Building your own startup and watching it grow into a profit making business can be one of the most exciting things anyone can wish for but, it’ll also mean signing up for countless challenges which could only get worse if you don’t have a strategic business plan in place.
Because, your business plan is the roadmap that helps you steer your new business across its path, all the way from initiation to growth and scaling. It not only acts as a guide for you, but is also confidence-inspiring for investors, lenders, and potential partners.
In this article, I’ll take you through all of key steps you need to take to create a solid business plan that acts as a foundation for your business. Let’s get started.
Why do you need a Business Plan?
Now, before we get into the specifics of how you should make a business plan, let’s first look at the “why.”
Getting a business plan before launching out your business is very important because it will help you:
- Focus strategically: It paints a clear picture of the main goals, vision, and core mission of your business.
- Attract investors: It clearly outlines how the business is going to make its money. Any business relies on funding to get through its nascent stage, and for that, the prospects need to look promising.
- Manage your finances: A business plan includes concrete budgeting and forecasting figures to avoid losing track of finances amidst the endless cash outflows that a new business incurs.
- Identify Risks: It forces you and your managers to think about the inherent and external risks that the business faces, helping you come up with effective mitigation strategies in time.
So, it’s safe to say, a well-grounded startup business plan is pretty important to ensure the success of your startup.
With that said, let’s look at how to create a business plan that checks all the boxes above in the following paragraphs.
Executive Summary
Table of Contents
The first and one of the most important sections of any startup business plan is the executive summary. It offers a bird’s eye view of all of the contents within your plan, and should be designed in a way that hooks the reader’s attention.
An executive summary should include:
- An overview of the business, briefly describing what it’s all about.
- A mission statement that lays out the core values and purpose of your business.
- A listing of all your short- and long-term business objectives.
- A summary of the products and/or services offered.
- Financial highlights that may include relevant projections, forecasts, etc.
This section should be brief, concise, and compelling, urging readers to find out more.
Company Description
Company description is the section of a startup business plan where the identity of your business is to be expressed. It gives readers a deeper insight into the specifics of your business.
Key components of a company description should include the official business name of your business, its legal structure (whether it’s a LLC, partnership, corporation, etc.), location, history, and more.
It also sheds light on the particular problem(s) that the business intends to solve within the market segment it targets. While competitors may already exist, your company description should highlight the ideas, resources, or plans that give you a strategic advantage over them.
In a nutshell, a convincing company description makes it crystal clear why this business exists, what it plans to achieve, and how.
Market Research and Analysis
A business is only ever successful if it manages to consistently solve a problem for the market. This cannot be accomplished without first understanding the market itself.
The market research and analysis section of your startup business plan is meant to demonstrate that you’ve meticulously done your homework, and aren’t just diving headfirst into unknown waters.
Areas to cover include (but are not limited to):
- An industry overview
- Target market
- Current and predicted market trends
- Competitive analysis
Since market research is all about gathering and deriving conclusions from real-world data, this section should include statistics, graphs, and charts to demonstrate information in an easy-to-understand manner.
Organization and Management
Investors need to know the people behind the business before they can consider funding it. This section introduces readers to your team and shows the business’s organization structure.
This includes the founders, board members, and key management. Highlight their expertise and experience in their particular roles so that readers may feel confident in the ability of the business to succeed.
To make your startup business plan standout successfully, you want to use this part to meticulously highlight the experience, expertise and qualifications of your team in a way that will boost the confidence of potential investors in your startup.
Products or Services
This is where your startup business plan clearly describes your business’s main offering (be it product or service) and why it is valuable to your target market.
Details to include:
- Product/service description: What does the business sell? What are the benefits of the product or service you offer? This is where you’ll list them in details
- Unique Selling Proposition (USP): What makes your offering unique, compared to others?
- Lifecycle: If applicable, explain the lifecycle of your product or service.
- Research and development: Outline plans for future products or improvements.
Marketing and Sales Strategy
Marketing is the driving force for any profit-making business. Especially in this internet age, even the best products need a solid digitial marketing strategy behind it.
The Marketing and Sales Strategy section of your Business Plan should include the Following:
- Marketing plan: How do you plan to promote the product? Mention the channels you intend to use, such as social media, content marketing, SEO, etc.
- Sales strategy: Outline the sales process all the way from customer acquisition techniques and lead generation to closing out deals.
- Pricing Strategy: Explain your pricing and how it’s both justified and competitive within the industry.
- Sales Forecasts: Show predictions of forecast sales based on figures from your market research analysis.
Your sales strategy should show an actionable and effective plan to get and retain clients. To learn how to promote your business online, get visibility & boost sales, check out our 9-step strategy guide.
A successful business offers a solution to a problem that its target audience faces, and it should be marketed in a place where it’ll be seen by them.
For instance, if you have a streaming platform and the question your business answers is “how to watch NFL anywhere” — your online ads should be on pages that already get tons of NFL fans. For example, sports news blogs, social media pages for NFL updates, etc.
Funding Request
Any new business requires funding to function until the cash flow it generates starts to sustain itself. This makes the funding request section of your startup business plan absolutely critical.
Yes! And it must clearly quantify the funding needs of the business and a budget for where that money will go to.
Investors need to see that you have a clear plan for the funding that they will provide and that it will be used wisely, generating returns for the business and them. Hence, a funding timeline and financial plan with a brief overview of projections like expected ROI (return on investment) should also be portrayed.
Financial Projections
This section lays out a detailed financial outlook for the business, including:
- A revenue model, explaining how the business will make its money.
- A break-even analysis which determines when the business will have recovered all the money invested into it and become profitable.
- A forecast profit and loss statement including all expected income and expenditure.
- A Cash flow statement forecasting the business’s cash flow from operating, financing, and investing activities over time.
- A balance sheet showing the business’s assets, liabilities, and equity, portraying it financial position.
All forecast financial statements should be based on reasonable assumptions and realistic.
Appendix
Lastly, we have the appendix. It’s the final section of any startup business plan and includes relevant additional information supporting the overall plan. It’s an optional section to add, but can be useful to reinforce your plan with supplementary details.
It can include documents like team member resumes, product photos, legal papers, market research data, and references to add credibility to the plan.
Final Words
Crafting a solid startup business plan is key to getting your business off the ground. It shows you know your market, finances, and overall strategy. With this guide, you’ll have a plan that not only sets you up for success but also grabs the attention of investors and partners.
Just remember to stay flexible—markets and customer needs shift, so your plan should evolve with them. Stick to this process, and you’ll have a plan that drives your business forward and impresses stakeholders along the way. And of course you can reach out to us for support here.
Now, it’s over to you. What are your challenges when it comes to creating a business plan? Drop your comments below.
| Author’s Description Fareed A. Siddiqui is a seasoned content writer with over a decade of experience, professionally writing since 2011. As a Top Rated Plus freelancer on Upwork, he has built an established profile by consistently delivering high-quality content tailored to his clients’ needs. Fareed’s expertise spans various niches, helping businesses and individuals communicate effectively through compelling and engaging writing. |
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