There’s a common misbelief that startups are built only around the idea. Of course, it’s not the case. Successful startups understand how to bring this idea to life and make it look best. One of the main tools for this task is a business plan. Understanding a business plan is incredibly important since it helps to clearly define the development strategy, attract investors, and figure out the app development budget. Therefore, in this article, we will discuss a business plan example to help you understand more thoroughly!
As we have a wide experience of working with startups, we know for sure that planning won’t hurt your project. So, let’s discuss a business plan example and demonstrate how you can make a business plan.
Step 1: Make an Executive Summary
This is the first and most important step in creating a business plan. The main advice here is to keep it simple. Investors and partners won’t be happy to read walls of text.
Here are the steps that should be described in this part:
Determine the Problems you Solve
If you have an idea, it probably solves some particular problem. So, describe what is the problem and search for the existing solutions on the market. A good idea is to view a business plan example, find some solutions and try to find their drawbacks.
Here are three main questions for measuring the problem:
- What problems are bothering your audience?
- How serious are these problems?
- How do they solve these problems now?
Present your Solution Correctly
Here you should depict your solution in the best light. Don’t describe every feature in detail and what technologies they use. Instead, explain how exactly your solution helps to solve the problem mentioned earlier.
Discuss Your Unique Selling Proposition
Make your customers believe that the provided solution has obvious benefits that meet their needs, and no other company can offer the same. This technique is called a unique selling proposition. It should explain why your offer is the best among the others on the market. Don’t directly state that your company is better than the others. It will sound ridiculous from an aspiring startup.
Consider Your Goals
Your goals are of interest to investors because they can compare your goals to theirs, and decide whether to invest in your project or look for something else.
To gain investor’s favour, you have to state a definition of success for your startup clearly. It may be a number of active users, revenue, or else. Focus on short-term goals rather than long-term. Investors are afraid of risks, so precise short-term goals inspire more trust.
Step 2: Describe Your Company
This part should briefly describe your company. So, include general company information, something about your team, management, etc.
Firstly, say a few words about the current state of your company. Tell what kind of corporate entity your company is. Further, mention your working conditions (location, place your team works from) and team situation.
The next step is to tell your company’s story. Explain how the idea was born and your motivation to breathe life into it. Mention your team’s expertise by citing previous projects and phases your team went through till the current moment.
The final action at this stage is to describe your monetization strategy. One of the common difficulties for early-stage startups is earning profit. Obviously, a well-prepared monetization strategy will help to overcome this obstacle. This step will help both getting investments and staying afloat.
Step 3: Market Research
To launch a successful startup, you have to analyze your industry wisely. The following points will give you an understanding of the market research process.
Identify Your Target Market
According to statistics, the lack of demand in the market is the most common reason why startups fail. Your idea may look great on paper, but all the expectations may fall apart on the release stage.
To avoid failures, you have to research and categorize your audience. Here are three categories to segment your users:
Also, consider the following criteria:
- Income level;
Results of your research may look like this:
- North America;
- 30-45 years old;
- Average annual income of $45,000-$55,000.
Identify Your Rivals
Before building the product, conduct competitive research. If there will be a lot of rivals, and you have no standing-out features, chances are the startup will fail. There are two ways of dealing with competition:
- To occupy a fresh niche without competitors.
- Take over the audience with unique features that no one else can provide.
Also, analyze the rivals themselves. Find out how they manage to capture the audience’s attention and turn this information in your favour.
Add Market Forecasts
Today, businesses heavily rely on market research. It can provide you with information about the viability of your idea. Consider statistics, like revenue growth in your industry, an increasing number of companies, the amount of investments in your field, etc. This information will be a good addition to your business plan. However, make sure that you use information from reputable resources.
Conduct a SWOT Analysis
SWOT means Strengths, Weaknesses, Opportunities, and Threats. This approach allows you to look at your company from different angles, find weak spots, and eliminate them. The SWOT analysis shows investors that you’re putting efforts in risk minimization.
Step 4: Draft a Tech Startup Market Plan
Your marketing plan should correspond to everything mentioned above. Also, be honest with yourself and investors in the ways you will achieve goals.
Develop a Customer Acquisition Strategy
Here you have to describe the main strategies of attracting a new audience. Overview each marketing channel (SEO, PPC, Product Placement) and all the tactics you’re going to use.
Determine how to Increase Growth
The majority of services depend on a user base. The more users you have, the more income you gain. So, if you need to draw the audience, you should find ways to engage it.
The first thing that comes to mind is a referral program. Giants like Uber and Airbnb encourage both users who use a referral program. It’s a great way to stimulate users to attract their friends.
Find and Focus on the Metrics
Marketing includes a large number of different metrics. However, you don’t need to use all of them. Instead, define the ones that meet your business needs and specify them in your business plan.
Step 5: Come Up with a Financial Plan for Your Startup
The financial plan has a strong influence on investor’s decision. The following steps will help you explain to stakeholders what they are spending their money on:
Estimate the Expenses
Your estimates should be precise and cover some additional expenses that may appear during development. Each object of expenditure should be taken into account:
- Equipment expenses;
- Renting or buying property;
Payments can be divided by frequency (Once for the whole project, once in a month/week/etc.) and stability (fixed or variable price).
Summarize Your Requirements
To build a complete picture, you have to cover the following points:
- The full price of development;
- The income percent that you will pass to investors;
- How many investment rounds you will need.
As you see, startups aren’t just about the idea. There’s a lot of things to consider, so be sure to take a have at a business plan example, practice creating one yourself, and approach this process wisely!