First of all, a huge congratulations to you as you are all set to accelerate the next big step for your startup!
The next big step directly highlights writing a "Business Plan" that is considered most vital to the business's health.
It is the stage where you document your business approaches and strategies that will give you the chance to pull lots of opportunities in your basket.
As per statistics, it is found that curating a well-structured business plan increases the startup's growth rate by 30%.
Another interesting fact is that 40% of entrepreneurs are less likely to fail due to their vision and approaches in managing their startups better by creating a business plan.
This article will cover about creating a startup business plan, why it is essential for the business, and how you can apply it at different stages of your business cycle.
So let's get started in creating your own business plan and building your startup to sail through for long.
The article covers the following:
• What is a Business plan, and why is it important?
• What is the business planning cycle of startups?
• What are the important things to mention in a business plan
- A solid headline statement
- The problem you want to address
- The solution you want to offer
- The target market you wish to address
- Take care of the competition around
- The funding and financing step
- Building your sales channel
- Streamlining the marketing activities
- Setting a budget and sales goal
- Milestones that you wish to achieve
- The team associated with you
• What are a few tips for writing an effective Business plan
What is a Business plan, and why is it important?
A business plan is a long and detailed document that outlines your business objectives and strategies, describing your project, what you want to do, and how you are going to do it.
In shorter words, a business plan is a written description of your business future that guides you to start over and manage a variety of functions to manage your startup.
Usually, a business plan is a 15-20 pager document that includes information related to your products, services, marketing strategies, operating strategies, and overall finances.
A business plan helps direct the activities and enables us to perform a number of tasks efficiently. With the help of a business plan, startups can approach investment-seeking entrepreneurs or venture capitalists to convey their vision and raise a considerable amount of funding.
To outline the importance of business plans, the following are the ten reasons that answer your question well.
- A business plan helps articulate your vision into realistic terms, determine and fill the gaps in the strategy.
- By exercising a business plan, you can avoid significant mistakes by purposely addressing the pain points and creating a plan of action.
- A business plan helps to increase the viability and longevity of the business.
- A business plan helps you to set better small-term and long-term objectives and benchmarks.
- A business plan helps you create a guide for the service providers, like consultants, contractors, employees, and freelancers, to refer to the relevant sections and support your startup in the best possible way.
- A business plan helps you to secure your financing through various sources.
- A business plan helps you understand and maintain the market terrain such that you can go way too long.
- A business plan helps you operate the functions more broadly, illuminate the customer trends and preferences, and provide more insights crucial for your business.
- A business plan helps you significantly manage and reduce the level of risk by drawing inferences, projections, and plans such that you can enjoy the most transparent view of the future of your startup.
- Building a business plan assists you in determining the right answers to the most critical business decisions for your startup.
With over 71 % of fast-growing companies and startups focusing on creating their business plans, they are already aiming themselves in the bigger picture by planning to make the right and important decisions.
"A business plan is a road map that increases your chances to travel long distances and decreases the odds of getting lost along the way."
What is the business planning cycle of startups?
The business planning cycle of startups follows a particular set of parts required for the formation and content curation of the business plan.
The business planning cycle can be divided into three primary parts:
- Business concept
- Marketplace concept
- Financial concept
Let's discuss these concepts in brief:
1. In business concept, the startups look forward to discussing and plan about the following:
- Industry
- Business structure
- Product or services that they look forward to launching in the market,
- How they look forward to planning to make the business success
2. In marketplace concept, the startups look forward to discussing and plan about the following:
- Identifying the target marketplace
- Describing and analyzing the potential customers
- Answering questions about customer behavior as who, where they are, and what makes them buy
- Analyzing the competition and competitors
- Creating a brand statement and position
3. In financial concept, the startups look forward to discussing and plan about the following:
- Income and cash flow statement
- Balance sheet and analysis of financial ratios
- Coordinating with an accountant and creating a spreadsheet software program
Accordingly, they can be variations in the business plan depending upon the nature and industry of the business.
Overall, the ultimate purpose of a business plan is to provide a detailed explanation of your plan and express it in words that sound convincing for different purposes.
What are the important things to mention in a business plan?
Business plans tend to have a lot of important things that are critical to starting your business and setting yourself up at the level.
