Startup Business Plan Guide
A business plan acts as a compass helping you to navigate through the uncharted territory. It outlines the goals of your startup and how you plan to achieve them?including the milestones to track tasks and what will be your strategy to combat the risk-laden journey of entrepreneurship.
Why write a business plan?
A business plan is one of the best tools for making effective decisions, starting the business and eventually making the business successful.
Which business plans to choose?
Not every business needs a minute, and the same level of details and not everyone is the same. A business plan gives a founder a chance to step back from the normal flow and look for ways and methods to develop, innovate and improve the business. Ultimately the planning process helps the founder understand the business better and helps the founder define and optimise the business on one’s own terms, moderated by the reality of market potential and competition. For instance, a craftsman makes toys at home during the week and sells it at the flea market on weekends, if the craftsmen plans the business it might give him a chance to understand his customer needs better and develop ways through which he could maximize profit and output. He may not be required to make a detailed cash flow, balance sheet, etc. A simple plan, which directs the business and gets to what he needs to get going, will be sufficient in this case. By seeing your business through the lens of the business plan, you get to analyse more aspects of your business, which hitherto would have been missed. A plan destined to the desk of a top investment banker will have high degree of polish where as a plan for strategic internal planning will have casual language and may not have visual polish.
There are three kinds of Business plans:
The one-page business plan
It serves two purposes; firstly it is used as a tool for business insiders and provides a better approach to the investors in the first meeting. It is great for early stage startups where the founders sketch out the broad strokes of their ideas. It gives a quick glance of the entire business concept.
The Internal business plan
It is used for strategic business planning. These are the management tools that help the founders measure their day-to-day progress towards to the set goals. The internal business plan skips the startup history and management team, as everyone in the firm knows about them. It has detailed departmental budgets and key milestones each segment is planning to hit in the coming two ? three years.
The standard business?
The external business plan is also known as the standard business plan; it is designed to be read by the investors and to provide all vitals. Unlike the internal business plan, which is short on polish and formality, the external business plan is well presented. External plans include the background, experience of the key team members, market size and potential, and your go to market plan, key milestones and the quantum of money you plan to raise.
What to include in your business plan?
The formal business plan document includes an executive summary, company overview, products and services rendered, metrics, milestones, sales plan and target market, financial plan, the management team. Lets look at some of them.
It includes the core elements required to grow the business plan organically, it the startup?s calling card, herein provide a brief summary of your idea, and why it warrants the investor?s attention, it has to be precise and punchy. The most important part of this piece is defining the problem you intend to solve by launching your startup. If you fail to incite attention in part, there are high chances that your plan will be in trash can.
How large is your market? Is it growing? Is your market filled with repeat customers? Are their emerging opportunities within that market? By addressing these questions in your business plan, you will not only give yourself and investors an idea of what you are looking at for future sustainability and growth, things that will be key to your business’s success.
Target market/ target audience
Your startup is solving a real life problem in the real world it is important to provide details about who your target audience is and whom you are selling to. Understanding the target audience helps in building better marketing campaigns. Explain target customers? needs and problems, and state how you?ll answer to them.
Include the things that your competitors have to their advantage in your business plan, elucidate how you are different or how you have an edge over these already-established businesses. This will show your investors that you have a realistic head on your shoulders and are able to look at the global scenario.
Value proposition and product presentation
A value proposition consists of benefits, which a vendor promises a customer will receive in return for the customer’s associated payment. Herein detail you intend to develop your product, map the proposed features to the development lifecycle of your product.
In this section, present the startup team and its members and how each one of them contributes to the business or is best suited for their role in the startup. Avoid filling in part-timers and too many advisors as it gives a signal that these people don?t have conviction in your idea, and that?s why they are not on board.
The sales plan includes the detailed strategies you can use to reach out to reach you, consumers. It also gives an overview on how the startup will price the product, promote offerings and have the sales process in place.
A financial plan contains the following:
– Sales forecast
– Market analysis
– Balance sheet
– Cash flow statement
– Personnel plan
– Cash flow statement
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It helps in seeking funding, a solid financial plan also helps in figuring out how much capital and funding your startup requires. In the long run it also determines how and when to hire new employees, or when is the right time to buy new assets or to expand the startup. At the end of the day the business plan gives in depth understanding of what is necessary for a venture to ensure its success. Keep in mind that, a business plan cannot predict the future of the business; it only gives logical forecasts and projections that if?a particular scenario occurs then the growth and the output of the business would be so on.
The significant stages or events in the development of your Startup and how would you keep a track of your journey; the key is to define the metrics which will measure your progress.
Few key points to keep in mind while writing the business plan
Effective writing is very necessary for writing a good and summarized business plan. The points summed up below are to be kept in mind while going about your business plan:
– avoid using complicated sentences, short sentences are easier to read and crisp.
-? don?t hesitate to give brief explanations where it is required.
The average length of a business plan is of about 20-30 pages of text including market projections, flowcharts, and management resumes. Including graphics like blueprints, logos, product shots in your business plan can add real value. You can use multidimensional figures like pie charts, stacked bars, bar charts to show various things like market shares, market segments, net profits, sales.
Apps can help you
With the advent of technology, there are Apps, cut down on the effort required in writing the business plan for the startup. These apps simplify the tedious and complicated task of crafting an investor ready business plan.
This application helps in building a single customized business plan in a PDF formatted file. It works on the basis of the data entered and automatically generates the things like the balance sheet, the cash flow, profit and loss and other metrics. It will be helpful if you intend to create a traditional business plan.
This app not only helps the end user to organize the business plan but also helps the in backing the business plan fast and enables to plan your business at an extremely detailed level for your investor presentation.
It is a strategic-planning app that helps the founders with the decision-making and the thinking part of the business plan. The more fees you pay, the more advanced business plan options you can access. The app develops a detailed business summary including revenue projection and charts.
The business plan is like a GPS on the road to success, and the most important aspect of the business plan is that it provides a growth engine to schedule a monthly review, portray a clearer picture of the overall strategy to the founders and investors.