Many entrepreneurs with great business ideas start their companies without thinking things through and creating a startup business plan. Whether it is because they do not know how to write a business plan or because it is too much work, skipping this crucial step can be one of the biggest mistakes an entrepreneur can make.
Nobody plans to fail, but a failure to plan virtually guarantees failure for entrepreneurs. Starting a business is not easy. You face plenty of expected or unexpected challenges that can make it impossible for you to succeed if you are not ready for them. Businesses with formalized and well-written business plans are likelier to achieve their goals than those that go for an unplanned approach.
Writing a business plan for your startup can make a world of difference. It helps you understand your customers, their problems, how your startup can help them offer the necessary solutions, determine your targets, and find out the best way to achieve them.
Do you think you have just hatched an idea for the next big thing? Well, turning it into a successful business begins with a professionally written startup business plan. This post will be your guide to writing a successful business plan for your startup.
3 Reasons You Need a Startup Business Plan
Before we get into the steps involved in writing a business plan, let’s take a quick look at the benefits of investing the time and effort in creating one.
1. It Gives You Clarity
Having a business plan will give you a greater understanding of your business beyond the rough idea that inspired you to start a business. You get a better idea of the objectives you want to achieve. Even the most basic startup business plan will define goals that help you understand how you can launch your startup and turn it into a successful company.
2. It Improves Your Chances of Success
Harvard Business Review found that companies with business plans are 16% more likely to succeed than businesses without a plan. When you have a clear path to take your startup to the next level, it can become easier for you to determine and achieve the targets you need to meet to grow your company.
3. You Increase the Odds of Get Funding
Venture capitalists and angel investors are typically the go-to sources for entrepreneurs to get the funding they need to start their businesses, and these investors do not like making bad investments. Convincing investors means you must prove that your business is viable and can offer them the positive return on investment that makes it worth their while. A well-written business plan includes financial projections that can clarify what the return could be like for investors. Simply put, a professionally written business plan can make it easier for you to secure the funding you need.
6 Steps to Write a Successful Startup Business Plan
If you have an idea for a startup but are not sure how you should get started with a business plan, you can consider hiring professional business plan writers.
Working with professional business plan writers can give you a better opportunity to present a stronger case to potential investors. Professionals experienced in writing business plans are well-versed in the intricacies of creating compelling business plans that can win over investors.
Of course, if you insist on writing a business plan yourself, this section of the guide will give you a step-by-step approach you can take.
1. Write an Executive Summary
An executive summary is the most critical part of your startup business plan. You need to hook the readers and captivate them and the executive summary is the way to do it. If you cannot keep potential investors engaged with the executive summary, the chances are that they will not bother reading the rest of it.
The executive summary should be concise but compelling. It should give them the information people need to understand why your business is unique and how it can stand out in the competitive market. While it is important to keep it as brief as possible, there are several sections you must include when writing the executive summary, including:
- The Business Model: What is the product or service you are offering? How will your business make money?
- Target Market: Who is your ideal customer? Who will benefit from the products or services your business offers?
- Marketing Strategy: How do you plan to ensure your target audience learns about your business?
- Competition: Which businesses will your company be competing with? How do you plan to capture a greater market share?
- Objectives: What is it about your startup that will transform the industry?
Many entrepreneurs tend to write the executive summary after writing the rest of the startup business plan. It can be a good approach because you can draw from what you wrote in the rest of it to write a more impactful executive summary.
You should also write a company summary that effectively boils down everything into a single sentence — essentially an elevator pitch. When done right, the summary can be the perfect way to capture the attention of potential investors or business partners and lead to a more detailed business plan.
2. Conduct Market Research
Having a great business idea does not guarantee that everyone will love it as much as you do. No matter how useful you think your startup will be, you need to know whether it has a realistic chance of success. This is where market research comes in. You need to learn more about your customers and competitors to understand whether your business can succeed.
Who is Your Ideal Customer?
To sell your products and services, you need to know whether there is a viable market. Many startups fail because entrepreneurs are so obsessed with their great idea and are blind to the fact that there is not enough demand for what they offer.
You can initially go for a broader approach to get an idea of your total addressable market to identify the revenue potential for your business. You can start factoring in competition for market share, consumer interests, and other factors to narrow down the audience to people likely to purchase your products.
Using detailed data analysis can help you create buyer personas for ideal customers, which can help you refine your approach to marketing effectively.
What are Your Competitors Doing?
When conducting market research for your startup business plan, you must also conduct a thorough analysis of your competitors. Understanding what your competitors are already doing can help you identify the key differentiators that could make your business stand apart.
- Think about why people should choose your product or service over theirs
- Ask yourself how you can offer solutions better than what already exists in the market
- Identify the flaws in the products or services already in the market
By identifying the current trends in the industry, the flaws in existing products and services, and understanding what your competitors are doing, you can determine better opportunities to create a more impactful business.
Your business plan must show that you have in-depth knowledge of the target market and your competitors, which can help you plan for success. You must first learn how to research the market before doing this step effectively. Working with professional business plan writers means you can rely on their experience to conduct market research quickly and get more accurate results. It means that you can invest your time focusing on other aspects of creating a successful startup instead.