A typical business plan includes detailed information like market analysis, customer segmentation, marketing, cash flow projection, competitive analysis, and overall path towards long-term growth.
Let's discuss the profound insights of the critical things that a startup should mention in the business plan.
The 11 things that every startup needs to include in the first business plan are as follows:
- A solid headline statement
- The problem you want to address
- The solution you want to offer
- The target market you wish to address
- Take care of the competition around
- The funding and financing step
- Building your sales channel
- Streamlining the marketing activities
- Setting a budget and sales goal
- Milestones that you wish to achieve
- The team associated with you
1. A solid headline statement
Introducing and summarizing the unique elements of business in one sentence sounds intimidating at first but plays a crucial role in making the first impression about your business.
Your headline should give a basic overview of the idea that can excite the person reading on hearing about the same.
For example, if you sell cookies, your actual headline should be something like "sugar-free and organic."
You should ensure that the headline statement should be written to solve a customer statement and communicate the critical elements to them.
In that case, you can revise your headline by sharing the purpose of the business and the products or services you are offering.
In addition, you can always find ways to revise the headlines in a more accurate and summarized way that includes our unique business, vision statement, and the value you are offering to the customers.
2. The problem you want to address
The following section that startups should concentrate on addresses the problem statement and generates solutions for each set of problems.
Startups should share how they will attract people such that they become willing to spend money on a particular product or service.
You can also use the section to ask people about their experiences, preferences, and problems. Based on the combined resources, customer reviews, and market trends, you can create a list of the problems worth solving and condense them to address daily issues that real customers face daily.
3. The solution you want to offer
This is the next follow-up step based on the previous point of addressing the problems.
After the startup has noted all the inferences, the next thing is to describe how the product and service is the best solution for the target customer.
For example, if a customer has addressed the problem of fewer varieties of a particular product, your answer should emphasize the variety aspect that can appeal to your customer.
Hence, matching the problem with a specific solution helps to build a startup and offer the "Unique Value Proposition" for your business.
4. The target market you wish to address
Defining the ultimate customers for your brand entirely depends upon the target market you want to serve.
Here, a startup should be very much focused on developing marketing plans and building sales strategies that can be effective in finding the right customers for your brand.
Before you decide to address a target market, it is crucial to take care of these two points
- The number of people interested
- The amount of money they would spend on the particular product or service
It would be best to focus on creating a persona representing the customer who is likely to buy your product and research their behavior to refine your solutions statements.
Moreover, if you wish to utilize only one characteristic to segment your customers, you can deep dive into the demographic segments to focus on the marketing activities.
For example, if your brand deals with the line of party shoes that appeals to women, then you can use this demographic segment to set your target market and use other traits like spending levels, choice of color, or designs.
One thing to note is that the more you learn about the target market, the higher is a chance for you to create the products and services specifically to address your customers' points and create messages that they will look forward to responding to.
5. Take care of the competition around
There is no doubt that your competitors may be at the forefront before you. They might have already created their presence in the market and have captured a good amount of customers with them.
As a startup owner, it is always emphasized to research the competitors that serve the same target market.
You can also group similar competitors and make a note of how they operate and function around.
6. The funding and financing step
Funds act as fuel for business. Because of these funds, the startups are in a position to finance their ideas and convert them into sales.
Apart from the investment that you bring through, it is also important to get a clear idea of what, how, and who your ultimate target groups will be willing to spend money on your business plan.
In addition, if your business plans to bootstrap the startup or grow naturally from the sales revenue, then this information should also be particularly mentioned in the plan.
Since financing and funding is the most crucial part of the business plan, the startup owners are recommended to plan out their options through SMART goals where,
- S stands for the specific dollar amount
- M stands for measurable results
- A Stands for attainable combinations
- R stands for relevant to the growth
- T Stands for the time you need
Going by the SMART process helps you streamline these crucial activities and gives a positive direction towards the process.
7. Building your sales channel
There are multiple sales channels in a startup that you can look forward to opting in for your customers. Accordingly, there are multiple sales processes that a startup builds for their customers.
But as a startup owner, you need to make sure what will assist your customers in exchanging money for your products or services.
For example, whether your product requires you to offer a direct or indirect sales channel for your customers?
Or
If you are dealing with two products, you should opt for two separate sales channels or build in only one.
