A Step-by-Step Explanation of Writing a Great Business Plan For Startups.
It all starts with an idea; yes, someone has rightly quoted. The business idea is put into a document, and an execution plan is made ready. This document is referred to as a business plan. If you are a startupper and do not know how to navigate your business plan and what elements are included in it, this blog is for you. This blog discusses the preparation of a robust startup business plan and how it lays the foundation for your new venture.
A business plan is a document that outlines the business scope, goals, and timelines for various activities. It is specially designed to help new entrepreneurs and startups to establish a roadmap and pursue the decided business projections. A business plan helps you in exploring the business opportunities which you otherwise might not have known. Kody Technolab encourages every entrepreneur as well as newbie clients who approach us with a unique app idea first to write a business plan for your startup.
The only strong reasons why we ensure that they write a startup business plan are;
– A business plan will give them a blueprint of the journey and assist in decision making. It will keep you up-to-date with the product progress, and you can do more strategic planning. You can know when to hire new employees and what are the targets to achieve the milestones;
– It will set up a step-by-step action plan for the development team and the business;
– A business plan will help in brainstorming new ideas for implementation;
– It will help you in knowing your business better so that you can pitch it to the investors. You can gain fundings if you can convincingly project your business idea.
– A business plan increases your chances of success by 16%. Since it sets up a baseline, you can keep track of the progress and concentrate solely on the business growth.
– It also gives you room to check the feasibility of the project.
Now that you know how you will benefit from writing a startup business plan, let’s answer the question, “how to draft a business plan?”.
A business plan follows a specific structure having segments. Each of these segments has its own importance. Let us first look at the various sections included in a business plan.
- Executive summary;
- Company description;
- Marketing Plan;
- Financial projections;
- Team structure;
Note: You may sit with a pen & paper and start jotting down the points. By the end of this article, you never know you would already have your startup business plan in your hands or at least your business template.
Moving ahead, let’s dig into the details of each section and start writing your business plan.
Just like any other document, a business plan begins with an introduction. This introduction shows the reader who you are and what you do. An executive summary is the first thing that will be noticed and grab the reader’s attention.
The subsection of the executive summary includes the following.
This section needs to be short yet informative. It should let the readers know about your plan and its execution.
In this section, you need to describe your target market and how you plan to solve their problems. Firstly, inquire about the customer’s problem and cite them in your document. Next, describe how your business will help them overcome the challenge.
You believe that your business idea will stand out, but do you know who your competitors are? The next step is to describe your potential competitors, their services, value, and quality with which you want to compete.
Financial projections are an important part of the business plan. Define what you aspire to achieve with your business and what are the specific milestones. Also, include what profits you will make, the cash flow, and the return on investment.
A fine-tuned business plan with financial projections can attract more investors on board.
This team defines the roles and responsibilities of the members involved in the project. Who will be working on what and what job would they complete? Everything is described here. Also, what is the identity factor of each team and what do they lack should also be mentioned in the document.
This is a critical document section of a business plan. In this section, you will mention the amount of money you need to put your idea into action. The fund section would let investors know how much money you need to accomplish a particular milestone or a project in total.
While writing this section, you need to assume that the reader knows nothing about the company. Describe where you hail from, what the company aims at, and what is the USP of your business when you will enter the market.
Create a story around your business, and let readers know how you landed upon this business idea. Do not forget to include where your company is located and if it is yet not decided, give a prospective address where you plan to launch your business.
Company description will also include your business type as in, specific area or industry in which your business will be functional.
Company description has a sub-section where the entire team and its involvement is also covered.
The company description section says a lot about your future. It is important that you mention whether the company set up is going to be an LLC, LLP, C-Corp, or S-Corp.
Next, you have got a few lines to describe your mission and goals. Do not hesitate to reveal everything that you’ve got by writing creatively.
You would be super excited with your project idea, but the same should be reflected in your business plan. A marketing plan in your business plan should reflect the competitive advantage you have and how you plan to reach out to a maximum number of customers.
A subsection of the plan includes,
Target audience analysis:
Do you agree with the thought: You are nothing without your audience. And hence, you need to describe your audience who is willing to use your services. This may give you a broader spectrum of the audience, but you can narrow it down based on gender, age, occupation, income, education, and other criteria.
Based on the list, you can send a survey form to your prospective target audience. You can plan to send them an email or physically visit them. Fill out the required questionnaire so that you can serve them in a better way.
Second, if you have identified your competitors, you can try and target their audience too—research thoroughly about your competitors’ audience and what services they like.
Competitor analysis is vital for your business. The first step to perform this is to find your competitors. Pen down the popular names that are already performing well and dig deep into their analytics.
Check out their pricing strategy and how much profit they make over each offering. Also, find out where do they get their organic visitors from, what are the platforms they market upon, etc. All these answers will give you a better understanding of the market trend and what your performance benchmarks should be.
You can also categorize them into categories such as primary competitors, secondary competitors, and tertiary competitors.
SWOT is an abbreviation for Strength, Weakness, Opportunities, and Threats. You can define each of the sections or take an expert’s help to perform a SWOT analysis.
A financial plan is the backbone of your business plan. You can attract no investors if you do not show your financial projections. A financial plan should not be a haywire or inaccurate document. It should be specific, at least not in terms of exact numbers, but the resources and the cost involved in buying and selling of resources.
An important part of financial planning is showing your balance sheet. In this section, you need to describe how much funds and resources you have and how much more you will need to reach your goal.
The next important step is to define your expense projections. Be as much transparent as you can be to show the business financials to the investors. A financial plan will also include the cash flow, meaning the incoming and outgoing funds for an activity.
In this section, you will define the hierarchy of the team. Names and roles of management team members, list of board members, other team members involved in the mobile app development process, marketing, testing, etc.
In this section, you will also address the team gaps and how the same can be bridged.
What are some go-to tips for writing a great business plan?
Now that you know what all things will conclude your business plan, here are some quick tips to give it a finishing touch.
1. Keep it short:
A business plan isn’t a lean canvas model (a one-page document), but yes, it would be great to keep it short. Straight to the point and crisp is what we expect a business plan to be. It is a replica of your business journey and growth; henceforth, a business plan should be written in simple plain language that doesn’t confuse anybody.
2. Address your audience:
The main objective of writing a business plan for a startup is to capture the reader’s attention in whatever way you can. Do not include redundant details; instead, cover important specifics which will interest the readers.
3. Don’t be intimidated:
There is a long ladder that you have to climb before achieving success. It is not a one-man play nor a one-day journey. You may fall short initially, but don’t be scared. All big giants might have failed in one or the other aspect before reaching this far.
4. Use facts & maintain the structure:
A business plan is used to convey your idea and pitch to the investors. If you play around with the idea without coming to the target, you may lose the investor’s interest. Be fact-driven and try to go with the flow of the business plan.
So here comes the end to the writing tips of a business plan. But wait, have you outlined yours by now? We are happy to help you with this aspect. Designing a business plan is a long and complex process, but it is important that you do not miss out on this. All the best for your new venture!