Business plans can be a long, and hard process, yet they are crucial to the initial planning and eventual success of your business.
Why is a startup business plan so important? Well, for instance, it can help you to not only understand the current situation in the marketplace, identify your company’s missions and values, and outline a marketing strategy, but it can also help you research your competition.
And while, it is a tedious process, especially for those not certain where they should start, it can be made easier going step by step.
7 Steps on How to Write a Startup Business Plan
- Define Your Mission, and Values
- Write a Short Summary
- Set Goals and Milestones
- Analyze the Market and Find Your Target Audience
- Develop Partnerships and Outline Your Business Structure
- Set a Marketing Strategy and Budget
- Be Flexible, Know How to Adapt
1. Define Your Mission, and Values
The very first thing you need to do is to define the values, and mission of your company. In case you’re wondering what this is supposed to mean exactly, here are a few examples:
- The mission statement of Tesla is “To accelerate the world’s transition to sustainable energy.”
- PayPal’s mission statement is: “To build the web’s most convenient, secure, cost-effective payment solution.”
- Amazon wants: “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
- Focus on the user and all else will follow.
- It’s best to do one thing really, really well.
- Fast is better than slow.
- Democracy on the web works.
- You don’t need to be at your desk to need an answer.
- You can make money without doing evil.
- There’s always more information out there.
- The need for information crosses all borders.
- You can be serious without a suit.
- Great just isn’t good enough.
- Customer Obsession
- Invent and Simplify
- Are Right, a Lot
- Learn and Be Curious
- Hire and Develop the Best
- Insist on the Highest Standards
- Think Big
- Bias for Action
- Earn Trust
- Dive Deep
- Have Backbone; Disagree and Commit
- Deliver Results
In other words, your mission statement should explain to the world what your company wants to achieve; a company’s values are all about what matters most to you, as an organization.
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2. Write a Short Summary
Now that you’re done with establishing your values, mission, and goals, the next step in creating a business plan for a startup is to outline a short summary of your plan. For instance, the pain points of your customers and how you plan to solve them.
Make sure to keep this section short and to the point, and avoid any confusing or unclear statements. In short, this should be where one can immediately understand the most crucial information in your business plan.
3. Set Goals and Milestones
Business goals are the targets and accomplishments you want to achieve. They can be either short term (less than a year) or long term.
Setting such goals and milestones are important, since it helps you measure your progress, improve decision-making, and establish accountability, to name a few reasons.
Here are a couple of examples of goals and/or milestones:
- Increase revenue by 15% in the first year.
- Reduce the sales cycle from 6 months to 3.
- Adjust and optimize product/service pricing according to competitors.
- Find new channels to market our products/services.
Additionally, business goals can be divided into separate categories:
- Financial goals. Increase revenue, and profit, decrease costs.
- Process goals. Increase the number of software releases, optimize workflows.
- Employee goals. Retain employees, career development, work-life balance.
- Social goals. Environmental concerns, sustainability, diversification.
- Time-based goals. Set a timeline to complete both long and short-term goals.
- Growth goals. Release new products/services, acquire new customers, enter a new market.
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4. Analyze the Market and Find Your Target Audience
Next on how to make a business plan for a startup, is analyzing the market situation, and establishing who your target customers are. It’s essential to the success of your startup. You need to understand if the products/services you plan to offer are a good market fit, and whether there is a demand for them.
For instance, if there is only a very small group of people that are interested in what you offer, you may end up experiencing financial difficulties. It’s always a good idea to think about these things before you’ve launched your product/service.
5. Develop Partnerships and Outline Your Business Structure
No one said you should fight the battle alone. Developing partnerships with other companies can be of great help to your startup. For example, sharing resources with a partner, could decrease your overall costs.
Setting up your business structure also means that you are establishing the company’s hierarchy and defining who is in charge of what. This makes it easier for everyone involved in the company to know who is responsible for each section. It can also improve performance.
A well defined business structure also makes the process of communication, and evaluating team performances much more efficient, breaking down the work into smaller chunks where each department knows what it has to do.
6. Set a Marketing Strategy And Budget
In order to create a business plan for a startup, you can’t miss out on marketing. The marketing strategy you choose, and how you execute it, is a crucial part of the success or failure of your business.
In general, the types of marketing strategies are:
- Public Relations
- Content Marketing
- Email Marketing
- Inbound Marketing
- Social Media
It’s safe to say that you can’t invest an equal amount of time and effort into all of these channels, so it’s best to pick a few and focus on them.
Over time, when you track their efficiency, you can decide, based on results, whether to change any of the strategies you have selected, or add new ones to fortify your brand positioning.
Setting a budget is also important, because it outlines your initial investment, which you can then measure (otherwise known as ROI).
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7. Being Flexible, Know How to Adapt
As a final step in today’s “how to” guide, you should remember that nothing stays the same. Being flexible and knowing how to adapt are great skills to have in today’s business world. That should also apply to your business plan – as it will evolve over time, and that’s completely normal.
Anything, in practice, can happen, as the past few years have shown us. So, set your goals, and strategy, follow them, but always be prepared to react accordingly.
Writing a startup business plan is a very important process. By establishing who you are (values and mission), understanding the market, your audiences, and competitors, picking a marketing strategy, and outlining your business structure, you will have a solid foundation on which to develop your business.
Of course, since everything is constantly evolving, your business needs to be open to change and always be prepared to face any obstacle head on.