The beginning of all the startups is the original concept. If this article aroused your interest, there’s a possibility that you already have it. The most efficient way to successfully realize it is by writing a business plan. Due to Harvard’s research, the business plan of the future startup increases by 16%. Furthermore, 71% of the thriving modern companies have a properly described business plan.
This article will guide you in making up a proper, detailed business plan.
Peculiarities and Benefits of a Business Plan:
The advantages of the business plan allow you to:
- Structure the issue and find the best solution
- Test the potential of the concept and detect the points to improve
- Develop new ideas and prove their perspectives to investors
A well-structured business plan has to include:
- Executive summary
- Company specification
- Financial planning
- Team structure
This section is a presentation for the whole business plan, sparks readers’ interest, and describes the concept briefly.
It may incorporate the following points:
A laconic section, which has to comprise the startup’s plans and offers.
This part states the objective market, the detailed description of issues that your product will solve, and why it is worth attention.
The characterization of your possible rivals. It will help you to develop ideas on how to make your product outstanding and extraordinary.
Specification of the project’s aims and milestones. Use graphics to project your financial settlement for various periods. Mention sales, income, and ROI (Return on investment) to clarify these points for investors.
Introduction of your team to investors. You have to describe each member’s expertise, skills, and experience and mention your project’s partners if you have them.
This point has to consist of calculations for a budget required to start the development of your project.
Hints for a successful executive summary:
- Compose it at the end
You should complete calculations and research for the business plan before introducing it, so you should primarily accomplish other points to proceed to this part.
- Make it engaging
Avoid adding unnecessary information and include truly significant points.
- Stick to structure
Well-structured information will make your executive summary readable and will keep the attention till the end.
- Include exit strategy
It’s meaningful information for investors. It should describe an ownership takeover after running technical due diligence, share selling, or EBO (employee buyout).
- Convincing arguments
To motivate the investor to cooperate with you, use real reasons, describe your aspirations and perspectives, including market valuation with your projected share in it.
- Avoid banalities
Get rid of any hackneyed phrases regarding your team’s eagerness and dedication. Another bad idea is not using facts and yarning about how your startup will turn the world. Investors are tired of these cliches.
The sense of this part lies in a narrative of a concept, its aims, business plan, team structure. Nonetheless, it has to be the shortest section, since it delineates exceptionally vital info about the project’s original idea and mission.
This section varies due to your company’s current stage. If you are an established company, tell your company’s prehistory, founding, and previous projects. For startups, it may include initiators of the concept.
Add your businesses’ physical placement or the future planned location and time of staying there. Don’t forget to mention a home office in case you have it.
Specify your field: healthcare/education/travel/etc. This section predisposes a detailed description, so you may classify your industry and present your product.
Organization and staff
Introduce each worker, his proficiency, participation, and job in the company’s development. Furthermore, it’s a brilliant opportunity to give some extra information about yourself.
Legal structure and ownership
State your form of business to determine your taxation model:
LLC/C-Corp/S-Cord/Sole proprietor/in partnership.
What’s more, mention the owner of the company and define technical co-founder equity.
Targets and tenets
Try to be original and declare the aims of your company in a couple of sentences.
This indispensable part allows you to claim the benefits of your business, define a specific niche and develop the strategy.
You may split the marketing plan into three sections:
- Target audience research
- Rivals’ research
- SWOT analysis
Researching the target audience
This information will help you to make your products/services relevant.
To begin with, describe a portrait of your customer by using the main characteristics.
To illustrate, you want to launch an online platform to sell car parts in the US, West Coast. You may receive the following results:
- Age 16-60
- Dwelling in Los Angeles, CA
- Secondary education
- Revenue: $60.000-$75.000
- Drivers, service stations workers
The next level is analyzing the audience deeper:
Carry out surveys
Gather a focus group (online/in-person) and run surveys regarding their wishes, needs, preferences, and tastes in your business field. The results will help you to meet customers’ requirements.
Research the audience of rivals
An already obtained audience of your competitors will help you realize why their products/services are in use.
Explore rivals’ marketing channels, websites, and social media accounts to detect their weak spots.
A buyer persona is a detailed characteristic of your target audience and the final stage of the analysis mentioned above.
Complete the following investigation to enhance your own business significantly:
- Analyze successful companies from your niche
Make a list of the successful rivals in your field. Then, analyze their social media accounts and reviews.
- Do the deep research
Points to explore:
- Cost. Study the price-current to form the price for your product.
- Traffic. Indicate the traffic statistics from Google search to understand how popular your competitors are. Ahrefs, SimilarWeb, and Alexa are helpful for this.
- Social media activity. Analyze the productivity of your competitors by checking their reviews, follower statistics, and mentions on social media with the help of Followerwonk, Social Search, and Sprout Social.
- Market terms. To find competitive, experienced projects in your field, you may find the domain registration date, server statistics, and the data from WHOis.net.
- Rank the rivals
For the more accessible following, you may divide your rivals into three ranks by a competitiveness gradation:
- Primary rivals. Your target audience is mutual.
- >Secondary rivals. They supply better or worse service, similar to yours.
- Tertiary rivals. You are connected only by implication.
It will help to define the following crucial moments:
Peculiarities, which make your project stand out from the crowd.
Disadvantages that hinder business development.
Aspects for your project evolvement.
These are threats that may influence your business independently of your decisions.
This research is extremely useful, so you may find its template to recreate your own effectively.
In brief, this plan describes the projected income and outgoings to develop your project. To calculate clarified targets of the company correctly, mention such points:
It states your current budget for the project. In case you are in search of funds, you may calculate your planned financial status.
This part allows clarifying your future spendings by splitting them into fixed and recurring costs. Simply put, you should list how and how much money you will spend.
You should clarify the planned earnings based on projected sales.
Cash flow projections
Lastly, all the income and spendings should be projected and mentioned. This way, the remaining balance is formed for diverse periods.
How to develop a Financial Plan
This guide will help you to make up this indispensable part of a business plan easily.
Business and financial plans
Both of these plans cannot exist without each other. Therefore, the calculations in the financial plan should accompany all the objectives. For instance, you are planning a release date and incorporate all the expenses for this period.
Plain financial assumptions
Investors’ main interest lies in observing the cash flow, your clear vision of these projections, and your expertise in financial management.
Assemble historical financial information, annual economic statistics, analysis of rivals and market, etc., to affirm all the financial assumptions.
Be positive, still, lifelike
An integral part of success is a positive mindset. Avoid only hoping, show the startup to the investor as a financially profitable project.
Don’t neglect using them. There are successful readymade examples containing lots of utility information. For instance, the one from 150 Startups.
Investors may get acquainted with your workers ranked by hierarchy:
Tell about the managers of your company, their job, their skills, and their experience. Moreover, it shows the company’s trustworthiness and reliability.
If you are missing particular specialists, you should note how to overcome this obstacle by stating the required experts, their demanded proficiency, experience, and duties.
You should define major managers, who are responsible for the efficient organization functioning.
Now you have all the essential skills, knowledge, tools, and information to develop your startups’ business plan. Templates are beneficial, you should adapt them to your project due to the fact that there’s no universal example. Keep the plan rather pliable, like the successful evidence- Shopify, which meets all the requirements mentioned above.