The Business Plan
The single most valuable document for any startup is a business plan. Just why is this document so important for a start-up? Because the act of preparing one requires you to think through your entire business and make sure that your strategy and plan make sense. Preparing a business plan will help you find your focus, define your marketing strategy, conduct industry research, plan the financials, and understand your competitive advantage. Once you’ve done that, you are ready to pitch to investors, venture capitalists and banks. Your business plan, or a summary of it, often known as a “Pitch Deck” would be the tool that you send to potential investors. So preparing the business plan will ultimately help you get funded.
Creating a business plan is not as difficult or boring as it may seem. The main elements of the business plan are the following: An Executive Summary, A Company Overview, an Industry & Competitive Analysis, a Customer Analysis, A SWOT Analysis, A Marketing Plan, Operations Plan, Management Team, and Financials.
Your Executive Summary is the first page of your Business Plan but would be completed last because it is the summary of your entire plan. It is your opportunity to capture potential investors’ attention. Make it as visually appealing as possible using graphics to tell your story.
After the Executive Summary, your Company Overview is the next opportunity to tell your story. This section discusses who the founders and employees are as well as the unique strengths that they offer this business. Share your passion, excitement and vision here. You will also discuss the business’ history, accomplishments, legal structure and goals in this section.
Your Industry & Competitive Analysis comes next. This section provides an overview of the market that your business targets. This is where market research comes in handy. Discuss size of the industry, industry segments and which segment you hope to capture with your business idea. Here is where you define who your competition is and what their market share is. Use numbers, percentages and graphs to help tell your story. Gathering information here will help you formulate a better strategy for success.
Customer Analysis is where you define your target market segments and all of their demographic needs. Who is your business’ ideal customer? Where are they? What is their age, income, education, preferences, how do you find them? There are many different variables you can use to gain a better understanding of your target customers. Go to town in this section since the better you understand their needs and habits, the more likely you are to build a product and business that satisfies them.
The SWOT Analysis is my personal favorite strategic tool. Here you identify your business’ strengths and weaknesses and the market’s opportunities and threats. The result of this strategic exercise will leave you with a clear definition of your business’ competitive advantage. In other words, use your SWOT to explain how you can effectively compete with and beat out your competition.
The next section is your Marketing Plan. Traditional marketing plans consist of a definition of your four P’s: Product, Price, Place, Promotion. Modern marketing plans include a traditional as well as a digital plan: website, SEO, blog, social media and analytics.
The Operations Plan discusses key operational processes, as well as your goals and benchmarks. Here is where you would present a production and/or editorial calendar, projected sales plan, development processes and so forth.
The Management Team section is your opportunity to show how you have hand-picked only the highest quality professionals to join your team. Here is where you discuss their education, experience and share their passion and why your team is uniquely qualified to best do the jobs they are assigned. Staff members, board members and gaps are identified here as well.
The final section is the Financial Plan. In this section you will have the opportunity to work out all your numbers: pricing, costs, revenue projections, and funding needs. This section should include a revenue model explaining what you sell and how you will make money, financial highlights and your budget projections. This is also where you would be able to present your funding needs and uses. This section should be visually appealing and consumable. If the Executive Summary managed to capture a potential investor’s attention, they may very well jump straight to the Financials section so make sure to make it paints you a stunning picture of profit potential.
Business Plans are fluid, they will grow and change with your business. Your final product may look vastly different from the initial plan. That’s okay, successful entrepreneurs always know how to pivot and keep things moving forward. A well thought-out initial business plan, though, is the best way to guarantee that you have the vision, maturity, talent and stamina that it takes to build a successful business. Creating one provides you, the new business owner, with a tremendous learning opportunity. The prize at the end of the process is a much greater chance of not only success but also getting the funding you need to keep things moving forward.