How To Write A Great Business Plan For Your Startup(+Free Template)
When investors get serious about investing in your startup, they expect something more “concrete” than just a good elevator pitch. A generic business plan with all your company information will be making your pitches even tougher.
You need to create a plan that demonstrates your goals and how you plan to achieve them in such a way that it gets investors excited about the opportunity to get involved, and makes them want to help you succeed. But how do you write a good, creative business plan? This blog will walk you through what exactly a business plan is, its importance, and how to create one!
We have also shared a customizable business plan template that you can turn to for help. It will help you get past that first major hurdle with investors: grabbing their attention in a BIG way. Download it for free here.
What Is a Business Plan and Its Importance?
A business plan is a written document that describes in detail the objectives of your business and how you are going to achieve your goals. It lays out a roadmap for the startup for marketing, financial, and operational activities.
While you could use your business plan to attract investors, it can actually be a living document to ensure your performance and growth are on track – if the goals have been met or have changed or evolved. Updating and referring to your business plan regularly can help you remain extra focused and make better decisions. Some other benefits that you can reap from writing a business plan are:
- Understanding your competitive landscape
- Bringing in company wide clarity on business goals & milestones
- Defining OKRs (Objectives & Key Results) for your team
- Getting insights into the demand for your product
- Discovering flaws in your project – short funding or over-optimistic deadlines
In the next section, we will share with you how to write a remarkable business plan, with all the sections that it must contain.
What Your Business Plan Should Include
The sections or chapters of a business plan are often similar between most industries. Here are some sections that should be a part of your business plan:
- Executive Summary – This section is a short synopsis of the entire document. If a reader reads only the executive summary and nothing else, he/she should get a clear understanding of the main highlights of your business. In the executive summary, you can include one to two sentences of the following information: mission statement, product/service information, your target audience, market opportunity summary, financial projections summary, owners of your company, next steps, and vision statement.
- Business Overview – This section should explain when and where your company was formed, how it was set up (If it is a partnership, corporation, or LLC?), what is the problem you are solving, how big is the problem, who needs your solution, how big is the market opportunity, etc. and/or any interesting history attached to it. You can also include how you do business – physical store or online – and your key hires.
- Product and/or Service Information – In this section, you need to explain the products/services you are going to offer and why? What type of product/service is it? Future plans of developing the product? How much does it cost to produce? How will the customer purchase your product? What type of research your company is carrying out or the technology that will be used to develop your product further? Your product and service information section should answer all these questions and help you guide your business strategy.
- Market/Industry Analysis – This is the section where you discuss your market/industry in detail and how your company meets its needs. It presents a bird’s eye view of the industry your company is positioned in and where your company stands in relation to all your competitors. Be careful while showing the statistics – include only numbers that help you illustrate the size of the market opportunity you have, your present customer base, and the potential target audience among other things.
- Competitive Analysis – In this section, you will analyze your competitors. You can answer the following questions about each one:
- Basic information – Where are they located and the stage of growth they are in
- Fiscal traction – how much revenue they generate,
- Market share & their customer base
After you have analyzed your competitors, you need to showcase your unique selling point and how you will get ahead of them.
- Sales and Marketing Plan – In this section, you will cover your strategy for reaching out to the customers, the marketing strategy from brand awareness to acquiring customers. You will present a marketing budget for all the planned activities and the ROI you expect from the same. You can present the key geographic locations you will introduce your product in and how would you acquire customers there? What digital media will you use? Will you have a sales team in that geography? Which acquisition channel do you think will work to scale your business in each of the geographies you are targeting? How do you plan to raise awareness for your brand and many more questions.
- Team Overview – In this section, you introduce the key members of your team and how you’ll work together to make your business a success. You can create a bio for each member that includes their name, title, position at the company, experience, expertise, and how they can guide your idea and help in achieving your goals. A team with good credentials and required expertise will build investor confidence.
- Fiscal Plan & Projections – In this section, you need to cover how much money you would require at each stage of your business and how do you plan to raise funding? We understand that making a cash flow projection for the next few years isn’t easy. But investors won’t take you seriously if you’re looking for funding without a plan.
There can be 3 sub-sections here:
- Cash-flow analysis – This should reflect what you are going to sell versus your business expenses
- Profit & loss analysis – You can show revenue prediction of at least a year ahead, graphically
- Break-even analysis – Here, you will show the time you will take to break even.
Your business expenses will include your capital expenses and operating expenses. A capital expense (CAPEX) is a one-time expense such as the purchase of fixed assets, business equipment, etc. On the other hand, an operating expense (OPEX) is an expense required for the day-to-day functioning of a business such as administrative expenses, research and development expenses, etc.
This is the part of the plan where your investors will spend the most time. Make sure it is thorough and realistic.
A Simpler Way to Get Funding
A business plan is important not just to secure funding but to keep a track of your business objectives. Therefore, you should develop a business plan that best serves your startup and its future growth. Keep it up to date and execute it properly.
While you look for financing, apart from a business plan, be clear on what your financing goals are and if you are willing to give away equity for that? If you need working capital for your marketing or inventory needs, you should look at financing options like revenue-based financing where you can raise capital easily by pledging a percentage of your future ongoing revenues.
We, at Velocity, are India’s largest revenue-based lender and offer growth capital of up to Rs 3 crore to D2C and e-commerce brands. Businesses with healthy revenue streams can get instant funds and can make the repayments as their revenue grows. You can apply here, and get funded within 7 days.
Your Free Business Plan Template
We understand how cumbersome it could be to create a business plan from scratch. While running a business, it can be difficult to take out time for this. So, we have put together an extensive business plan template for you to customize for your needs. You can collaborate with teammates across offices to create a business plan within no time! Download it for free!