In this article, you will get a close look at how to create a startup business plan. What you must include in the business plan? Why is a business plan essential and indeed a lot more? These days properly documented business planning is the way to succeed for startup companies.
If you have been thinking of launching your own start-up business with a great business idea for a long time and now you have finally decided to do it, then, the first step you would need to take is to construct your business plan. The startup business plan will help you put all your thoughts related to your business on paper so that you can have a clear vision of what your business will look like. Please consider that a business cannot function without effective business planning.
It is just that a business plan is there to provide you with clarity when you feel lost in your business. You can use it to calculate facts and figures for the effective functioning of your business. So instead of straying off from your goal in business or worse starting over from scratch, it is a wise decision to construct a business plan beforehand.
Let’s start the discussion on the startup business plan. This is a quite straightforward term – a plan for how your business will be going to work. ‘Startup Business Plan’ seems an easy term, but it is not exactly like that as this is a bit complicated.
There are various types of business plans which can be used for both emerging & well-established businesses. This is the base that outlines a business’ aims for the future and gives you a clear view of how to achieve them.
Writing the perfect document that helps to create a roadmap for business success. You will also focus on areas like finances, operational issues, as well as marketing. If you want to make a strategic plan, then you must have a deep understanding of your business aims, an overview of the market on which you are focusing & keep in mind the challenges or opportunities that will come your way.
Every startup business plan may vary in length, scope, as well as details that depend on the situation for which you are going to use it. But most of the business plans are similar as they have to cover the same key areas, no matter if they are long or short.
Why Is There A Need For A Business Plan?
The Definition of Startup Business Plan.
A startup business plan is a document that shows details about the objectives and goals of the startup, and that also covers the operational, marketing, and financial strategies of the startup. It can be shown to the investors and venture capitalists for investments.
A business plan is important for various reasons. If you are a young entrepreneur and want to start a new startup you need to create a strategic plan for venture capital firms for funding. It is always a great idea to have a sense of direction before starting your business. This sense of direction is provided by a business plan. Below, there are various reasons mentioned why a business plan is important for your business:
It helps to make the finest decisions
A business plan is important for you to ask yourself all the right questions, albeit hard ones, to get you on the right track. Such questions may require you to reflect upon your business goals and where you expect your business to be in the coming years. It will allow you to set a period in which you will have to achieve the required goals to be on the right track. Other than this, this approach will also help you to keep track of the difficulties that you may face in your business.
This way you can think of insightful and well-researched ways in which you can tackle the problems of your business.
If you will write an action plan, it helps you to define, and focus on business strategies and innovative ideas. It will not only include the financial matter information, but it also helps in management, planning, technology, marketing, & even how you may create value for the customers. A well-written planning document helps you to grow your business which also decides the future of your business.
You will be able to identify strengths, weaknesses, opportunities, & challenges
By creating a business plan, you can identify potential weaknesses in your ideas. Professional business plan writers provide you with amazing advice that will help you to make the best decisions. If you want to know more about why every business needs a plan and get the best business plan, all you need is to connect with the professionals.
Increasing your business’s chances of success
A business plan will aid you in the long run by providing you with solutions to the problems that most new start-up businesses face in their initial years. These problems include few customers, lack of capital, wrong pricing strategy, and severe competition. Therefore, a business plan will help you forecast the problems before they arise and you can think of probable solutions to all the problems that you may encounter soon.
A business plan helps to increase capital
Any business needs to be secure financially and not run into a financial crisis in the near future. This is where the business plans come in. They help you list down all the possible ways that you can adopt to secure financial funding. Whether it is pitching to venture capitalists, or viewing the option of taking a loan from a bank, a business plan is a good way to start. It is because whoever is going to be lending you money needs to be assured that your business is worth investing in. Therefore, you need a Balance transfer plan from an efficient lending network.
It is one of the important points that help to increase capital. For this, you must create a well-written & detailed business plan for funding via investment. All you should do is to provide a complete description of what is your business- to the professionals. To raise money for your business, give investors access to a comprehensive business plan that provides them with a clear idea of your business.
To narrow down the risk factor
As mentioned above as well, a business plan is a good way to reduce the risk factor in any business. Any difficulty or obstacle becomes much more manageable when you have a business plan sitting right in front of you. You can crunch the numbers and use appropriate logic to better understand the problem and find the right solution for it. Having a business plan up your sleeve will aid you in making better decisions for your business and leaving less up to chance.
To hold the objectives and goals of your business
Including the objectives and goals of your business as well as the probable ways to achieve them is a must for a business plan. Therefore, a business plan is great for your team as well who might need answers at times when you are not available. They will know that they have a business plan to turn to in case of any doubt. A business plan can also be considered as a guidebook for your employees to align their priorities with the betterment of your business.
Tips for Startup Business Plan
There are many templates available online to aid you in writing a business plan. However, this does not mean that you have to go with any particular one and fill in all the sections it has been prescribed in the templates. Just as your business is different from others, your business plan will also need to stand apart from the rest and must be made in a way that is best suited to your needs. Below are some tips for business planning that will help you craft your business plan most effectively:
Think of the content rather than the template
As already emphasized above, it is a must that you think about what needs to be included in your business plan rather than which template you will be choosing for it. Including all the right things will help your business in a big way. It should be able to define your product and list down your goals and objectives, including ways to obtain financial security and ways to maintain a regular influx of income.
