Startup Business Plan:How To Start A Business

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Introduction

Are you an entrepreneur with a great business idea that you’re ready to put into action? If so you should have a business plan of your own.

Many people have the dream of starting their own business but never take the plunge. They are either intimidated by the process or uncertain about how to get started.

Starting a business can be an incredibly rewarding experience, but it’s also a lot of work. A well-executed startup business plan is the key to success.

This article will help map out your strategy for launching and growing your company. Here’s what you need to know about putting together a successful startup business plan.

What Is A Business Plan?

A business plan is a roadmap for your business. It outlines your business goals, strategies, and how you plan to achieve those goals.

Your business plan should include detailed financial projections, including income statements, cash flow statements, and balance sheets. It should also outline your marketing and sales plans, as well as your administrative and operational procedures.

A well-crafted business plan can help startup founders to assess the feasibility of their business idea; identify their target market and understand their customers; calculate start-up costs and predict future revenue; develop strategies to overcome potential challenges; and much more.

Different types of business plans are created based on the need or purpose of the business plan.

How Can A Business Plan Aid Your Startup?

A business plan aids both new and established businesses in many ways. The following are some of the ways that a business plan helps a startup:

  • The business plan helps form a structure for the startup
  • It helps in attracting investors for the new venture
  • It helps the management know about the business and work together as one
  • It helps define the goals and objectives of the business as specific metrics
  • It helps the business keep track of the progress it has made toward its goals
  • It provides a base to implement strategies that help in achieving these goals

How We Use Lean Planning

A standard business plan is usually very long and takes a lot of time and effort in order to write it. Another type of business plan, known as the lean business plan is made using the lean planning method. Instead of relying on long passages on different aspects of the business, lean planning allows a way to integrate all the important parts of the business without having to go through the hustle of compiling large data from different sources.

The lean business plan is based upon experimentation. It usually involves testing the product or services of the business with consumers and making modifications based on feedback. This reduces uncertainty and hence reduces the chances of product failure. This also helps in making changes quickly without having to waste resources.

Lean planning usually involves 4 steps to discover the business model that suits your business and use it to manage your startup successfully. The following are the steps involved in lean planning:

1. Creating A Lean Plan

A lean plan is usually a single sheet document that outlines the important steps in running a business. The lean plan includes information such as the following:

  • Strategy: What the startup aims to do
  • Tactics: How the startup plans to do it
  • Business Model: How the business is going to earn money through the tactics
  • Schedule: Who are the ones that are responsible for doing specific tasks in the strategy

In addition to this, the lean business plan also contains information such as the problems in the target market, how the startup will help solve them through its products and services, the ideal customer for the business, potential competitors in the industry, the sales and marketing strategies of the business, the personnel involved, sales forecast, etc. The lean business plan is like a mini version of a standard business plan.

2. Test Your Lean Plan

Once the lean plan is ready, you need to start testing its authenticity of it. Do the customers really face the problem you think they do? Does your product or service really solve the problem for your customers in a way you think it would? Are your target customers ready to pay for it? Are they willing to pay in amounts that can give you profits?

All the questions must be tested out in order to make sure that your lean plan is indeed efficient. A good way to test out the lean plan is by talking to potential customers and having them use the product and services and getting their feedback. Getting this real-time feedback helps reduce uncertainty and reduces the chances of the business failing in the long run.

3. Review The Results

Once you get the feedback on your products and services from your potential customers, it is time to review the results. If the feedback from your ideal customers does valid your questions, then your business is going in the right direction. You can continue to implement the steps in the lean plan as it. If the feedback says otherwise, you will have to look in for deeper questions.

  • Why did the product or service not work to satisfy the customers?
  • Do the customers not have a need for the product or service?
  • Are they not willing to pay the price quoted for the product?
  • Is there a cheaper way of producing the product that will help sell them in a price range that is affordable to the target audience?

All these questions must be reviewed based on the feedback from the customers.

4. Revise The Plan

Once the results have been reviewed the necessary changes must be made to the lean plan. The plan must then be tested out again to see if the changes are working in the right direction to grow the business. If not it must be reviewed again and the lean plan must be revised in a new direction. This is a never-ending continuous process that must be done periodically in order to ensure that the business continues to grow and move forward in the right direction to achieve its goals and objectives.

How To Write A Startup Business Plan?

If writing an elaborate business plan is too tedious, a lean business plan is a good place to start, and as the business grows, more details can be added to the business based on the needs of the business. Using the business plan for gaining investment requires a clearly defined business plan. Hence in this section, we will discuss how to write the perfect business plan for your startup!

1. Clarify The Startup Vision, Mission, And Values

Every startup begins with a goal. All businesses have their own vision, and mission that it likes to achieve. These also define the values of the business. When a business doesn’t know what its values are and what it aims to achieve, it has no definite direction to move towards and hence all functions of the business will be in a haphazard manner. In order for the business to acquire a proper structure, it needs values to stick to. Hence the beginning of the business plan must consist of all the vision, mission, and values of the business based upon which all-important business decisions and strategies will be made.

2. Choose Your Problem And Solution

A business can only thrive when it solves a problem in the target market. A product that doesn’t solve any problem doesn’t last long in the market. In order to create a product or service that lasts for a long time in the market, it has to provide a solution to an existing problem. The key comes in choosing the right problem to find a solution to.

