Each startup begins with a precise idea and a readiness to work. But before any activities are done, you should first create a business plan mind map to make your business successful.
It may lead you to success assisting in your thoughts organization and capital raising.
Due to the industry estimations, 16% of successful startups acted upon their business plan, and 71% of high-developing companies raised more because of a thorough roadmap for their future startup.
A business plan can become your indispensable helper in conducting the viability check and even generating new ideas. However, to obtain success, you should obey the following composition:
- Executive summary
- Company Overview
- Marketing Plan
- Finance plan & forecasts
- The structure of the team
- Business Plan Components
This article will cover writing a startup business plan, presenting every section in detail. You’ll find out how to create a business plan for your startup, avoiding common mistakes.
This part serves as an intro, representing your business plan as a whole. Remember: a perfectly made executive summary attracts attention to your business plan, giving your startup essence briefly. Below we’ll find out what parts should be contained in the executive summary.
- Business description – Get people acquainted with your plans and offers as to your upcoming startup. This part should be about 1-3 sentences and no more.
- Destination market – Represent the most valuable business goals of your future product, focusing on users’ pains you would like to solve, the market overview, etc.
- Competition – Write about your possible business competitors and point out characteristics that will make your business unique. For example, offer quality or price much different from your rivals’ ones.
- Monetary funds – Describe your business aspirations and focus on specific steps that need financial predictions. Then, illustrate your future sales, revenue, and ROI with charts understandable for investors.
- Staff – Make a short representation for investors about people developing your idea. Describe reasons for their cooperation with you. Characterize shortly each team member as well as their experience level. If you’ve got a shortage of specialists, it’s worth noting as well.
- Finances and costs – At the end of your executive summary, tell about the amount of money necessary for your concept implementation. Such information should be represented to your future investors beforehand.
6 Essential Tips for an Excellent Executive Summary
We want to offer you some mistake-free tips for an executive summary that will tone all the business plans.
- Since the executive summary represents your business plan, on the whole, it should be written in the last turn. Complete the survey for the rest of your startup business plan, and then prepare your executive summary.
- You should grab people’s attention by highlighting the essential characteristics of the startup. Stay away from adding unnecessary details, but care about the excitement and interest that your future customers may feel after reading your executive summary.
- Your executive summary should be structured appropriately. It will help you send your business plan message to the customers. So, make all the executive summary components short but meaningful to represent clear conclusions to your customers.
- You should tell your exit strategy to the investors. For instance, mention employee buyout, technical due diligence, or share selling conducted before another company’s acquisition.
- Investors may be assured if your words are confirmed by undisputed facts. This way, your business aims, perspectives, and experience will be convincing. For that purpose, you can additionally describe a projected share of your business or a market valuation.
- You should keep away from banalities. Don’t write about your team’s excellence because it’s not interesting for the investors. They have seen a lot of enthusiastic and passionate staff, and it’s not news to them. Describing your project, avoid other cliches like “next Instagram/Facebook,” breathtaking, etc.
Overview of The Company
A company overview is the shortest part of the business plan but one of the most essential. Here you can place your startup history, aims, team structure, and so on. In this part of the business plan, you should write more about the following:
- The history of your startup. Such a description entirely depends on your company’s current stage. Tell something about your background if you’ve got an existing business: when your company was founded and where, your previous projects, etc. If you are a startup without a great history, you can tell about its founders or the process of finding a technical co-founder, and how it was embodied in life.
- Your placement. Give a brief description of your company location indicating a physical address or tell about your future location. If you rent or buy an office or have a home, you may also indicate such a fact.
- An industry you participate in. Don’t write something brief like “we sell/buy articles.” Name a business type your startup relates to healthcare, travel, hospitality, etc. Finally, describe your industry in a few words.
- A team representation. Start with the info about yourself, and then tell about your team that will work on your startup. If you’ve got a shortage of experts, don’t hesitate to mention it and offer ways for such a shortage to be fulfilled.
- An ownership and a legal framework. Investors should know such information because taxation details depend on it. Define if you’re in a partnership or a sole proprietorship (S-Corp), LLC or a corporation, and so on. Indicate the founders of the business and how much stock each of them has.
- Values and missions. Put down one or two creative sentences describing the most valuable goals of your organization brightly. Place there a piece of information that characterizes the most your missions and values.
Such a plan is an essential representation of your marketing aims and advantages. It assists you in producing an appropriate business strategy and finding a business niche to work in. Such a plan contains the following parts competitor survey, target audience research, and SWOT analysis.
By conducting a competitor survey, you can find out more about your rivals: their strategies, services, target market, etc. To know more about it, you should keep up the following steps:
Start to search for your rivals. Find their sites in Google by common search requests. Choose the closest to your idea and industry, and make up a list with obtained results. Then dive deeper, checking their customer feedback, social media content, etc.
Investigate them. Continue the in-depth survey. You can do it using such tools as Alexa, SimilarWeb, or Ahrefs which will simplify the process. Pay special attention to such points as:
- Time spent on the market. Verify the domain registration date, contact information, and server statistics using the WHOis.net resource. It will help you realize if you’re dealing with a business newbie or a big player and count your cards.
