The core of every business concept is a clear and structured description of the product or service, along with a distinct articulation of the customer benefit. Clarify how your product or service differs from those already offered on the market. Address the current stage of development and describe the necessary next steps.

Product Description

The readers of the business plan first want to get to know and understand the product/service. Make it as easy as possible for them through a clear, structured, and comprehensible presentation. Pay particular attention to the innovative features that distinguish your product or service from those of other relevant providers (unique selling propositions / USPs). You should also compare the strengths and weaknesses of your product/service with those of existing competitor products. What matters most are the advantages that will enable you to prevail against competitors in the market. A unique selling proposition is thus a unique competitive advantage that sets your product apart from those of competitors: a unique product innovation, a unique product benefit, or a unique product performance.

Customer Benefit – Looking at Your Offer Through the Eyes of Potential Customers

However, the key to success lies not only in unique products and services, but in satisfied customers. It is therefore imperative to place the needs of buyers at the center of your thinking and actions from the very beginning and at all times. Customers will only purchase the product or service if it offers them a long-term benefit. With your offering, you solve a problem for your customers or provide them with an advantage. This benefit must be greater for buyers than the benefit derived from purchasing a competitor's product or foregoing the purchase altogether. To achieve this, it is mandatory that you understand the needs, desires, and pain points of potential customers.

It is therefore not only important that the offer has value from your perspective, but that you can sharply define it so that both investors and buyers can recognize it at a glance. Describe the customer needs or the problem you aim to solve with your product or service from the customer’s viewpoint, and emphasize the specific value it delivers to them.

From the customer's perspective, they do not buy a product defined by technical specifications; rather, they buy an information edge, workload reduction, time savings, technological pioneering, quality improvements, cost savings, lifestyle, status symbols, individuality, or peace of mind.

They do not buy a device that executes a certain number of tasks per unit of time; they buy a device that saves them 25 percent of their time and 15 percent of their costs. A low product price alone is not to be understood as customer value. Or, if customers find it worthwhile, a product that places less burden on the environment while delivering identical performance.

To be able to offer specific solutions to buyers, you must naturally know what your customers actually want. Do not make the mistake of answering this question yourself; instead, gather insights directly from the ground level and ask what your offering needs to look like for them to buy it.

Target Groups

Generally, the potential customers you intend to address with your product/service are called “target groups”.

You can derive your target groups directly from the description of the customer benefit, as not everyone will benefit from your offering to the same extent. Defining your target groups forms the basis for your market analysis and marketing strategy. In this chapter, you begin by broadly narrowing down the target groups you aim to address. Try to focus on those potential customer segments that will derive an exceptionally high benefit from your product or service and from which you expect a strong response. In principle, your target groups should be characterized by being willing to pay and sufficiently large to allow you to generate adequate revenue. Your target groups should be delineated such that they are addressed by as few competitors as possible.

Stakeholders / Interest Groups

In addition to target groups, define the stakeholders who are affected by your business decisions. Every company should consider employees and customers, but who else is involved? Stakeholder expectations regarding transparency and participation are growing. The corporate culture should reflect this societal trend - for the benefit of the environment and society, but above all to protect the business model.

Development Status

The description of the development status is of critical importance to investors. The information provided here allows conclusions to be drawn regarding the risk of your venture. Explain the stage of development your product or service has reached on the path to market readiness. If a prototype exists, you should mention this explicitly. Where applicable, also address pilot customers who are already using your product or service.

Risks that can impact the implementation of your idea include imitation by competitors and, where applicable, regulatory requirements (certifications, permits, approvals, etc.) that your product or service must satisfy (e.g., TÜV, health authorities, etc.). Make sure to specify which permits and approvals need to be obtained, are already in place, or have been applied for. If you need to acquire licenses to bring your offering to market, you should address this as well. Furthermore, describe what constitutes the innovation of the product or service, what competitive edge you hold over competitors, and how you can protect yourself and your advantage. Also detail any patents, utility models, or registered designs that have been granted or applied for.

Guiding Questions

Product Description

• What is your product / service (software for…, device for…, service that…)?
• What competitor products / services already exist?
• What unique selling proposition (USP) sets your offering apart from competitor offerings?
• What is sustainable about your product or service and/or its production process?

Customer Benefit and Target Groups

• What problem or need do your customers have?
• What specific benefit does your offering provide from the customer’s perspective?
• Which target group(s) (potential customers) can you reach with your product / service?
• What is your potential customers’ stance on sustainability (LOHAS, willingness to pay, status awareness)?

Development Status

• At what stage of development is your product / service currently?
• What development milestones do you have planned?
• Does a prototype exist?
• What development costs do you anticipate?
• In which areas might you encounter development risks, and how will you resolve these issues?
• What is the current state of the art? What is the development status of your competitors (as far as known)?
• Which permits and regulatory approvals are required to bring your product / service to market?
• How are you protecting your innovation?
• How will you maintain your innovative edge over competitors?
• Do you consider sustainability aspects across all stages of production (suppliers, manufacturing, delivery)?
• To what extent is sustainability already a topic within your competitive environment?
• What specific opportunities and risks arise for you by incorporating sustainability aspects?