For example, a market might have lots of different products from different companies that work towards achieving the same problem for the target audience. In such a case creating a similar product is not really a good idea since the competition is really high and it doesn’t really give the customers a good reason on why they should choose your product or service over the others in the market.

Whereas if you rather focus on finding what key features you think you could add to the existing product, or what is unsatisfactory about the product to the customers, you gain key insights into what sort of product you can build to sell.

3. Outline The Executive Summary

Once the basic details about the business have been defined, you can begin writing the executive summary.

The executive summary is usually the first passage of a business plan and hence the most important one. It not only introduces the business to the reader but also outlines all the key information found on the later topics.

Most people, especially investors may not have time to read through the entire document and hence decide whether they find your startup worthwhile or not only by reading the executive summary.

4. Develop Startup Goals And Milestones

This is one of the most important steps of writing a business plan that many entrepreneurs fail to do. A business needs clearly defined goals and milestones it wants to achieve. Writing down these goals will help clear the way to find what has to be done to achieve them.

5. Write A Company Description

The business plan must then describe the company in much detail as possible to hear define it and know what the business is about. You must be able to answer questions such as the following:

  • What is the business about?
  • What values does it hold?
  • What does it aim to achieve?

It must also contain other information such as what is the business model of the company, what is the business structure (sole proprietorship, partnership, limited liability company, etc), what industry it belongs to, what are its goals, what is its vision and mission, and who are the people involved in the business.

All this information help gain clarity on what the business is about and helps avoid any confusion later on.

6. Conduct Market Analysis

When it comes to selling a product or service, conducting market analysis and interpreting the data in an unbiased manner is very important for the success of the product or service.

A single market can have different types of products provided by businesses. Choosing s product or service that doesn’t have a large audience or does not give much profit is not a good place to start. In the long run, the business may find it very hard to survive in the industry.

Hence a correct market analysis must be done in order to find out the kind of products or services that are in demand in the industry and will help the business earn profits through it.

7. Develop Startup Partnerships And Resources

All businesses require capital to function. It is especially crucial for a startup in the beginning stages of its development. The business will not gain any profit until it reaches the breakeven point and hence may struggle with matters of money till then. Gaining an investment for the startup through partnerships and other resources is a good way to make the growing stage of the startup easier.

The investment for the startup can be gained through startup grants, startup loans, startup investors, startup accelerators, etc. So clearly define what the needs of the startup are and find a source that will be able to invest in the business and fulfill these needs in order to operate properly.

8. Clearly Define The Power Structure

A business is made up of people doing different jobs at different levels. There is a hierarchy of power and accountability. Hence the business plan must have a clearly defined organizational structure that helps to define who is responsible for what and to who they are accountable.

This helps clear any confusion among the personnel involves and helps the team work together in a harmonious manner.

9. Write A Startup Marketing Plan

Marketing is one of the most important key functions that help in selling a product or service. A good product with bad marketing is a recipe for failure and doom.

For a startup, bad marketing can even lead to failure in launching the product or service. Hence the business must focus on creating a good marketing plan that resonates with its target audience in a way that will induce them to use the products or services provided by the business.

It also defines the brand image of the business to its customers. Hence care must be taken while designing the marketing plan of the business.

10. Budget Accordingly

The various activities involved in the business require money to function properly. With a startup, the capital is usually limited and hence a proper budget must be made to ensure that the startup will continue to function without any obstacles.

All the business activities must be assessed and the budget must be allotted based on the needs and priorities of the different functions involved.

What To Do After Completing Your Startup Business

Completing a startup business plan is a huge task, but the process doesn’t end there. A startup business plan is a good place to start but it has its own drawbacks which can be overcome by doing the following methods.

Expand Into A Traditional Business Plan

A lean business plan helps get things started, but for the business to grow further it usually needs a longer business plan.

The lean business plan doesn’t contain much detail about the various aspects of the business. Hence while looking for investors to invest in your business you cannot use a startup business plan.

Investors and loan providers usually require much more details about your business than what the lean business plan provides. That’s where a traditional business plan comes into play.

A traditional business plan usually involves many pages and consists of information on all aspects of the business in as much detail as possible. As the startup begins to grow you can slowly start adding more information to the lean business plan according to the needs of the business and then create a longer traditional business plan that serves different purposes.

Review And Revise

Although a business plan is created to provide structure and direction to the business, it is not always perfect.

Certain strategies in the business plan may not work, the market research done may not be right, a product can fail, or the business may change its value.

Things are always changing. Hence the business must constantly review its business plan and stick to what is working and remove what does not.

This constant updating is very important in order to use the business plan successfully.

Top Business Plan Software to Write a Business Plan

Sometimes writing a business plan by hand on your own can be very difficult. That’s why numerous business plan software have been created to make your business plan writing process easier.

The following are some of the top business plan software that helps you write a proper business plan based on the needs of your business:

  • LivePlan
  • BizPlanBuilder
  • Wise Business Plans
  • Business Sorter
  • GoSmallBiz
  • PlanGuru
  • BizPlan
  • EnLoop
  • Bplans

Conclusion

Creating a business plan is not an easy feat. It takes a lot of time, effort, and real-time data in order to create a business plan that is viable and reliable.

Despite all the hardships in creating a business plan, it does have a lot of important benefits that overpowers any drawbacks.

A lean startup business plan is a good place to start if you are not sure how to write a traditional business plan.

This post is also available in: English

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