HOW TO WRITE A STARTUP BUSINESS PLAN
Understandably, writing a startup business plan requires more research. Indeed, it has to be very comprehensive since most start-ups look for venture capital, crowd funding or bank loans as seed money. Alternatively, they also look for funds to sustain the business. While you can add some elements of the traditional business plan, there are certain specifics you will also have to highlight. Please note, it is imperative to include relevant information from traditional business plan such as staffing, key staff and leadership, projected financials, sales and marketing strategies among others, in a start-up business plan. Contacting a good start-up incubator for drawing a business plan can fetch you the desired results.
Nature of Business
To be attractive, any startup has to be unique. Meaning, your offerings have to differ vastly from those available from established companies and competitors. After adding the mission and vision statement and other relevant details from a traditional business plan you can speak about why you think your business will succeed.
Start-ups general do not operate alone during the first couple of years of inception. They require other businesses such as suppliers, logistics, warehousing, IT support and other infrastructure to support the business. While including these strategic partners for your start-up, also mention details of the roles they will play in your business.
As mentioned earlier, nobody would be interested in funding a startup that does not have a clear competitive edge in the market. Here, you will need to include details about why your product and service offerings are better than competitors. Augment this with few lines about realistic quality assessment of your offerings vis-à-vis those of other firms in the same industry.
You may have excellent academic qualification and expertise in your chosen start-up field. This is one of the resources you can draw upon, provided your self assessment is not exaggerated. Another important resource you need to mention in a startup business plan is the expertise your associates or partners or employees have brought in. Physical resources including funding from your savings can also be safely mentioned on a start-up business plan. Intellectual property rights held by your start-up count as a key resource and hence, it is vital to include it on you start-up business plan. In a nutshell, write about each and every resource that your start-up has and can reliably draw from during the course of operations.
Before launching a start-up and drawing a business plan, you will require in-depth studies about how the market for your product or services is shaping up, government policies and some insight of future developments. Draw your financial indicators based upon facts. These include inherent strengths and weaknesses of your start-up and anticipated market share. Remember, these financial projections have to be realistic to appeal to financers. Inflated financial projections and claims in a start-up business plan tend to put off investors, since they will also conduct independent research into the market.
While writing this element of a start-up business plan, you need to be extra cautious. Your target customers will already have other suppliers who are already flourishing in the market. Speak about various workable strategies your startup intends to adopt to wean some part of business from these established suppliers. Talk about what value you can add to business or life of your targeted clientele. Including details such as how your firm intends to deal with customers- personally through representatives or online and the customer experience you intend offering are also vital components you need to include in this segment of your start-up business plan.
In this section, you have to provide specific details about how your product or service will be delivered to customer. This section includes details about ways and means you will adopt to inform customers about your offerings, technology or techniques used to place orders, systems that will help your start-up deliver the product or service as well as after-sales customer care. Generally, every start-up uses multiple channels such as person-to-person contact, email marketing, online orders and home delivery services. Include these intricate details in your start-up business plan. However, ensure that your delivery channels are efficient as well as cost effective. Often, delivery channels can prove expensive and eat into overall profitability of start-ups.
Another significant component you need to include on a startup business plan concerns costs involved in your operations. Obviously, you will incur some expenses while launching a start-up, even if you plan to locate your office at home. Your service delivery channels will constitute major costs. Advances paid to business associates to ensure continuum of supplies or services, legalities and other inevitable expenditure all adds to cost of your start-up during the launch period as well as the first year of operation. It is fairly simple to get a clear indication about what your launch and operational costs will be during fledgling stages of the start-up. However, while mentioning this, make a generous allowance for any unforeseen expenses.
Staffing a start-up is something most entrepreneurs overlook while writing a good business plan. Staff salaries and perks consume a lot of capital. Additionally, financers will also want to know caliber of the staff that will operate your start-up. Meaning, they will look into academic credentials, experience and value the staff can add to your venture. Wherever possible, include CVs of key persons in your start-up while highlighting their achievements at previous roles. Also add a summary of their duties and why a particular staff is essential for success of your start-up. Should the start-up be capable of generating employment, mention this explicitly, since some governments and departments offer incentives for job creating ventures.
A report on Forbes states, 90 percent of all start-ups fail for a variety of reasons such as irrelevance to the market they operate, insufficient funds, wrong financial projections, inability to keep abreast with technology and a plethora of others. Sustainability is the key to success of any start-up venture. Financers including venture capitalists, banks and crowd-funding platforms will study sustainability of your start-up before investing anything as much as a single cent. Hence, include every possible yet verifiable reason why your start-up can be sustained beyond the first year in your new business plan. This ensures VCs and other lenders that funding your start-up could be profitable.
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POINT TO NOTE
Whether you’re starting a new business, repositioning your existing business, or targeting outside investors, getting a clearly detailed business plan can make the journey to your business goal easier, faster, and less costly.
Writing an investor-grade business plan can be challenging and time-consuming, even for those who have done it before. If you are a typical entrepreneur, you’re already too busy focusing on other priorities, such as building your customer base, perfecting your product, or recruiting key management. We can help.
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