[Startup Business Plan] How To Write A Business Plan For Your Startup
Executing an idea right is more important than the idea itself.
Ask any successful business person. They will tell you the same.
Having a plan increases the success rate of the startup. In the business world, the plan is referred to as a Business Plan.
What Is A Business Plan?
A business plan is a document that describes in detail the approach you are going to have to make your business successful. It puts forward a written roadmap for the company from various viewpoints like marketing, financial, and operational.
In general, a business plan tells:
- What you plan to do
- How you plan to do it
- Everything in between the above two points
Why A Business Plan Is Important
- It makes it easy to track your progress. And if things are not on track, adjust and implement.
- A formally written business plan increases your chances of success by 16%.
- A business plan makes it easier for a startup to raise capital.
- Startups with business plans also see higher growth rates compared to startups without a plan.
A typical business plan consists of the following elements:
- executive summary
- company information
- market research
- product/ services description
- management and operational description
- marketing and sales plan
- financial description
Business Plan Vs. Pitch Deck
- A business plan consists of a 10-100 page detailed information regarding the startup, whereas pitch deck consists of 10-20 slides made to provide an overview of the startup.
- Pitch deck is highly visual, whereas a business plan is mostly text-based.
- To approach investors, Pitch Deck is used, consisting of the business plan as an aspect.
- Business Plan is a written roadmap for the company from various viewpoints like marketing, financial, and operational, whereas, Pitch Deck is used to get investors attention.
How To Write A Business Plan For Your Startup
Following are the important points you must incorporate in your business plan:
1. Start With A Clear Objective In Mind
Before starting to write your company’s description, have a clear idea of what you are going to do.
Start with writing about your company, its plans on approaching the market, sector your company will cater to, how your products and services are the best fit for the industry.
Just be precise and reasonable in your approach.
Be clear about the operations of your company.
Whether you’ll operate online or have a physical store, or will follow the phygital (physical+ digital) approach, be precise.
Tell them why you are starting the business and your vision for your startup. Write precise and try to incorporate the above-said points in no more than three or four paragraphs.
2. Decide Your Target Market
Business becomes easy to do if you know your target market and customer. You may think the opposite, but your business isn’t for everyone.
So, from the very start, make sure you know very small detail about your target customer.
For Example: If you are about to sell a product ‘X’, you should know what kind of people will buy it, their location, income level, age, gender, etc. Click here to know ways on how to decide your target customer.
3. Competitor Analysis And Whats Sets You Apart
Competitor analysis helps you understand your startup’s position in the marketplace in comparison to your competition.
So, in this step, analyse you direct and indirect competitors.
State points showing their strengths, weaknesses and how your startup is capable to stand strong against the existing players.
Write the advantages you have against your competitors and how your startup separates itself from the crowd.
4. Financial Management
Your company can grow as long as it can keep up with its finances.
Investors don’t hesitate to back entrepreneurs who are well versed with money.
So, you need to have all your financial numbers in order when you’re writing a business plan.
If you lack the financial planning skills, start with basic things like:
- equipment costs
- property (buying or leasing)
- legal fees
- marketing cost
Try to be accurate and if you are unclear about expenses, estimate higher.
Estimating a bit higher will provide you with a margin of safety.
In the example above, If you require INR 3 Lakh to manage the startup, it may not be a bad idea to raise 4-4.5 lakh.
Having some extra cash in the bank can provide safety in case something uncertain comes up.
5. Financial Projections And Goals
In simple terms, a financial projection is a forecast/projection of future revenues and expenses.
Financial projections are a must to incorporate in your business plan.
Its quite obvious that you won’t have any income statements, balance sheets, cash flow reports, etc. if your startup is not fully operational.
So, if you are just starting, you can base your projections on the total size of the target market, in addition to the percentage of the market you think you can penetrate.
Keep the projections reasonable, and if you have an expansion strategy in mind, factor that into your financial projections also.
If you need help in financial projection for startup, contact us.
6. Marketing Strategy
Discuss your marketing strategy in the business plan.
Start by defining your marketing goal and how will you target the potential customer.
Write in detail about your marketing approach (digital or conventional marketing), your acquisition strategy, marketing budget, etc.
Incorporate all the points mentioned above in your business plan, and it will surely help increase your chances of growth and a potential funding opportunity.
Writing a business plan may seem like a wearisome task, but it will keep you organized and save you from the hassle later on.