Passion and money alone aren’t enough to launch a successful business.
You’ve probably heard this: So many startups fail within their first year. It’s a highly competitive arena that changes quickly. Relying on assumptions is the worst thing you can ever do to your idea.
The only difference between your idea and that company you imagine in your head is a plan. Practical, consistent actions that are well-designed separate failure from success.
This guide will walk you through practical steps to build a business plan that’ll connect your passion with reason and ensure you take the right actions to launch a successful startup.
What’s Your End Goal?
It’s not about owning a company or a business. It’s more about having a clear vision for what you want to achieve with that business. Launching the startup is just half the battle. Managing it and remaining strong through all the ups and downs is what counts.
That’s where a business plan comes in. Your business plan should be your go-to place for:
- Listing all the assumptions
- Marketing ideas
- Target audience
- Target market
- Recapping and adjusting as you go
It’s best to keep revising your progress every six months. That’s when you sit down and take a deep-dive analysis of everything you did.
It may seem harsh to say this, but you know it’s true: What you have in mind is totally different from what will ultimately become the successful business plan that will win the day.
Getting back to our key point: Have a clear end goal. Answer this question honestly: Why do you want to launch your startup?
Helping your community? Creating more jobs? These are noble goals. But be careful. Be selective and honest with your own WHY. Your WHY will define everything else.
So, let’s get to work.
First Things First: Complete This Overview Before You Do Anything
This part is going to be your checklist. Let’s not be random here. Sure, it’s very interesting and motivational to spend four hours listening to Elon Musk or Steve Jobs.
But, get this: Your situation and reasoning are both different. So, take your time and fill out the following sections carefully.
What Are You Going To Sell?
If you are going to sell something that exists already, then you can just go ahead and note down all the ideas you can possibly think of.
Look for patterns and think of ways you can break the mold and stand out. What can you offer that is more valuable and unique?
For example, as an advertising agency, we were laser focused on offering a contract-based service. But, we began to look around and noticed that our clients don’t want to be fully committed to a long-term contract. So we broke our service down into:
- One-time packages
- Recurring packages where the client can cancel at any time
While we did this because we’re sitting on some nifty data, you can do the same by reviewing how your competitors offer their services.
On the other hand, if you’re offering a unique solution to a problem you’ve noticed in the market, you’d better look for similar products or services and try to find the following.
Do they sell it as:
- a one-time offer?
- a trial offer?
- or as a recurring offer where the customer pays monthly?
The thing is, your competitors have done all the homework for you. Take a look at what they sell and offer. Learn from it. The tuition is free.
Who Are You Going To Help With Your Offering/Product/Service?
On a high-level, you sell a solution to a problem. So, if you don’t get this equation right on day one, you’re going to struggle a lot.
You have to run a survey and get detailed answers for the following things:
- The demographic of your target audience
- Their exact pain points relating to your core offer/product/service
- Their online habits
There’s no one-size-fits-all number for how many people you should get to fill the survey, however, netting over 500 people is a very good amount of data to start with.
Give this resource a read to find more about how to do surveys and what questions to ask.
Now it’s time to get all the data in one place.
Craft Your Executive Project Summary
Just like the name says, your executive project summary is often a one-page document that summarizes all the important aspects of your project for better organization and management.
Here’s what your executive summary should contain.
What’s Your Big Vision?
How do you find it? You should try to imagine and come up with your exact WHY. It could take a lot of thinking, but it’s a must to write down the vision for your company. With your hopes and dreams in place, you can easily review your progress.
How Does Your Product Add Value?
You don’t have to be totally weird or highly unique. But you must stand out. What’s different about your product?
Value, at its core, is a vanity metric. But what we mean here could simply be a new feature or a slightly different way of doing business with your clients. If you were the customer of your own business, how would you like to be treated and served?
This could help you come up with a few ideas to add value to your own product or service.
How Will You Do Marketing?
How are you going to reach your target audience? This section should give a clear scope on the marketing channels, the material, tools, team members, and your marketing budget.
Marketing is the driver of your growth. Right off the bat, do this:
- Decide on the top three marketing channels that you’re going to focus on to get early traction
- Make a list of the key channels you’re going to focus on for the long-term and how much money you are going to spend monthly on each channel
- Remember that your email list is your biggest asset; how will you build it?
It’s highly recommended to hire a marketing manager from day one and have him prepare a well-thought-out, data-driven marketing plan for your exact situation.
Know Your Money Numbers
Finance is the tricky part. We will talk a bit more about this later on. But you should list all your numbers here. Your expenses, your profit margin, your pricing … everything. Knowing your numbers is a must.
Structure Your Business And Make Sure You’re Well-Aligned
This section is about going deep into the key pillars of your business’s foundation and growth plan. There’s no place for assumptions here; only real data talks here.
Take your time, do your homework, and let’s get started.
Products
You’re in this to solve a problem and get paid. We all agree to that. But you have to be more selective and, dare I say, cunning.
What type of product are you going to sell? And how much money is it going to cost you? And how much money are your customers willing to pay for it?
Get back to the drawing board and brainstorm all the ideas you can possibly think of.
Values
This is one of the most important things for your business. It will help you set the culture you want that’ll match you, your team, and your clients with what you want to build.
Good customer service. Do what’s right.These are all great values, but you shouldn’t use them if you don’t really believe in them.
Don’t copy anyone’s values. Build your own. Every one of us has his own values, so you need to work in teams and involve everyone. Be sure to touch bases with your co-founders, if you have them, and, using those rich resources, make clear the values you stand by.
Goals
How can you tell if you’re going in the right direction?
Here you should list your initial goals and your long-term goals. For example, is making 20 sales a month in the first three months a good sign that you’re doing well? How about in six months?
For sure, your metrics will vary. But to keep yourself motivated and organized, be realistic and set the key metrics that you have and should measure once you launch.
Your Financial Plan
If you can’t measure it, you can’t improve it. You have to track every dollar that comes in and gets out. Otherwise, you’ll struggle a lot down the road.
However, we can break down your financial plan into three key pillars:
- Income: Simply put, you’re going to list your revenue, then subtract your expenses.
- Balance Sheet: Basically this is all your owned assets that make you money-balanced with all your liabilities, the things you spend money on.
- Cash Flow statement: This should give a clear overview on the money you spend, the loans you have, and investments if you did them or got them.
Finance is more than just calculation and we strongly recommend that you hire a \an accountant. Having a finance expert on your end is a must to keep everything on track.
Final Thoughts
A business plan is the backbone of your startup, or even idea, and you should create it properly and based on real data.
Most businesses are doomed because their founders focus on using their own assumptions and past experiences to build the business plan. And in most cases, they don’t even build one. Don’t do that.
Make sure that:
- You have decided clearly on the product you’re going to sell
- You have chosen your exact target audience
- You have prepared your executive business plan summary where you included: your big vision, the value of your product/service, your marketing plan, and your financial plan
- You have structured your business in a way that’s very organized and can easily help you to launch and review your progress
Remember to take baby steps, improve one thing at a time, be flexible and enjoy the journey.
