Your biggest strength when building a startup is working on a business plan. Software business plans can be 20 to 30 pages long. It can also be 10 pages long, as long as it everything you need to make sure your business not only survives but thrives once it launches in the market.
Without a business strategy, you may have a brilliant idea for an app or a business, but it may be short-lived. 17% of startups fail during the early stages because they do not have a viable business plan.
You may have done your homework on the market, on your audience etc. But it is equally important that you structure it into a strategy that applies to your goals.
Check out some of the vital elements of a great business plan that notable startup venture studios always incorporate for startup investment opportunities.
An Executive Summary
An executive summary is crucial when you are pitching your business to investors or simply want the marketing department to understand what your startup is all about. Like we said before the reader commits to the dozens of pages ahead, they should have something to intrigue them to it. Venture capitalists are often busy and have a roster of candidates for startup companies to invest in who they have to hear out next. Your executive summary is the first impression that will persuade them the plan is definitely worth perusing.
The executive summary should talk about your business concept which is what market you plan to cater to, what your product or service is exactly, and what your unique selling point is.
Then you should take a couple of lines to mention impressive financial points of your startup for example, how many units you have sold in the short span of time you have introduced the product. This must be followed by how much capital you require to grow your startup and what equity you are willing to give in exchange for it.
You should also list a short description of your business’s current standing. You must detail the legal structure of ownership and operation of startup, when it started, and who the principal owners are. You can also list the key professionals that make up your business hierarchy.
A business description should give context regarding the industry you are trying to penetrate. When you are describing the industry make sure you discuss the present outlook as well as possibilities of future growth.
Explain the market and talk about how trends and changes in this market will affect your business. Make sure everything you say is backed by reliable research. A neat way to do this is to add footnotes with sources. This is very important when you are seeking funding because an investor wants to know your plan is based on credible data.
Move on to the structure of your startup. Is it a partnership, proprietorship, or a corporation.
Making sure that you have listed the correct market share is very important. The most painstaking part of putting together is compiling enough market research. The objective is to become familiar with as many factors in your market that you are able to make decisions that you can profit from.
This knowledge also helps you be able to foresee the future of the industry and anticipate patterns.
When conducting market research you should begin with the size of the market, sales potential, and growth prospects. All of the aggregate sales of your competition will give you a close to an accurate estimate of the total potential of the market. You will also be able to assess market segmentation in terms of the attributes of your ideal customer, and geographic location.
After you have researched the target audience, the next step is to outline the feasible market. This comprises of all people who can be converted if the conditions of the market are ideal with very little competition.
Your Business Positioning
Before you can arrive at an answer for this, you must first ask yourself a few questions: What customer needs are you looking to fulfill? What is the positioning of your competitor brand? And what unique features does your product have that nobody else in the market possesses?
When you have arrived at the answer for these strategic questions you can devise a positioning statement that should have its own place in your business plan. This is everything that you want your product to be seen as by your competitors and your customers.
A startup consultant will advise you to find out exactly what the competition is doing. The point of this is to make a list of the strengths and weaknesses of your competitors. You have to see what your competition did in the existing market that worked well for them, and what they did that they failed and how you can do it better. Instead of doing the trial and error process yourself, you get insightful data from a similar business’s experience, as well as further insight on how your target audiences tend to react.
Often times doing a competitor analysis can help you identify an untapped opportunity that you can take advantage of. It is also possible that you are able to identify a kink in their strategy that you can play against by offering the market something better.
When compiling this analysis the first thing you have to do is identify who makes up your direct competition and who does not. It is extremely rare that you would not have a single direct competitor for your business.