You just got a great business idea? Good for you! Now you need to turn it into a business that will continue making profits for many years.
Before you begin gathering documentation, founding an LLC, or renting offices, you need to come up with a business plan and put it on paper. Creating a business plan will help you stay focused and organized, track your progress more easily, and increase your chances of attracting investors.
8 Tips to Help You Create a Successful Business Plan for Your Startup
Determine the Format of Your Business Plan
Your business plan is a marketing document that serves the purpose to convince others to invest in or otherwise get involved in your startup. It should explain why your company is qualified for success, include figures and facts, a growth plan, as well as realistic financial projections. In other words, your business plan should present your business in the best possible way and for that reason, it needs to be clear and well-executed. You can use Google Sheets, a free business plan template, or tools like Panoply.
2. Use Charts to Present Data
Panoply is an AI-driven cloud data platform that allows you to turn any siloed data into insights in minutes, without additional data engineering resources. Panoply also makes it easy to integrate with Chartio, a tool that allows you to create colorful analytic charts from many data sources. This BI tool has built-in ETL functions that upload your data, transform it, and output it in real-time to your charts. You can even visualize and explore your MongoDB data in Chartio analytics.
3. Set Clear Goals
Begin by writing a company description. This will give you a chance to better understand your startup and force you to set clear goals.
When writing your company description, you need to avoid ambiguity and be as clear as possible. Here’s what your company description should contain:
- Determine who you are and identify what services or products you’ll be offering.
- Identify the reasons for going into business.
- Determine where your business will operate: will it operate online, in a brick-and-mortar store, or both? Will your company be local, national, or international?
- Add a mission statement that will discuss your vision.
Note: You don’t have to get into too many details because the company description is simply a summary and 3 or 4 paragraphs should be enough.
4. Determine Your Target Audience
You might be convinced that your idea is awesome, but not everyone will be interested in your services. You need to clearly identify your target market and for this purpose, you’ll need to do market research.
Use the following categories to help you with audience segmentation:
Consider the following things
- income level
You should also include a discussion about your research into your business plan. Mention the interviews and surveys that helped you to collect the data, as well as your marketing plan and future projections based on research results.
5. Analyze Your Competitors
Besides your target market, you’ll also need to research your competitors. When you’re in the stage of creating a business plan, no one knows about your company yet, so the worst possible strategy is to launch a company that is similar to the competitors’.
You need to find a way to stand out and convince people to do business with you. Are you offering superior quality? Or maybe your prices are lower? These are the things that will set you apart.
This analysis should be done at the same time with the target audience research because who your competitors are will depend on your target audience. Once you identify your main competitors, it will be much easier to figure out how your startup will differ from them.
6. Plan Your Budget
When creating a business plan, you need to know the amount of money you need in order to start and run your business; otherwise, you may run out of cash. Taking some time to structure your financials will minimize this risk.
Here’s what you need to take into consideration:
- property costs (leasing or buying)
- legal fees
Make sure the numbers are accurate but if you’re in doubt, set the estimations higher. That way, you’ll have some extra money set aside in case of an emergency.
In addition, you should make financial projections for the first 3-5 years. These projections should be based on the target market population and they need to be reasonable. For instance, your desire might be to make $1 million in the first two years, but bear in mind that many companies aren’t even profitable in the first few years.
7. Define the Organizational Structure
The organizational structure of your company should also be included in your business plan. If your startup is small with just you and another partner, this should be fairly easy. But keep in mind that, if everything goes well, your company will grow and more people will come, so it’s better to set the company hierarchy before your startup launches. That way, it will be clear who’s in charge of certain departments and people, as well as who has the ultimate authority to make decisions.
8. Talk About Your Marketing Strategy
Your marketing strategy depends on everything mentioned earlier in this article. How you’ll attract customers will depend on your target market and competitor analysis. Your budget is also an important factor.
When it comes to selecting the best marketing approach for your company, there is no right and wrong, but try to choose cost-effective marketing tactics, at least at the beginning. Don’t invest the whole marketing budget on a single marketing strategy. Be versatile and experiment to see what works best for your company.
Here’s are some basic marketing strategies you should take into consideration:
- launch a company website
- be active on social networks
- build an email list
- build customer loyalty programs
Start marketing your startup even before it officially launches. You don’t want potential customers to hear about your company but then not be able to find your site or contact info.
Launching a startup is great but excitement can easily prompt you to make rushed decisions.
If you want to be successful, you need to take some time and plan everything properly.
Creating a business plan might seem like a complicated and cumbersome task, but it will keep you focused and organized in the long run. It will also help you figure out whether your business is actually viable, improve your potential growth rate, and boost your chances of securing investment.