But, before you get ahead of yourself and start searching for investors, you will need to outline your business plan. The plan for your startup needs to stand out. The first and most important step to starting your business is outlining what you’re going to do and how you’re going to do it.
Quick note: If you would like assistance along the way as you plan your business, check out our roundup of the 7 best business plan software tools.
When preparing to write your business plan be sure that you have outlined in detail the seven major sections investors will require of you before they hand out any startup capital or loans.
Each section of your business plan will be just as important as the other which is why it is detrimental to understand your business from front to back, side to side, and top to bottom including its structure, or type of operation.
The very first page of your business plan should be a formal title page that says nothing else but the name of your company and your personal contact information. Keep it professional looking by not using any sort of fancy type-facing, be sure it’s double spaced, with a font no larger or smaller than a ten or twelve point font.
A short and to-the-point, descriptive summary of your business, or a business objective should follow your title page and should be no longer than approximately a half page.
It may be easier for you if you think of providing a synopsis of your entire business plan to investors as building a resume. You will need to state your business objective clearly, mention your short-term and long term-goals and also show how you plan to crunch numbers and bring in a profit.
Your plan should be easy to read and you must be concrete with your words in a way that does not sound indecisive because investors want to be able to understand at a first glance of what your business’ needs and capabilities are.
After you have briefly described how you plan to contribute to your chosen industry, you will then need to provide some information related to the competition you’re up against.
If you have the research to prove how your competition is succeeding in the market, it is especially important when seeking funds to mention any new products or a development plan that will benefit the customer and will allow them to see you as unique.
Investors want to know if your business can stand out from the crowd in a competitive market. They will also want to know that you have based all of your observations on reliable data so they can determine for themselves if your information and your business will be financially dependable. Investors are not likely to risk money on assumptions.
Your business summary should talk how you are better above all competition, who your exact audience is, how you plan to promote, advertise and distribute, and also what your customer service guidelines will be.
Be sure to explain all factors that will make your business successful in a market that is ready for you to emerge.
The second section you will need to include in your startup plan will define your market strategies. Before you present this type of information you will need to thoroughly become familiar with and define your market.
Investors will want to know how you plan to establish pricing, handle the manufacturing of your product, and also any promotional strategies that will allow your business to become profitable among competition.
This will help investors put together indications of your growth potential within your specific industry and if, or not, your profit can cover all costs. Your written marketing strategy should identify how you have paid close attention to your demographic and should also mention the size of your market, its structure, growth prospects, sales potential and fluctuating trends.
If you already know how you will move your products from the factory to your customer, be sure to mention this as well. With your distribution strategy already formed and ready to go, investors will expect for you to have a promotion plan to coincide. This includes any ways you plan to advertise and how the advertising will be budgeted, as well as your creative messages, sales slogans, logos, trademarks and also a description of your packaging.
Moving on to page three of your startup business plan, it will be important to mention the identification of your competition after you have explained your market analysis. Investors will want to know what provides your business with a distinct advantage among a sea of competitors who may be producing in similar ways.
You may start by identifying your current and potential competition. Take a closer look at your industry from how the customer would view it. How are your competitors demanding the consumer’s dollar? What are some strengths and weaknesses regarding their strategy?
Understand also what motivates your competition and what their vulnerabilities are. In this section of your business plan it is imperative to show investors you have the skills necessary to succeed as a business owner, how you will accomplish your goals, and also why or how your marketing strategy will work.
The fourth section of your plan should explain your product model design and development strategy. A brief description of your design will be suitable followed by its ‘making of’ procedure.
Investors will be looking for how you will use allocated resources and who will be in charge of accomplishing each various task or goal. They will also want to know how your leaders and staff will interact to produce a product of value.
How will you recruit your talent? Do you know how you will manage a team so that they will be focused on achieving the development goals you have prepared? You will need to clearly communicate to investors all of the above in addition to full employee job descriptions and specifications of positions that will need to be filled.
Following your design and development plan, a separate section explaining how you plan to run your business overtime will be required. This part of your plan should highlight logistics and responsibilities of your management team and any expense requirements you will need before your operation has begun.
This is where it gets tricky. Finances in a business plan are looked through with a fine tooth comb and will likely be scrutinized by investors.
You will need to be clear and realistic with your financial needs. Be sure to mention any overhead expenses for things such as travel, maintenance, equipment, rent, utilities, advertising or promotion.
Financial data is generally the last section of any startup business plan for reasons being that investors would rather become intrigued with your ideas before they make any decisions concerning capital.
You will need to state a total amount of funds necessary to purchase items for establishment or to continue your business operations. Investors will be seeking a hard copy of how your business pays current incoming bills as well as its potential to further profit in the future.
A good rule of thumb when adding finance charts to your business plan is to only provide an income statement, cash flow statement and a balance sheet. If you feel in any way uneasy about accidentally publishing or providing investors with incorrect numbers related to expenses, it may be a good idea to seek professional financial advice when determining this matter.
Now that we have outlined the technical way of creating a plan for your startup, we can look at some similar options for more clarity. We recommend that you give both of these options a shot to see what works best for you. After all, it is YOUR business.
LivePlan is one of the easiest and most efficient ways to create a thorough business plan. It helps guide you through the complex process of planning your business goals from start to finish by giving you the option of taking a smarter, alternative route toward success. You can read more about LivePlan by visiting our review.
Enloop is an awesome business planning tool that focuses on the basics of an effective startup plan. While it is not nearly as extensive as LivePlan, it is free to download and very convenient while at your fingertips. Check out our review for more info.