Anyone can have an amazing idea that can sell. However, turning this idea into a viable business is very different. You might think that you can launch your own startup company because of the idea, and this is awesome and exciting news!
But before you begin getting legal advice, renting out office space, or even forming LLCs, you should first put all of those thoughts and details on paper. Doing this will help you keep focused and organized with what you want to achieve in the business.
This is what we call a business plan. With a well-written business plan, you can share it with others, receive valuable feedback, and even gain capital from potential investors.
But where can you start? Check out these tips and steps to follow when writing a startup business plan.
1. Have a Clear Objective
When you write your company description, it should NOT be ambiguous.
This part should identify who you are and when you’re planning to go into the business. Talk about the products and/or services you’ll offer and the industry you are part of.
Also, include where you plan to operate the business in if it will be an online and/or physical store, and a local or international one? You can incorporate your company description with the mission statement as well.
Doing this will give you the opportunity to understand your startup better. The summary will have you set clear objectives, as well as show people what kind of company you have and the way you operate.
You should also include why you are going into business, discussing your startup’s vision and future. This doesn’t need to be so detailed, as you’ll cover this in-depth when writing the rest of the business plan.
Again, this is only a summary, so you don’t need to write a lot. 3-4 paragraphs are enough.
2. What’s Your Target Market?
Your business won’t be for everyone. This is why you need to identify your target market, which will require market research. Market research is one of the most crucial parts of any company.
After all, it’s logic! Without a viable market for a business, the company fails.
When figuring out the target market, begin with broad assumptions, narrowing them down as you go. You can segment the audience with these four categories:
- Behavioral
- Demographic
- Geographic
- Psychographic
Begin with factors such as the audience’s ages, genders, locations, ethnicities, and income levels. The plan needs to talk about the research conducted to identify the target market, which should be based on interviews and surveys. This information will be used throughout your business plan, along with discussing your marketing strategy and future projections.
3. Analyze the Competition
Besides identifying your target market, you should also conduct a competitive analysis. The goal is not to be like the competitors, but to know who they are and stand out among the rest.
If you remain the same, don’t expect your business to grow, as customers won’t find any reason to head to your brand when it is similar to companies they know and trust already.
Through competitive analysis, you can create a differentiation strategy. Such strategies can involve product or service price and quality.
Make sure that you conduct competitive analysis alongside target market research. After identifying your competitors, you can learn what to do to show how your company differs from them, though this will also be based on your target market.
4. Work on the Budget
Of course, you have to crunch those numbers and know exactly how much you’ll need to start your business. This is an important part as well, especially for those who want to secure investment funds.
Know exactly how much is need or you will end up running out of money and most likely receive rejections from investors. Consider EVERYTHING you need to start and continue your business operations, which include:
Keep these numbers accurate and if you are in doubt, it’s best to estimate higher and give yourself some leeway.
5. Identify the Goals and Projections
Let’s continue the financials. You won’t have any balance sheets, cash flow reports, or income statements if you aren’t fully operational yet. But what you can do is make financial projections.
You can base the projections on the total population of your target market and how much of that you can penetrate. The projections need to cover the first 3-5 years of the business and make sure these projections are reasonable.
6. What’s the Power Structure?
Business plans should always include the startups’ organizational structure. For small companies, it is easy.
However, if you plan to scale the company, it’s better to sort this out as soon as possible. You need to have a hierarchy in place before starting out to avoid debates about positions and power.
You don’t need to be complex when it comes to power structures, so avoid putting a lot of management levels up there, which is confusing.
Wrapping It Up
These are the important parts to include when creating a business plan! Of course, you will still need to hash things out and put things into more detail but once you have these factors in mind and ready to add to the plan, things get smoother from here on out.
Keep your business plan short and professional, and you can begin the process of gaining investment funds to operate your business soon. Good luck!
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