The product business plan – more than a necessary evil

Why a product business plan at all?

A product business plan is more than just a formal requirement; it is a crucial tool that can influence the success or failure of a product venture. In this article, we will take a closer look at why a product business plan is considered essential.

Reasons for a product business plan

1. Strategic orientation

As a strategy tool, the product business plan forces us to clearly define our ideas and goals. This process enables a more precise strategic orientation. By taking a close look at questions such as the target group, the unique selling point of our product and our positioning on the market, we lay the foundations for a well thought-out and successful business strategy.

2. Resource optimisation

The business plan enables us to better plan and optimise resources. Whether it’s financial resources, employee resources or time – precise planning in advance prevents unnecessary waste and ensures that the available resources are utilised efficiently.

3. Market and customer analysis

Market analysis is an essential part of our product business plan. It not only helps us to understand current market trends and the problems and needs of our customers, but also to identify potential competition. By identifying the strengths and weaknesses of our competitors, we can position our product in a targeted manner in order to gain a clear competitive advantage.

4. Financial planning and risk management

Financial planning is another critical aspect of our strategy document. Here we consider not only investment costs, but also revenue expectations, break-even analyses and long-term financial forecasts. This enables a realistic assessment of the financial requirements and helps to recognise and manage risks at an early stage.

5. Communication with investors and decision-makers

Investors and decision-makers often require a convincing business plan before they invest in our product. A well-structured product business plan serves as a convincing document that emphasises the viability of our business idea and strengthens the confidence of potential stakeholders. Once approved, a product business plan can later act as a cover letter, presenting not only the facts and figures, but also expressing the personality, values and vision of the product venture. It is therefore an important communication tool to win over the necessary stakeholders in the company for the realisation of the product project.

The quintessence of strategic PM work

To summarise, a product business plan is not just an administrative formality, but an indispensable tool for the success of your product on the market. From strategic orientation and resource optimisation to communication with decision-makers, the business plan plays a decisive role in the development and implementation of a successful product idea and for constant market success. If you approach this step carefully, you will lay the foundation for a sustainable and successful entrepreneurial future.

Create the necessary freedom. Mercilessly reserve the necessary time slot in your diary. 1 day a week for strategic work. Then you can devote yourself continuously to strategic questions about your product. Ideally in the form of a product business plan. It is the quintessence of strategic PM work and brings together all the key information from the market analysis and product strategy in one document.

20% of working time is the minimum for strategy work

How much time should be spent on operational and strategic PM work often depends very much on the current life cycle phase of the product. During an upcoming launch, as a PM I am of course very busy as a ‘launch project manager’ and therefore mainly operational. So it can fluctuate a lot. Nevertheless, you can use the following as a guideline: 20% of your own time should be reserved for strategic work. That’s 1 day per week (!). Doesn’t sound like that much, does it? But practice shows: PM’s are often very far from this guideline. With corresponding consequences: Sawing with a blunt saw is extremely strenuous and you hardly make any progress.

Turn the tide ! The best day for this is today

You demonstrate this to yourself and to all other stakeholders and decision-makers: You are the product market expert, you are the strategist! You turn the tide from ‘reactive’ to ‘proactive’. In this way, you sharpen your saw sustainably and, step by step, a considerable number of operational issues resolve themselves. Your confidence and therefore persuasiveness as a strategic product manager will increase noticeably and then you will have the reins in your hands. This is not only beneficial for your company, but also feels ‘really cool’ for you (quote from a PM). The best day to start is today!