How do entrepreneurs create business plan if their service or product is totally new in the market?

You will need to showing the logic and some data (research results) on how you came to the conclusions that there is a market for your offering. Why would consumer want you.

Also there is a chart that shows the consumer market per product or service which are relevant, simlar and may possibly be used as an alternative to your offering. In simple terms, you can use lateral thinking process to come up with these items. e.g. People are on the move, they use telephones to communicate, so here comes in the Mobile phone. Later it evolves to a mobile phone that allows listening to music due to the the existence of the market for music players.

The second part shows how you want your company to evolve, don't worry you don't need to know it right it. But be ready to adapt to the market changes down the line.

For new startup business, the entrepreneur have to develop their business plan based on known facts and figures, supported by research and statistics if possible.  They can make assumptions in some cases, but they have to be reasonable assumptions and better get them verified down the road.

Business plans may also incorporate three types of business scenarios;  (1) the optimistic scenario where performance and results can be at their best, (2) the pessimistic scenario where performance and results can be at their worst, and (3) the most-likely scenarios which will be closer to reality anyway.

For every scenario, there will be certain conditions that have to happen, assumptions that need to turn ture, and certain developments that may or may not happen, and maybe within or outside direct control of the business plan owners

Hope this is of help to you

all the best !

Mohammad Thiab! I agree with you, business plans may incorporate three types of business scenarios. the optimistic, pessimistic or most likely scenarions. We must work on all of these. In my view success rate can be increased if all of these scenarios are worked keeping in view the ground realities and facts, rather than just working on the office table.

Regards