How To Create A Startup Business Plan
Have you made a business plan yet? If the answer is no, keep reading.
Small business plans make a world of difference when trying to achieve your financial goals. When you decide to write and formalise your start-up business plans, you not only clearly define your target customer, but plan your sales, marketing, and business operations too.
If you are asking yourself, how do I create and write a business plan? My New Venture is here to help. With the guidance of real-world experiences, tips, and advice, you can easily learn how to establish your business plan.
Why Should You Write a Business Plan?
What is a business plan?
A business plan is a written document that describes your company and provides an overview of its future. Creating a business plan is essential to starting and running a successful business.
Not only will the plan set out your business strategy by outlining actions and goals but it can encourage you to make concrete objectives.
Planning and preparation are key for business longevity and continued success, that’s why a business plan highlights any gaps in your start-up that you may not have noticed if it wasn’t in writing.
Are you an entrepreneur that may require external funding? Investors rely on business plans to examine the feasibility of funding your start-up. Presenting a bank or outside investor with a strategic and well researched business plan is the first step in winning a loan or funding.
What Should You Include In A Business Plan?
Your business plan will act as the written document that outlines all your start-up ideas, strategies, launching and venture management. As you prepare your proposal, it’s important to remember that it may change and evolve as you dive deeper into your market. A well-constructed business plan is the first step in ensuring success for any entrepreneurial endeavour.
The Executive Summary
This component of your business plan gives readers an initial overview of the entire document. The executive summary will help readers understand what to expect from the document and essentially what they will learn from your business plan.
Why is this an essential element?
Your executive summary may be the make or break for investors to continue reading the rest of your business plan. This overview of your research should concisely summarise your start-up business plans to encourage investors to act on your idea.
A Description Of Your Business
Now it’s time to explain the history of your start-up business. Your business description should include answers to these questions:
Have you started trading, if yes, when?
What progress has your business made?
Personal industry background
The owner of the business
It’s important to make your business plan accurate yet engaging, to stand out from other start-ups. It’s best to avoid technical jargon when explaining what makes your product or service different from the rest. Consider whether your start-up business offers any benefits to change and improve your industry?
Although you may not feel like spotlighting disadvantages or improvements, identifying these and highlighting how you plan to address and overcome them, will retain investors’ interest in your business plan.
Details Of Marketing Strategies
Your marketing strategy is the best way to show your plan of action, designed specifically to promote and sell your product or service. This element of your business plan will reveal your position in the market, taking into consideration the quality, price, unique selling features, and benefits of your product or service. As well as outlining your current decisions, you should provide details of your future strategy to retain and reach your ideal customer.
As a guide, your marketing strategy should provide information on these four key subjects:
Price: how much will you be selling your products for? How did you get to this price point?
Product: what are you selling and how is it unique in the market?
Promotion: how do you plan to reach your ideal customer?
Place: where will your product be sold? Place: where will your product be sold?
An Analysis Of Your Competitors
Choosing the right market for your product or service is one of many make or break decisions for your start-up business.
Planning your market entrance by researching and analysing competitors is the best way to reach customers and persuade an investor to trust your research. Performing a competitive analysis will give you a head start on success and act as the basis of your business plan. Creating a strategy that suits your business by researching major competitors not only gives you insight into their sales and marketing but also product performance. This will support your conclusions and validate your final business decisions.
What should I include in my competitor analysis? This may change depending on your market, customer, and product, however, answering these questions is the best groundwork:
Who are your competitors?
How big is your target market?
Who is your ideal customer?
Industry trends and trajectory
Informed guesses and future goals
Don’t overcomplicate the process. Find supporting sources relevant to your market by using:
- Government statistics offices
- Credible news outlets for your specific industry such as Real Business Magazine, Business Matters Magazine, Elite Business Magazine
- Academic research
- Industry associations
An Operations And Management Plan
This section of your business plan includes the organisational and management department of your start-up business. Clearly outlining who’s operating your venture and the details concerning the legal structure will help communicate to investors the potential in investing. Operations management planning will allow your business to seize opportunities and tackle challenges effectively.
