1.3. What are business plans needed for?

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.