Other than this, a roadmap should also incorporate all the challenges that might be faced by the business as well as standing against the competitors. The customized written business plan for your new business may be the basic requirement of your business planning.
Ponder over your target audience
When creating a business plan, you must think about your audience and what they will think about your product. You must also decide on a pricing strategy that is enough to make your business profitable while providing quality products to your customers. You should be ready to answer some tough questions in your business plan such as how you are going to be making money in the future and are people going to want to buy your product when you pitch it to them.
Include important information only
Do not stray from the main purpose of your business planning, which is to make your business a success. Therefore, you should only include information that will be useful for your operational plans such as what you are selling, for how much, to whom, financial security, expected problems, and their solutions, the processes, competition, and risks.
Do your homework on the industry you are about to enter
You must conduct full research on the market you are about to enter. This will provide you with an insight into the business competition and think of new ways to combat it. Other than this, this will also be a great opportunity for you to learn more about your business venture and see the international market as well. You must not get fully absorbed in the whole research process but you must also not be completely clueless about it either.
Have a go-to plan for your business
For your business to be a success, you must include proper steps to take to make your business move towards its goals and objectives. It is a known fact that many new businesses fail within the first five years, therefore, you must have a step-by-step business planning guide as to what actions are needed to be taken to make your business a success.
Contents of a Business Plan
The main contents of a business plan are as follows:
- Brief Executive Summary
- Company Description and Goals
- Details about Products and Services
- Marketing Plan
- Operational Plan
- Management and Organization Intro
- Startup Expenses and Capitalization
- Financial Plan and Projections
Here Are The 13 Step-By-Step Guide To Writing A Perfect Startup Business Plan
The steps to writing a Business Plan are as follows:
1. The first step is to perform the deep research
Research always takes a lot of time. If you are going to write your action plan, then it is quite beneficial if you do the research in the right way. Evaluate everything deeply. You must have deep knowledge about the product, company, the market, & the parameters of the competitive world. Alongside keep the market knowledge on which you are trying to enter.
2. Keep in mind the purpose of the plan
A business plan that is written for a startup company will be different from a well-established company. Determine the purpose of your strategic plan & then write it.
3. Write Your Executive Summary Convincing
The executive summary is the initial phase of the business plan. Though many people love to write it at the end because it summarizes your entire business plan. Always remember that the executive summary should be short & to the point.
An Executive summary is a brief story of your workable steps. It should be very easy to understand for anyone, especially for investors. It should describe your business planning and the solution strategy solved by your business to the community.
In the executive summary, you should only discuss the main points of your business. Research showed that the one-page executive summary works better than the two-page or longer executive summary.
It should cover the following;
- Details of your business
- Your competition
- Target market
- Solution your business is going to solve
- Future milestones
- Team Introduction
It should be noted that if you are writing an executive summary for the investors you can create a different executive summary for them because investors are always interested in more opportunities and profits. In such a situation you can add three more points in the executive summary for investors.
- Requirement Funds.
- Projection of Profit and Loss.
- Business Exit Strategy (in case of loss)
4. Jot down the overview of the company
The company overview is the profile of your company. You must write the history of your organization, products, or services that you offer. Mention your niche, target audience, resources & market.
5. Always document everything
Investors usually invest in ventures of which, they are sure. Thus, they generally want to know about the business & its financial condition. Therefore, it is necessary to document everything.
6. Determine & analyze your market
The most important part of writing the business plan is to perform an in-depth analysis of the market. Investors are usually more interested in businesses & they should have a great understanding of their all dynamics.
7. Describe the Business Organization
The business organization & management structure are very important. It must include organizational structure, the ownership structure, the background of the directors & owners, and hiring requirements. Entrepreneurs must define the business model, business location, service or product, customer, and company summary while developing a startup business plan.
8. Write about the Products & Services
It should contain write about a detailed description of your services & products, share clear information regarding the current status of your products, and explain the product research & development goals, IP and sourcing & fulfillment.
9. Be clear about your marketing plan
You should write down how you are going to market your products & services to grab the target audience’s attention. The marketing plan must include positioning your services & products in the market with promotion plans for a successful business.
10. Make your sales plan & write it
It means that you must describe who will be selling your product & how much sales team you need. Mention everything related to sales.
11. Mention the financial plan & projections
It provides the investors with an outlook on the current state of finances & projects. In case you have already established a business, include details of the past performance in this section.
12. Include the appendix section of the business plan
Do not stretch your business plan unnecessarily. In case you have any supporting documents, simply attach them in the appendix section of the document.
13. Reflect your passion & dedication
Always remember that your business plan always reflects your dedication. It must include everything which is mandatory to start up the business.
These are some of the noteworthy points that should always be kept in mind while writing the business. You may visit Mikel Consulting for better guidance and help. Bring your business to the top by making well-planned strategies to start the business.
This article is collaboratively written by Waqar Hussain and Steven Thompson.
Waqar Hussain is the CEO of The Business Goals.
Steven Thompson is working with Mikel Consulting as a blogger. Mikel Consulting provides the best business plan writing services in Canada. Their professional business plan writers deliver quality and customized plans for your business.
This article is updated on 26th Sep 2021
Waqar Hussain is the founder of The Business Goals. He writes about entrepreneurial strategies and is an SEO consultant by profession. He is a B.Com, GDM, and an MBA from the Australian Institute of Business.