With the business plan, flaws and weaknesses become visible, creating the opportunity for them to be addressed before it is too late. The overlooked weaknesses could become brilliant ideas that might only increase the value of a start-up. Also, the business plan gives you confidence in your projected financials to determine the development’s needed capital. In a similar manner, it gives you time to consider different strategies for sales and marketing. If you have time and motivation, then the business plan will surely strengthen your start-up’s idea.
Note: the order of the content in the business plan is up to you
This part should provide a brief summary of your business plan. Give an overview of the business idea, product/service, unique selling points (USPs), target audience, brief introduction of a team, and an investment goal. It is a fundamental part of a business plan since for investors, it gives the first impression of what to expect from the rest of the document. Be sure to write the key elements of your plan and by that try to create curiosity and excitement for the text that follows.
Tip: Start writing this part after you have completed the business plan. This way, it will be easier to summarise the information provided in a plan. Also, try to stick to a 1-page length.
The Company’s description is about the core beliefs and essential elements of a start-up, while the executive summary is a shortly described business plan. This section should outline the purpose, mission, vision, objectives, industry, legal structure, and shareholders. Be specific and short, this part should be no more than 1-page in length.
A start-up timeline gives a sense of the past, present and future milestones and achievements. It shows the stage of a product/service, funding rounds, progress in product/service traction, product/service testing, and accelerators/incubators/hackathons/competitions attendance. For investors, this section shows your motivation and determination.
Your investors might become your potential partners, keep this in mind and show them your competence. For each member provide a short biography that summarises their skills in terms of entrepreneurial experience. State the background information, such as education and interests. Also, state the current role in the start-up and the responsibilities of it. Additionally, your initial start-up team might have advisors and mentors. They can be business consultants, attorneys, accountants, and so forth. It is also essential that you include them by stating their role.
Who is the villain in your story? Describe the problem by outlining how severe it is. The better you will articulate the problem, the easier it will be for investors to understand the severity of it. If you plan to expand internationally, write about this problem’s state in other parts of the world. By explaining the problem, do not entirely exclude your target group out of the picture.
Every hero fights a villain. Explain to investors your unique solution to eliminate/minimise the problem; be the hero in this part. Focus on disclosing your start-up’s potential from the customer’s point of view. Explain how your potential or existing clients can benefit from it, and why they would come to you and not to your competitors.
In the solution part, you explain your product from a customer’s perspective. In this part, you should aim to explain it from an investor point of view. Focus on explaining technology/product/service functionalities, its development, and technical differentiating factors from competitors. Also, clarify the current situation on the intellectual property of your innovation. Investors put a great emphasis on whether you have a patent or other type of intellectual property.
This part should consist of your key competitors. List them by giving information on their location, market size and their unique features. Do not only look locally but also include international competitors. Additionally, discuss your competitive advantages by comparing yourself with your competitors, and by showing your superior product offering. Include the comparison of the pricing and explain your strategy to stay ahead of your rivals. Make use of graphs or tables to present it properly and appealing.
In the market opportunity, explain if the industry has open doors for you. Put your effort into a market research in order to be certain about its viability. Describe the market in terms of your target group, by explaining its size, growth potential and demand. Prove that there is a product-market fit.
The big question in the marketing plan is: how are you planning to reach the target audience? Precisely define your target group’s demographics by addressing their age, gender, occupation, educational level, income, and location. If your start-up is B2B, then address the industry, location, size, and business stage. Explain the positioning strategy and outline how you want to be perceived in customers/clients’ eyes. Give a plan for online and offline targeting strategy and its channels. Alongside that, explain your go-to-market strategy.
Risk assessment enables you to identify the potential threats that could affect business operations. It could be related to your team, market, finance, technology/product/service or business operations. In this section, let the investors know the potential risks in terms of probability of occurrence, impact and risk level.
Business model refers to a strategy for profitably doing business. Identify your type of a business model, whether it would be a subscription model, freemium model or another kind of model. Explain if you intend to make it B2B, B2C, C2C or C2B. For the revenue model, explain how the start-up earns money from its business model. Outline your main profitability growth drivers. Alongside the things mentioned earlier, define your scalability potential because most investors are highly interested in it. This could be combined with the financial overview.
One of the most crucial parts of a business plan is the financial overview. In this section, you present financial projections and, if applicable, the current financial state. Present monthly and annual forecasts of sales, budget, profit and loss, income statement, balance sheet, cash-flow statement, and a breakeven analysis. The purpose of a financial overview is to show your start-up’s scalability and exit potential.
Tip: Be honest, in most cases, investors see if a start-up exaggerates the numbers.
In this section, you should describe the projected use of capital and expected results. Additionally, provide your further fundraising plans.
This section only applies if you have fundraised before. If it does, then list your current investors and provide a capitalisation table (cap) that describes the start-up’s ownership.
Do not hinder the reader by putting your supporting documents right away in different parts of your business plan. Instead, refer to them and lead the investor to the references and appendices section. If you have any additional information that you believe will help you get the funding, put it also in the appendices. You should aim for investors to get the full picture of your business.
Golden Egg Check offers investor readiness assessment and market research.
The START program by Novel-T is a validation sprint for an innovative business idea in Enschede.
Incubase is a student incubator that offers start-up support in Enschede.