This article is part of our Entrepreneurship and Startups resource section
Smart Business Plan Tips
In your head, you’ve got your business plan all together. You’re going to do this, that and the other, and you’ll be on your way. But alas, it’s not that simple. You’re going to need to put your vision to paper, both for yourself, and others. Here are some smart business plan tips to get you going.
If you are still shaping your overall business concept, it helps to understand what goes into building a company from the ground up. A practical overview of the startup company process can help you connect your business plan with the broader decisions involved in launching and developing a new venture.
What is a Business Plan?
Let’s start there. Basically, a business plan is a formal document that outlines a business’s goals, and strategies and timeframe for achieving them.
For founders who are preparing a plan specifically for a new venture, a detailed business plan for your startup can provide a useful framework for organizing the idea, market opportunity, operations, and financial expectations in one document.
Why Do I Need One?
Well, such a plan can help you get funding. Sort of important, yes? It can also serve as a guide as your business grows and can help you reach business milestones. In addition, a business plan can be used to:
- Show that you’re serious about your undertaking.
- Understand your competition better.
- Gauge the feasibility of your endeavor.
- Show how your business will make money.
- Minimize opportunity costs.
- Force you to know your market.
- Lure partners and a top-notch management team.
- Position your brand.
- Discover even more opportunities.
A strong plan should also account for areas that may become increasingly important as the business develops. For example, understanding the rise of legal tech startups can help founders recognize how technology is changing the way businesses approach legal services, compliance, and other administrative requirements.
Business Plan Contents
When checking out sample business plans, you can see that while everyone’s document is different, they all include certain items in their 20 to 50 pages:
- Executive summary. You want this to be tight and to the point. The document should be one four pages long and should be able to stand on its own, really. It should summarize the main items that are delineated in each section of your plan.
- Overview. Here, you’re basically describing your business. You’ll cover the business type, how it’s structured under the law, how the business came to be, where the business is located, and whether you’ll be conducting business through the Internet, mail order or a brick-and-mortar store.
- How the business will function. This is your operations plan. You’ll describe the physical setup and all responsibilities for all tasks.
- Market overview. Here, you’ll present an overarching look at the market, buttressed by data. You want to define your target market and how you expect to reach it.
- Describe what you’re offering. This is where you discuss the product or service being offered.
- How you plan to sell. Sales and marketing info go here. Talk about why your target audience will purchase what you’re offering as well as what marketing and advertising efforts will be used to reach it.
- Competitive analysis. In this section you’ll break down your direct and indirect rivals, analyzing the strengths and weaknesses of each.
- Key players. Concisely list all major players on your business’s management team.
- Financial info. This is a biggie, obviously. In your financial plan, you’ll need to include all financial data. That means how much you need to start or maintain your business, how much will be required to cover the next two to five years, how you’re going to use the funds, anticipated needs for extra funding, and ongoing expenses such as salaries and insurance.
- Projections. In this section you’ll provide projected income statements and balance sheets for up to three years.
Technology can also influence the way a business operates, particularly when technology is part of the proposed product or service. Reviewing examples of AI startups with great potential can provide context when thinking about technology-driven opportunities and how they may fit into a broader business strategy.
Your plan should also explain how you intend to attract and communicate with customers. A clear content marketing strategy for a startup business can help connect your marketing objectives with the target audience, channels, and resources outlined in the plan.
If your business depends on technology, be specific about how that technology will be created, maintained, and funded. Understanding the considerations involved in custom software development for a non-tech founder can help you account for development costs and technical requirements before committing resources.
Financial projections should be supported by realistic assumptions rather than guesses. Using data analytics in startups can help a business organize information, evaluate performance, and make more informed decisions as actual results begin to differ from initial projections.
Your business plan should also consider how the company will present itself to customers. Branding is another practical consideration, and the process of designing a startup logo online can be included when estimating early branding requirements and establishing a consistent visual identity.
People and administration are equally important to the operating plan. If you expect to hire employees, consider how HR software can reduce administrative burden for startups and how those systems may affect your staffing, payroll, records, and operational processes.
Be sure to back up your business plan with any documents such as resumes of leadership team members or news articles that feature you and your startup.
With these smart business plan tips, you can put forth a rock-solid document that will not only keep you on track but will help others – especially potential funders – understand what you’re doing.
Here’s to your success!
