepte ist eine strategische Entscheidung.

Die Erfahrungen und Diskussionen mit Führungskräften in mittelständischen Unternehmen oder mit Wirtschaftsförderern lassen erkennen, dass es in vielen Fällen nicht üblich ist, einen Businessplan für ein neues Angebot oder Projekt zu erstellen. Vielfach wird davon ausgegangen, das tägliche Tun rechtfertige schon den Einstieg in ein neues Projekt. Das kann sich als folgenschwerer Fehler mit enormen wirtschaftlichen Auswirkungen erweisen. Dies insbesondere dann, wenn in einer Branche die Wettbewerber auf die gleiche Geschäftsidee kommen.

Das Bewusstsein, bei einem neuen Projekt oder einem neuen Angebot, die Anforderungen eines Businessplanes neu aufstellen zu müssen, wird mit zunehmendem Wettbewerb in globalen Märkten gestärkt. Dabei gehört es unausgesprochen zum Alltag von Führungskräften und unternehmerischen Entscheidungsträgern, ständig zu prüfen, ob das, was getan und entschieden werden soll, in einem Businessplan erfolgreich wäre.

Angebotsbezogene Businesspläne

Angebotsbezogene Businesspläne können als betriebliche Neuentwicklung bezeichnet werden. Die Erstellung neuer Angebote gehört in den meisten Unternehmen zum Alltagsgeschäft. Sie ist oft schon Routine und wird erst dann in ihrer wirtschaftlichen Bedeutung „neu“ bewusst, wenn sich die bisherigen Konditionen, z. B. die Preise oder die Qualitäten nicht mehr durchsetzen lassen. Dann stellt sich die Frage, was ist zu tun, um wieder erfolgreich im Markt mitbieten zu können. Spätestens dann ist Produktentwicklung, Kreativität, Serviceorientierung und Kostenmanagement gefragt. Die Neuentwicklung von Angeboten kann auf der Grundlage von Businessplänen erfolgen. Bei der Erstellung der Businesspläne ist insbesondere das „Neue“ herauszuarbeiten. Die Auswirkungen auf den Markt sind zu untersuchen.

Dabei ist das Leistungsangebot als eine Willenserklärung des Unternehmens definiert, an bestimmte Zielkunden oder Auftraggeber ein neues Produkt oder eine neue Dienstleistung, zu bestimmten Konditionen, liefern zu wollen.

• Art bzw. Leistung des Angebots,
• Beschaffenheit, Qualität und Güte,
• Menge und Preis,
• Lieferungs- und Zahlungsbedingungen,
• Erfüllungsort und Gerichtsstand,
• Eigentumsvorbehalt.

Die Aktualisierung und Veränderung der Angebote, um marktfähig zu bleiben, ist die Herausforderung, der sich jedes Unternehmen ständig stellen muss. Unternehmen, die dies vernachlässigen und die Weiterentwicklung im Wettbewerb unterschätzen, haben wirtschaftliche Probleme. Die Anzahl an Insolvenzen ist ein Zeugnis dafür, dass viele Unternehmen die Marktanpassung versäumen. In Deutschland gingen im Jahr 2016 mehr als 21.000 Unternehmen insolvent (Quellle: DESTATIS. Statistisches Bundesamt 2017).

Angebotsorientierte Businesspläne zeichnen sich dadurch aus, dass sie die Neuentwicklung eines Produkts oder einer Dienstleistung aus betrieblichen Strukturen heraus forcieren.

Projektbezogene Businesspläne

Ein projektbezogener Businessplan ist ein Geschäftskonzept, dass erstellt wird, wenn ein neues Projekt mit neuen Angeboten im Unternehmen durchgeführt werden soll. Dabei sind die Unterschiede zwischen angebots- und projektbezogenen Businessplänen nicht struktureller Art, sondern auf den innerbetrieblichen Zusammenhang bezogen, in dem sie entstehen und definiert werden.

Werden die Unterschiede eines Start-up zu einem projektbezogenen Businessplan beleuchtet, so befinden sich diese vor allem bei den Rahmenbedingungen, weniger im Kern einer Geschäftsidee.

Anders, als bei Neugründungen, sind die betrieblichen Rahmenbedingungen für das Geschäftskonzept bekannt. Es liegen in der Regel fundierte Marktkenntnisse vor. Es gibt eine strategische Vision für das Projekt und damit für das Unternehmen. Deutlich werden muss, was Gegenstand des Projekts ist, welche Ziele verfolgt werden und wer diese umsetzen soll. Die Betrachtung der Chancen und Risiken soll den innerbetrieblichen Handlungsspielraum erkennen helfen.

Mit der Einführung und Umsetzung von Businessplänen in der mittelständischen Wirtschaft wird das unternehmerische Denken und Handeln motiviert.

Projektmanagement

Projekte zu leiten, bedeutet, eine Aufgabe ganzheitlich zu lösen und unternehmerische Fähigkeiten unter Beweis zu stellen. Erfolgreiche Projektleiter handeln wie Unternehmer.
Das Projektmanagement kann als Teil eines Businessplans betrachtet werden. Bei Projekten können teilweise jedoch wesentliche Faktoren ausgeblendet werden, die in einem Businessplan eine unabdingbare Rolle spielen, so zum Beispiel, die der Finanzierung, die der Eigentumsverhältnisse, die des Return on Invest (Kapitalverzinsung), die des Marketings oder die des Liquiditätsplans.

Elemente des Projektmanagements