What Is a Business Plan?

Definition: What Is a Business Plan?

A business plan is a written document that presents the business idea, market, strategy, and financial planning of a start-up in a structured way and answers the central question: is the project economically viable, and why? It is the basis for the start-up grant (Gründungszuschuss), bank loans, and funding applications.

In practice, the business plan has two functions.

A business plan is therefore not a bureaucratic obligation but your most important management tool in the start-up phase. The more reliable your numbers and the clearer your argumentation, the higher your chances of funding and financing.

Structure of a Business Plan at a Glance

A business plan is formally divided into a cover page, table of contents, text section, numbers section, and appendix. The text section usually consists of eight chapters. There is no mandatory outline; this order has proven itself:

• Executive summary
• Business idea & vision
• Founder profile
• Market & competition
• Marketing & sales
• Organization & personnel
• SWOT analysis & risks
• Financial plan

What exactly belongs in each chapter and what reviewers look for is covered in detail under What belongs in a business plan? Our guide to the structure and outline of a business plan shows samples of the cover page and table of contents.

Writing the Executive Summary

The executive summary is the one- to two-page summary at the beginning of the business plan. It is written last but read first, and it often decides whether the bank or funding body reads on at all.

A good executive summary answers the most important questions on a single page: what is the idea, who is behind it, which market, what capital, what benefit? It is not a foreword but a condensed pitch.

What belongs in it:

• Business idea and offering in one or two sentences
• Founder: qualifications and experience
• Target market, customer benefit, and unique selling proposition
• Key figures: revenue and profit target, capital requirements
• Purpose of the plan: financing, funding, or equity investment

Example (shortened)

“Muster Gastro GmbH will open a regional lunch restaurant in Köln-Ehrenfeld in 2026. Founder Anna Muster brings ten years of hospitality experience and training as a restaurant specialist. The target group is working people within a one-kilometer radius; the unique selling proposition is a daily changing, regional lunch menu at a fixed price. Renovation, equipment, and start-up costs require capital of €85,000, covered by a KfW StartGeld loan and €15,000 in equity. From the second year, an annual net profit of around €40,000 is expected.”

Tip: write the executive summary only once the financial plan is done; then the numbers will be right. You can create the financial plan step by step with our guide.

Our guide Writing the executive summary shows how to build the summary sentence by sentence, with a complete sample.

What Types of Business Plans Are There?

Not every project needs the same format. Three variants are common:

• Classic (full) business plan: the fully written-out document with all eight chapters and a financial plan, the format that banks, KfW, and the Employment Agency expect.
• Lean or short business plan: a condensed version (a few pages) for the early idea phase or small projects, usually not sufficient for funding applications.
• Business Model Canvas: a one-page visual overview of the business model, ideal for developing and organizing the idea, but no substitute for the fully written-out plan.

Business plan vs. Business Model Canvas

The two complement each other: the Canvas helps you sketch and test the business model quickly. The business plan is the fully written-out long version, backed by numbers. For funding and loans, only the business plan counts. The Canvas is preparatory work, not a document to submit.

When Do You Need a Business Plan?

• When applying for the start-up grant
• For loan applications to the bank and KfW
• For the AVGS coaching application (Activation and Placement Voucher, Aktivierungs- und Vermittlungsgutschein)
• Before meetings with investors
• As an internal strategy guide
• In connection with business registration and funding applications

What Distinguishes a Good Business Plan?

The difference between a plan that convinces and one that is rejected is rarely the wording; it is the substance. Five factors are decisive:

• Realistic financial planning: comprehensible revenue assumptions, complete costs, a clean liquidity plan.
• Clear market definition: who is your target group, who is the competition, what is your concrete advantage?
• Coherent argumentation: a common thread from the idea through the market to the numbers.
• Formatted to be bankable: prepared so that a bank can see the viability within a few minutes.
• Compliant with authorities: matching the requirements of the Employment Agency, the Jobcenter, or the qualified body (fachkundige Stelle).

How Long Should a Business Plan Be?

There is no fixed page count; what matters is the occasion. As a rule of thumb:

Write It Yourself or Have It Created?

Writing it yourself pays off if the plan mainly serves your own orientation and you can invest 40–80 hours. Having it created pays off as soon as funding or a loan is involved, and it is 100% eligible for funding with a written, approved AVGS voucher.

Both have their place. Writing it yourself pays off if you bring basic business knowledge, have enough time (40–80 hours is realistic), and the plan mainly serves your own orientation. That way you get to know your project most thoroughly.

Having it created or supported pays off if funding or financing is involved, that is, a viability certificate (Tragfähigkeitsbescheinigung), the start-up grant, or a bank loan. Here every reliable number counts, and an experienced consultant knows the requirements of the reviewing bodies. With a written, approved AVGS voucher, this support is even 100% eligible for funding.

You can calculate here, without obligation, what the creation costs and how much of it an AVGS voucher covers:

Do you need support?

If you would like help with creating it, or are interested in AVGS coaching, take a look at our consulting services.