- Organic traffic. Conduct an analysis of your competitors’ popularity by the number of visitors who came through the Google search results. You can do it with the help of Ahrefs or Alexa.
- Costs. Study their pricing as well. This way, you can define your own price, is optimal for your business. However, remember that it shouldn’t be lower than your rivals’ one.
- References in social media. Find out what people think about your rivals. For that purpose, you can verify the social media shares, engagement ratings, keywords used, and so on with the help of Sprout Social or Followerwonk.
Sort out your rivals. After a detailed study of your competitors’ data, stay informed following their moves. Forewarned is forearmed. With this purpose, you can also divide your competitors into three following categories, noting their “danger level”: main (or primary), secondary and tertiary rivals.
Target Audience Research
To start with, you should identify who’s going to buy your products. Then, make a simple brainstorming session, commonly analyzing your future customers by the criteria like gender, ethnicity, age, education and location, income, etc.
For instance, you would like to launch your website selling automotive parts on the US Eastern Seaboard. This way, your target audience will practically look like that: ordinary service station workers or drivers (males) about 18-65 y.o., having secondary education, and located somewhere in Florida with $60,000-75,000 in revenue.
After a general assumption, you should dig deeper, collecting online and offline focus groups. So, carry out profound research. This way, you can define patterns and details that will assist you in a better service organization for your customers.
Study the rivals’ audience. Investigate the marketing channels used by your opponents and bear in mind: your websites or social media should solve the customer’s pain points better than your competitors’ ones.
Make up a buyer persona. It means you should create a profile of your future average customer according to the research made due to the previous steps. Try to find out their challenges, activities during their spare time, etc.
It is the concluding step in preparing a marketing plan used by entrepreneurs to collect all the necessary points in one place. Undertaking such analysis, you should identify your Strengths, Weaknesses, Opportunities, and Threats. So, let’s discuss it in detail.
- Strengths. Find out your strongest features that will help you meet challenges and stand your ground in rivalry.
- Weaknesses. These are the drawbacks that will bother you during your startup development.
- Opportunities. These possible situations or occasions will assist you in your startup development.
- Threats. Such outside menaces are not dependent on your decisions; however, they may affect your business.
Finance Plan & Forecasts
You’ll obtain no money if you don’t represent a plan of your future expenses and profit forecasts. Therefore, making a financial plan is also vital for every startup business plan because it helps turn your aims into accomplished missions.
This section should contain the next parts:
- Accounting balance sheet. Here you should indicate your actual financial resources. However, if you look for investments in your project, you may predict your upcoming financial status in this part of the finance plan.
- Future cost consumptions. In preparing this part, you need to predict the costs of your concept implementation. It’s necessary to make your startup clearer for investors.
- Revenue forecasts. In this part of the finance plan, you should predict the number of sales as well as the future revenue of your solution.
- Future cash flow. Preparing the last part of your financial plan, you need to forecast your upcoming cash flow for a certain period. Define all the spending and profits. It can help you control your company balance at every stage of development.
Tips for a Finance Plan Completion
Making a finance plan is tricky and challenging but crucial for every startup. So, these tips are gathered to understand all the hidden pitfalls better and avoid mistakes during a finance plan completion.
- Keep being optimistic but realistic. Look positively at your financial perspectives; however, don’t get carried away. You should have a healthy balance between representing your project as an appealing one and the ground truth.
- Your financial plan should correspond to your business plan. All the digits given in your financial forecasts should coincide with everything mentioned earlier in your business plan. For instance, if you launch your product in a particular month or quarter, your financial plan has to contain all the expenses for an indicated period.
- If you don’t know how to represent a finance plan and where to start, you can use templates. These templates have got all the columns and sheets needed for your financial estimations and forecasts.
- Make your economic predictions clear. The majority of investors want to know not only your cash flow but also how you can manage your funds. So prepare enough data (like market and competitor surveys, etc.) to prove your financial guesses.
The Structure of the Team
The last part of your business plan should contain a representation of your startup team to the investors. You need to tell about:
- Management team. Describe your key workers’ experience, indicating how their skills connect to their responsibilities. For instance, you can show the investors that you have picked a reliable and robust team if you tell them that your Sales VP increased the company profit from 5 million to 15 million, and so on. This way, you’ll also emphasize the value of every team member.
- Management Team Gaps. It’s ok when startups haven’t got enough management team members while writing their business plans. So, you should list the missing workers and describe the requirements for them, their level of experience, etc.
- Board Members. It should be mentioned that startups rarely have the Board of Advisory or the Board of Directors — a group of managers that provide effective leadership for a startup and are paid for that. However, you can think about it and include it in the structure of your startup team.
Writing a business plan is a complex but necessary thing for every startup founder. Bear in mind that you can apply to already prepared templates, though no template matches every business.
If you need more information, you should apply to an experienced team. The skilled specialists will give answers to the most nerve-wracking business questions and provide you with the most appropriate solutions to your problems.