3. Describe Your Products and/or Services
You know your target audience and what the competitors are doing. Now, you have to highlight what you are offering, what people are looking for, and that people are willing to pay for the solution you have to offer. Conducting thorough market research is crucial to this step.
Highlight Existing Problems in the Market
Asking potential customers about their problems (in the context of the solution you can offer) can give you a better idea of the solutions they need. Making products designed to solve existing problems has a greater chance of success than looking for problems your product solves.
Outline How Your Solution is Tailored to Address Them
After researching the existing problems in the market, you should narrow your focus to the key issues. What is it about solutions in the market that are not as effective as consumers would like? How will your business provide a more effective solution to these problems?
For instance, if people think that the current solutions are unaffordable, you can offer solutions at more affordable prices. Understanding existing consumer problems and tailoring your solutions to solve them can help you develop products or services that could be more valuable than the solutions your competitors already offer.
4. Define the People Behind the Business
The next step to creating a successful startup business plan is to define the management structure. Who are the people that will run the company? You need to highlight the strength of your team because potential investors do not just consider the business idea itself — they also want to know that the people running the business can deliver successful results.
Depending on your industry, your startup might include several experts. For instance, a tech startup team might have programmers, marketing specialists, graphic designers, and sales professionals. Highlight the value each member brings to the business. Suppose that you do not have a team yet. In that case, you can discuss the key attributes you might consider in future team members.
Creating an organizational chart that defines the management structure is important. As a startup, you might only have a few team members, but creating a graphic that shows a visual reference of what the organizational structure will look like can prevent any debates on the responsibilities of everyone involved in the business and who reports to whom.
5. Create a Marketing and Sales Strategy
No startup business plan would be complete without outlining the marketing and sales strategies you plan to use. Your business plan must include how you intend to promote your business and engage prospects to convert them into paying customers.
It is important to understand the difference between marketing and sales strategies. Marketing is how you promote your business and the products and services you are offering. Sales channels are the mediums you will use to enable customers to purchase the products and services after marketing to them. You might have just one sales channel when you start your business, like an e-commerce platform. Your business plan should explain the sales channels you intend to use.
Your marketing strategy must outline how you plan to acquire the customers your business will sell its products and services to. Your marketing plan can include several things, depending on your industry, but almost the marketing plan for every startup should include:
- Creating a company website
- Strategies to get organic traffic
- Strategies to get paid traffic for immediate exposure
- Developing channel partnerships
- Creating an email list
You do not need to create concrete marketing and sales strategies in a business plan — it should define a well-researched approach to them. Your startup business plan’s marketing and sales section should also consider several factors, including market risks, goals, and budget. This brings us to the final stage of writing a startup business plan.
6. Create Financial Projections for Your Startup
Last but not least, a well-written startup business plan should include details about your budget, sales goals, and financial projections. The financial plan is the most intimidating part of writing a business plan. There are no balance sheets, cash flow reports, or any revenue that you can use to create the projections.
However, entrepreneurs who take their time to conduct market research can make educated projections. The financial plan for your startup business plan should include details of several aspects, including:
You need to define how your company will generate revenue. Your startup’s revenue streams can vary drastically, depending on your industry and the products and services you intend to offer.
For instance, a tech startup offering cloud-based software solutions for supply chain companies might rely on a subscription-based revenue stream. And if yours is a product-centric service, your revenue streams could be based on selling through e-commerce platforms and/or through brick-and-mortar stores.
You know how your company will bring in the money, but what expenses do you expect to face for your business in the first few months or the first year? The actual costs when you start operating your business might be higher or lower than expected, but your business plan must highlight all the expected expenses, including the team’s salaries.
Outline the financial milestones you expect to achieve considering the revenues and expenses. You should also factor in expansion strategies and how they might impact the finances in the future.
Your financial projections should keep a view for long-term success, but you should not be too ambitious with them. Keeping your projections realistic based on your market research can give you a better perspective for your startup’s success and ensure that you do not set your investors and yourself up for major shocks down the line.
Do You Need Help Writing a Winning Business Plan for Your Startup?
Launching a new business is exciting, and a good business plan is a powerful tool that can help you start your business on the right foot. It can be the key predictor of your company’s future success and give potential investors a compelling reason to fund your business.
Do you have a great business idea but not the time or experience to draft a well-structured writing plan? You might want to consider hiring business plan writing services.
Content Development Pros has a team of experienced business plan writers who have been drafting business plans for clients across a wide range of industries. From startups to large businesses, our writing team has an excellent track record for delivering stellar business plan drafts that align with our clients’ goals.
As an entrepreneur, we understand that you have several responsibilities that will keep you too busy to pull off writing a great document. Working with us means that our team will work closely with you to understand the intricacies of your business idea. We will then pair you with an industry-expert writer who can perform the necessary market research and deliver a professional business plan that fits perfectly with your vision.
You can focus on laying down the foundations of a strong startup and let professional business plan writers you can trust write a successful business plan for you.