Based on the answers, you can select the best suitable option and fix your sales channel accordingly, which will help you to generate more revenue and sales.
Also, you get the flexibility to make variations suitable as per time and convenience.
8. Streamlining the marketing activities
The amount of time spent on promotional and advertising activities is directly proportional to the number of new customers who will associate with your startup.
It is because of your marketing activities you can set your ideal target customers by promoting your business through social media, advertisements, magazines, or billboards.
In this world of social media, organic and paid marketing is doing rounds to grab the customers' attention. These have proven to be the most significant marketing asset of all.
For example, a baker can use advertisements to promote his cakes and cookies with its target audience and thrive by the relevant foot traffic.
9. Setting a budget and sales goal
As already mentioned previously, financing is the lifeblood of the business. It is extremely a daunting exercise for startups to plan their budget and the goals they wish to achieve.
This component is a process in itself where you decide on the following
- Identifying the major revenue streams
- Listing the expenses that you anticipate plan for the upcoming year
- Milestones that you wish to achieve
Once you get the framework of these points, you have the opportunity to create a financial forecast for your startup based on predicted numbers and calculations.
Moreover, it also gives you the transparency to revise the section and set the financial vision that you wish to fulfill in the future.
10. Milestones that you wish to achieve
Setting milestones paves the way to achieving more milestones in the future. This section should mention at least 3-5 critical events you plan to organize in the coming year.
The milestones can include launch dates, funding events, or hire.
It is recommended to share an estimated date for each of these events to keep track of the activities and plan your year accordingly.
11. The team associated with you
The startup not only belongs to the entrepreneur but also belongs to the people associated with the same.
By people, we mean the investors, partners, and employees associated with you in bringing your business to the market.
The team's right set helps you solidify your vision and highlights the commitment that you look forward to processing with them.
This section should include the name of the business partners and the employees working with you and indicate their respective roles with the startup.
And that is all!
This is the definitive list of things that a startup must include in its first business plan.
Of course, you have the flexibility to make different sets of combinations and add different elements to your business plan, but make sure that it covers all the eleven points mentioned above.
What are a few tips for writing an effective Business plan?
To write an effective business plan, you need to scribble down your ideas in detail.
Since its documentation of your entire business structure, the following are six tips you can consider in writing an effective business plan:
- Create different sections in brief and include all the major information
- Proofread each section by self or seek review from consultants, mentors, or family.
- Make a note of the points highlighted auto question asked
- Revise the notes to answer the questions
- A different set of innovative points that you might have for startup
- Keep on revisiting and revising the business plan
Conclusion
Curating a business plan is a crucial part of the whole startup journey that assists the business to grow and evolve along with other businesses.
You can't imagine the level of places you can move forward by creating your business plan and fulfilling your vision and mission statement.
As a startup owner, you should definitely focus on creating a business plan that helps you lay out your goals, update and track the progress for the longevity and success of your business.
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Key Takeaways
Well, now you're officially set to headway in curating the first business plan for your startup!
It's your time to get started with the actual work that your startup demands from you.
Following are the key takeaways of the article:
- A business plan is a long and detailed document that outlines the business objectives and strategies. It describes the plan, what you want to do, and how you will do it.
- A business plan is a 15 to 20 page document that includes products, services, marketing strategies, operating strategies, and finances.
- A business plan is important for startups because it helps articulate the vision in realistic terms and manage the level of risk by drawing inferences and projections.
- The devices planning cycle of startups follows a particular set of parts required both for the formation and duration of the business plan.
- The business planning cycle is divided into three parts: business, marketplace, and financial.
- Business plans tend to have a lot of important things that are critical to kickstart and set your business in the market.
- The 11 things that every startup needs to include in the first business plan.
- A solid headline statement
- The problem you want to address
- The solution you want to offer
- The target market you wish to address
- Take care of the competition around.
- The funding and financing step
- Building your sales channel
- Streamlining the marketing activities
- Setting a budget and sales goal
- Milestones that you wish to achieve
- The team associated with you
- There are a set of 6 tips that you can follow to write an effective business plan.
- The tips include creating different sections in brief, proofreading, revising, and revisiting the business plans
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Janhavi Wagh
Deskera Content Team
Deskera Content Team
Deskera Content Team