Do you have a management team? Using an organisational chart can easily visualise your internal team by including the different roles, relationships, and responsibilities.
Financial Details And Forecasts
Aside from your vision, goals, and hard work, the success of your start-up relies on its financial health. This section of your business plan will reveal to investors the extent to which your start-up is viable for the foreseeable future.
Your financial details and forecasts should include:
An income statement
A balance sheet
Financial data and projections
This component of the plan is crucial to forecast and identify gaps or negative cash flow within your start-up and how you plan to improve and adjust operations. In short, your financial forecasts translate your start-up business into numbers.
A Development Plan Of Products And Services
Your product or service will feature predominantly throughout your business plan. However, this section is vital to outline important or specialised details to grab readers attention. It’s important to consider the launch of products or services in the near future within your development plan. This will not only build interest and trust with investors but show how your goals can be broken down into smaller, actionable tasks.
Do you sell many different products? It might be worth including general information on each to avoid an information overload.
Do you only stock a handful of products? You should aim to include additional details on each product.
Top Tips For Creating A Small Business Plan
Business plan writers have weighed in and shared with us their specialist advice on what to include to create a winning business plan.
Keep these top tips at hand when writing your start-up business plan:
Know your audience, it’s important to adapt your business plan for investors, companies, or banks
Evidence is key in supporting your claims
Stand out from competitors, know why you’re different
Be realistic in all financial estimates and projections
Think like a banker, write your business plan through the lens of the reader
Be pragmatic with the time and resources available to you
Focus on your future progression and problem solving
Ensure that your numbers are consistent throughout you plan
Be clear and concise with your goals and objectives
Add milestones to illustrate how you can achieve them where appropriate
Avoid These Mistakes When Writing A Business Plan
When it comes to writing your business plan, the final document is usually the result of many different drafts. Preparing a business plan for a small business is trial and error as the research develops and progresses as your understanding of your business and market grows.
Avoid these common mistakes when writing your business plan:
Formatting your business plan is second priority to content. The substance and solid basis of facts and research should always be more important than how it is presented. However, balance is key! It's important to remember that investors may be visual and lose interest in your plan if it seems too text heavy or hard to understand.
Empty claims with little to no research. Include statistics, data, and quotes after each time you make a statement regarding your product or service. This will prove to readers that your argument comes from reputable and knowledgeable sources.
Avoid the use of strong adjectives and superlatives. This means words such as ‘amazing,’ ‘outstanding,’ or ‘best’ should be removed from your business narrative. Not including these words in your business plan adds credibility to your plan.
Unrealistic financial projections that may not be fulfilled. Present reasonable financial forecasts to ensure investors are interested in investing in your venture. Always remember to accurately differentiate between revenue and profit.
Remember to always be conservative with your time predictions. Overly optimistic time frames are usually unachievable, and delays regarding your product or service are expected in the beginning phases of your small business.
Frequently Asked Questions
How Long Should A Business Plan Be?
Have you heard the phrase, as long as a piece of string? Your business plan is a large document that includes research, information, and data specifically for your start-up business. This means it’s hard to provide a universal length, it’s best to be concise and avoid waffling, but follow our guide and measure a plan by readability and summarisation.
What Is The Proper Format For A Business Plan?
There’s no set format but it should be simple, standard, and most importantly, easily understood. For good practice, aim to use standard fonts such as Arial or Times New Roman which are widely recognised and accepted. Always remember to number each page and include your company name in either the header or footer of each page.
Should I Hire Someone To Write My Business Plan?
If you are stuck on time, good news! You can hire a business plan writer. This will ensure your business plan is industry accurate, written well, and able to convince your intended audience to make an action. As your business plan is a very important and strategic tool for most start-up businesses, this may be the best option for you.
When selecting the right business plan writer make sure to read reviews, assess the quality of their writing and ensure the price works for you.
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