A business plan is a fundamental tool, that any startup business needs to have in place prior to beginning its operations. Most of the time, banks and venture capital firms will turn you down for funding if you don’t have a feasible business plan. A good business plan starts with an executive summary of the business that includes a detailed description of the business, its services and/or products, and states how the business intends to achieve its goals. It should also provide at least an overview of the industry of which the business will be a part, and how it will distinguish itself from its potential competitors.
So, what is a startup business plan?
The idea behind putting together a business plan, is to enable owners to have a more defined picture of potential costs, and drawbacks to certain business decisions, and to help them to modify their structures accordingly, before implementing ideas. It also allows owners to calculate and project the type of financing that will be required to get the businesses up and running.
A complete business plan must also include a set of financial projections for the business. These forward-looking projected financial statements are often called pro-forma financial statements. They include the overall budget, current and projected financing, a market analysis, and its marketing strategy approach. In a business plan, a business owner projects potential revenues and expenses for a certain period, and describes the operational activity and costs related to the business.
The length of the business plan will vary greatly from business-to-business, but in general, all of the required information should fit into a 15 to 20-page document. If there are crucial elements of the business plan that take up a lot of space, such as applications for patents, they should be referenced accordingly in the main plan, and included as appendices.
Why create a startup business plan?
The many benefits of having a business plan, should be more than enough to convince you to create one for your business. But just in case you’re still sitting on the fence about it, have you considered what could go wrong if you don’t take time to plan. You risk:
- Not understanding what is required of you as the business owner before and during the startup, this alone will force you out of business even before you have started
- Running out of cash before you even open your doors, simply because you have not anticipated your start-up costs
- Missing sales projections, because you don’t really know who your customers are, and what they want
- Losing customers, because your quality and service falls below standard
- Becoming overwhelmed by too many options, because you never took the time to focus on a mission and vision for your business
- Going bankrupt, because you don’t have a rational business model, and a plan on how to make money
How to write a startup business plan?
The method we use to transfer our knowledge and experience is based on a combination of “Project-Based Learning” (PBL) and “Experiential eLearning” (EEL) which is the process of learning through experience, and is more specifically defined as learning through reflection on doing.
This method allows you to gain knowledge and skills by working for an extended period of time to investigate and respond to an authentic, engaging, and complex question, problem, or challenge, which is implemented to overcome the challenge and helps to develop critical thinking, problem solving, change management and implementation skills.
So, in this project you have the following tasks to complete to achieve the outcome below.
- Task 1 – Compile your business plan based on the research and strategy that you have completed earlier
- Task 2 – Review your business plan for feedback purposes
What is the outcome of this project?
Once you have completed the entire project, you have your startup business plan ready to launch your business or to obtain funding when necessary.
It is recommended that you complete the business strategic plan project before you proceed with this project.
What is next?
Once this project is complete, consider the business launch project when available.