How to Write a Business Plan for a Startup
Plan your success
It’s great to be an easy-going person who is ready to start a journey just when you call him. However, when it comes to business you should be more accurate and organized. A successfully build business is not just a luck (though, let’s tell the truth, luck means much, as well). But the thing that’s far more important is a planned and hard work. That’s why a precise business plan is something that you definitely need.
Consider the following tips before you start writing your Business plan:
Keep your plan as short as possible. The business plan shouldn’t look like an essay on a certain topic. Focus on the essential and concrete information.
Keep your team involved. Involving your employees in the planning process will help you build a strong and devoted team. Also, planning together, you’ll be able to set the priorities and identify your common goals.
Do a research. Before writing a business plan, you’ll need to learn quite a lot of information about marketing strategy, finances and so on. Only when you have the correct information, you’ll be able to complete your business plan with more or less accurate data.
Be realistic. Being over positive and ignoring your weaknesses and threats, you risk to undermine your credibility and show your incompetence.
Don’t try to complete your plan at once. Don’t make yourself finish all the points at once. If you don’t feel like that or you realize that you still need to get more information, make a break and return to the paragraph when you feel you’re ready.
Write the summary last. Even though summary is the first thing that comes in your plan, it’s the last the point that you should fill in.
Review your plan and do it regularly. Your business plan is not a stable thing that won’t change for years. To make a good impression you need always to keep it updated. Besides, once your plan is completed, it’s highly recommended that you show it for a proofread to the specialists.
So, now you know the right way to writing a successful business plan. What’s next? The next step is to know what exact paragraphs your Business plan should consist of and what you should write there.
#1: Executive summary
As we’ve already told, write this section last. It should be about 1 or 2 pages. Write there the general information that you would include if you made a short presentation about your product: What kind of product will it be? Who is your target audience? Who are the owners of the company? and so on.
Here is the Summary for an Airport Café startup, as an example:
“The Airport Café is a full-service restaurant/cafe located in airside Heathrow Terminal 3. The Café features a full menu of moderately priced ‘comfort’ food influenced by many traditional time honoured British Café dishes. The Café is all in one section with no partitions and features, magazines, newspapers and four plasma screens showing sport and news. The Airport Café is owned and operated by Airport Café Ltd and is 100% owned by Mr and Mrs Smith….”
#2: Company description
Here you should write what you will do in your business. In this section, the best variant is to write about your company goals. Write what’s important for you in business, who you will market your business to. Give a description of your industry, what changes you envision in the industry in the coming years. Mention the location and provide more information about the owners. Write what you think your main competitive strengths are and so on. It’s also the place to mention the legal form of the ownership: Sole proprietor, Partnership, Corporation or Limited liability corporation (LLC).
Here is the Company description for an Airport Café startup, as an example:
“The Airport Café is located in Heathrow Terminal 3, adjacent to the exit gates. This is an excellent position as there are no competitors nearby. It is also a short distance from the main food court where most of the other food retailers are located. The Airport Café is owned and operated by Airport Café Ltd and is 100% owned by Mr and Mrs Smith. The Airport Café has been trading for three years in Terminal 3 and has achieved an average of 10% growth in turnover over those three years...”
#3: Market analysis and competitive analysis
In this paragraph, you need to write what segments of the market you plan to target on (local customers or a particular age group). Also, you should indicate how large each market is and if it’s going to increase or decline.
Besides, here you need to mention who your main competitors are, list the advantages and disadvantages of each competitor and their product. You should explain why you think people will abandon your competitors and start buying from you. For writing this information in a clear and easy manner, you can use the Competitive Analysis Table.
Here is the Market and competitive analysis for an Airport Café startup, as an example:
“The restaurants industry within the UK is set to increase by 15% per year, this is based on figures from the UK and not restricted to airport catering. The restricted restaurant industry within the UK Airports is set to increase by 10% per year.
Competition Terminal 5. The general nature of the competition is typically a 70 to 150 seat restaurant with outdoor seating. The menu prices for entree's range from £7.00 to over £25.00. All of the surrounding establishments serve, at a minimum, beer and wine. Most serve liquor-spirits as well. Some of these venues have added entertainment however most are prevented by their facilities from expanding into this area of service…”
#4: Marketing & Sales
This section as crucial as it always gives an indication whether the business has chances to survive or not.
You’ll need to mention how you are going to enter the market, how you will grow your business, how you will organize the communication with your customers and who your customers in general are. In other words, you need to outline the buyer persona (age, sex, income, interests and so on).
Also, you should write what the average price for one sale will be, and talk about your pricing strategy.
It’s also a place for writing about the ways of promotion and the advertising. What media you’ll use and how often.
Here is the Marketing and Sales plan for an Airport Café startup, as an example:
“The first category of our sales strategy is to establish and maintain a position with our primary constituents, travellers. We will depend upon keeping these people happy with our food and beverage products options. Our second strategy is to utilise any spare capacity to provide the same service to airport staff. It is estimated that there are 20,000 staff members working in around Terminal 5. With the predicted expansion of this terminal it stands to reason that staff numbers will increase with this growth. This is where the greatest area for repeat business can be established. …”
In this paragraph you’ll need to show the management hierarchy and who is responsible for the key functions. You should also include position description for the key employees. And, in case, if you are looking for investors, it’s also a good idea to include resumes of the owners and key employees.
Here is the Management description for an Airport Café startup, as an example:
“The Airport Café is owned by the Airport Café Limited which owned 50% by Mr Smith and 50% by Mrs Smith. The Terminal 3 site is staffed by:
Two Shift Managers
Two Deputy Shift Managers
One Head Chef
Three Assistant Chefs
Four Waiting staff
Part-time personnel are hired during the holiday period for all duties below the Deputy Shift Manager position during the busier holiday periods. Having two sites relatively close would mean during an emergency or busy times staff can be moved around between the two sites. Other cost and staff saving will be the time Mr & Mrs Smith spend at each site will be split as and when they are needed…”
#6: Financial plan
Your financial plan is one of the most important parts, so it’s definitely worth paying a significant amount of attention to. The financial plan consists of a 12-month profit and loss projection, a cash-flow projection, a projected balance sheet and a break-even calculation. All in all, this information will show the financial future for your company.
Here is the Financial plan for an Airport Café startup, as an example:
“We want to finance growth mainly through working capital. We recognize that this means we will have to grow more slowly than we might like. The most important indicator in our case is inventory turnover. We have to make sure that food inventory turnover stays at approximately four turns per month, or we risk loss through spoilage. We must target a net profit before interest and tax of 14% at the least from the second year of trading from both sites…”
As you see, planning is an essential thing for not keeping everything in order and make the business successful. It’s far more than just writing. It’s a strategy that you should carefully think of. If you manage to write everything in a clear and persuasive manner, you’ll be able to inspire the others with your idea.
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