A business plan is like a driving guide. It helps you map out your journey and give you an overview of what to expect. Business plans are also crucial in convincing investors, banks, and partners that your business is viable.
There’s no question that a well-written business plan can significantly benefit your startup’s success if done right. Even if you don’t need outside investors, having a business plan can still help you remain focused and organized.
Creating a business plan nowadays is made easier as there are proposal templates you can use. Of course, these templates are just intended to be your guide, and you still need to do all the work of writing the whole business plan. Each plan is unique and specific to a business. Here are some guidelines on how to write a business plan for your startup.
Know Your Mission and Objectives
Your startup’s description shouldn’t be ambiguous. It should convince people that what you are offering isn’t just a dream but a reality you wish to achieve.
A mission statement should provide outsiders a view of what you plan to do and how you will do it. For example, saying that you’re a company aims to sell self-charging mobile phones isn’t going to cut it. Instead, your statement should answer the following questions:
- What do you hope to change with your product or service?
- What makes you different from other products or services?
- What are the things you need to operate?
- Who are your benefactors?
- What problem are you solving?
The first part of your business plan should also include your company description. It should detail how and where you will be operating. However, there’s no need for you to go into much detail as these will be covered in the later parts of the plan. Keep it under four paragraphs and make sure your words are concise.
Identify Your Market
Your target market will determine if your venture will succeed or not. It’s going to make you or break you in the most literal sense. The more you know about your market, the more you’ll be able to create products or offer services that they’ll buy.
All too often, startup founders launch a business without first knowing if there’s a market for it. These founders were so focused on their idea that they did not bother to check if it’s viable or not.
When you identify your market early on, you’ll have a bigger picture if there’s a viable market for your products before it’s all too late. It’s better for you to know the viability of your business at this stage rather than finding out about it when you’ve already lost a lot of money.
To do your market research, start with something broad and progress to the specifics. You can begin by answering the following questions:
- How old is your target market?
- What is their gender?
- What is their income level?
- Where are they located?
- Is there a specific group they belong to?
Answering these questions will help you create a customer profile of your target market. You can also use data gathered from interviews and surveys you’ve conducted. Your target market will be helpful for you in the later parts of your business plan when you talk about projections or discuss marketing strategies with potential investors.
Identify Your Competition
Doing a competitive analysis means knowing who your direct competitors are and how significant their market share is. The data you will get out of this is what you can use to differentiate yourself from the competition from the get-go.
No customers will switch over to your business if you’re going to do what others are already doing. You should always be looking to innovate and improve where the others are lacking. This kind of mindset will help you overcome entry barriers. You can start doing a competitive analysis by answering the following questions:
- Who is your direct competition?
- Where are these competitors located?
- How much are they offering for the same product or service?
- How can you differentiate yourself from them?
Both target market analysis and competitive analysis fall under the same roof. Doing the other will ultimately lead you to find out who your competitors are.
Setting Your Marketing Goals and Strategy
In this stage, you should have clearly defined your vision, your target market, and your unique selling proposition. The next step is determining your marketing goals and the following criteria:
- What your product will look like
- The total cost of the product
- Distribution strategy
- Promotion strategy
Your overall marketing strategy should be aligned with your financial projections. Be very specific with your approach as these will translate to your ultimate success or failure. Plan for every eventuality when writing a business plan. This is the very final step of writing a business plan, so acquaint yourself with it so you can easily navigate through each point.
Define the Organizational Structure
Even startups need this as it will make it easier for them to define who has the final say in things. With a lot of external forces coming to you with ideas, you don’t want to be lost with what you’re doing. Even if you’re going to start small with just two to three people, you still need to make sure you and your partners are clear on where they stand when making decisions.
This process is also beneficial when you wish to scale your startup in the future. Being prepared at this stage will not only help you plan out your growth, but it’ll also prevent you from hiring more than you can afford. There’s no need to be too elaborate on this part as having too many layers going to the top can prevent you from knowing problems that can lead you to fail ultimately.
The mere thought of a business plan can be overwhelming, but keep in mind that it doesn’t have to be complicated. Keep your words simple, be detailed as much as you can, and aim for a professional-looking business plan. Also, be sure to proofread it; a simple grammar mistake can create confusion or ward off potential investors. How can they trust you with their money when you can’t even be bothered to make simple editing? More than anything else, what’s important is to take action and to never give up.