A business plan is a formal document that includes the goals of your business and how you will achieve them. It is a roadmap or outline to showcase how your startup will work but it has to be compelling to attract investors.
Whether you are a new startup or an established one, a business plan in entrepreneurship is quite important.
Here is a short guide to help you create a startup business plan in 2023:
have a clear goal
When you write your company description, try to include the most important details. A simple two-sentence business description will not do the job. However, avoid putting too much information as this should be a concise summary. In short, around three to four paragraphs would be sufficient.
Start by noting down the vision of your business, when it starts operating, the products/services you’ll offer. Then you can enlist if your startup aims to be online, have physical stores or both. What is your company’s mission? Will it be local or international? Stating critical goals will allow you to have clear objectives.
Moreover, you could even add a few lines about your future prospects and the reason to start as a company in brief.
Find your target audience
Every product has a specific audience for it. So, you need to identify exactly where your product or service fits. It is like finding the right piece which fits the puzzle.
Focus on understanding your customers and their needs. One of the best ways to get valuable insights from your target market is through market research. It is a basic yet accurate method to figure out what exactly customers are looking for, their preferences, characteristics, etc.
Here is a step-by-step guide on how you can conduct market research.
Observe your competitors
While you are researching your target market, analyze your competitors as well. It’s a great way to learn more about how your startup differs from them. This will help you build a strong brand value and USP (unique selling point). Highlight the elements of your product or service that not only fill the market gap but also provide a competitive advantage.
Determine your budget
Financial planning for your startup has to be precise and accurate. A recent study by Skynova analyzed data from CB Insights and it was revealed that around 44% of startups failed because they ran out of cash. This shows that even if your product ultimately sells, poor budgeting can cause the company to shut down.
So, how can one budget accordingly?
You need to simply prepare a list of all the things and their costs. For example include basic requirements such as:
- Rent/Property costs
- Equipment expenses
- Legal charges and taxes
Estimating your business costs has to be as accurate as possible but sometimes things may not go as planned. Hence, try to add higher numbers for expenses that you are not certain of, at the end of the day the extra cash can always be used for something important.
Make realistic financial projections
No business is profitable in the starting year and that is normal. All you need to do is figure out in how many years will the break-even point be achieved. In the beginning, you do not have any sales pipeline, balance sheets, or cash flow data to make assumptions about your sales.
So, be very realistic when you are making financial projections and consider all the factors that can impact your revenue. The main aim here is to provide investors with an honest and decent estimate of your profits and losses.
Structure your startup
Since your business is new, organizing the structure of your startup will be easy. Although, as your company grows, the hierarchy of the team needs to be in place. There should be no confusion as to who is in charge of which departments.
However, do not overcomplicate everything with many supervisors or managers. This is mainly to understand who will make the final decision.
Build a marketing plan
Once you have your market research and budget in place, you can build a marketing plan. You need to brainstorm an effective marketing strategy to get your target customers. In short, it is a game plan to convert potential consumers into customers of your product or service.
Apart from that, you need to have some basic things to generate revenue from the marketing campaigns.
The following are a few key necessities of new startups:
- A website
- Social media accounts
- Customer loyalty programs
- Email marketing plans
Having a brand and website ready can help users get the important information they are looking for. These elements will assist you to focus on customer retention and satisfaction.
Keep it concise
Although writing a business plan seems quite big it does not have to be a 50 or 100-page description. So, narrow down all the essential information and details as briefly as possible. Remember to have professional language and avoid any grammatical errors as it will be shown to potential investors to raise capital.
In a nutshell, starting your business is an exciting journey but you cannot let it drive your focus away from planning things out. As you research your target audience and competitors, it will be clear how feasible your startup is and help you improve your product.