Startup 101: What should a business plan include? (part 1)

By
Maxine Buchert
January 27, 2022

You’re developing a software company, a bakery, a food truck. Everyone’s excited. You might’ve come up with a fantastic idea, a brilliant team to help bring it into reality, but it’s crucial you pause. Don’t put a pause on your passion and confidence, but a pause on the speed at which you’re developing your idea.

Business plans actually help answer a big burning question: how do I start a startup?

Giving your idea an actual business plan is a crucial way to slow down (momentarily), take a look at what you have and what you want. By making a business plan, you will have the best business tools in your toolkit.

This article will contain both detailed descriptions of essentially everything you need in a business plan and a template example of a business plan to top it all off.

But what exactly is a business plan? Do you really need one to have a business or could you just jump in?

Take it from us: if you do a business plan, project management will be a breeze. Similar to a business model canvas, it goes into plenty more detail.

BUSINESS PLAN RUNDOWN

A business plan is a document where you write down crucial information like:

  • What your business processes are
  • What business goals you have
  • Your measurements, metrics, and KPIs (Key Performance Indicators)

Because a business plan is just so large, we’re breaking it down into 2 in-depth parts to give you the full picture.

This will give you and your teams the best chance at startup success: you’ll be able to improve your workplace management and make team collaboration as simple as possible!

BUSINESS PLAN OVERVIEW

Here’s a comprehensive overview of all the parts of a business plan. No need to stress, though! While a business plan is comprehensive, it’s not extremely detailed. A basic overview of everything will make running a business easy.

Take a look at the main parts of a full, comprehensive business plan. You’ve got a total of around 10 sections, and in this article we’ll be delving deep into the first 3.

  1. Executive summary
  2. Marketing plan
  3. Market research
  4. Barriers to entry
  5. SWOT Analysis
  6. Target Customers
  7. Competitive Analysis - Product & Services
  8. positioning/niche
  9. Marketing our Products & Services
  10. Initiative 1
  11. Initiative 2
  12. Initiative 3
  13. Initiative 4
  14. Pricing
  15. Location or proposed location
  16. Distribution channels
  17. Distribution Channel Assessment
  18. Milestones
  19. Accomplished so far
  20. Next year
  21. Following year
  22. 12-month forecast
  23. Operational Plan
  24. Production
  25. Quality control
  26. Location
  27. Legal environment
  28. Personnel
  29. Management and Organisation
  30. Financial Plan (Startup Expenses & Capitalisation)
  31. 5 Years Summary
  32. Five-Year Revenue Projections

BUSINESS PLAN DETAILED

  1. Executive summary

Your executive summary should have a few sentences about what your main purpose is: what are you giving the customers? Include basic details about how big your company is, where it’s located, and what makes it stand out.

After you’ve given a small rundown about who your company is, outline your plan for getting revenue (and ultimately a profit). If you’ve got a subscription-based platform like GoStartup, you’d have basic information on each subscription package you’re offering with clear separation between each.

Learning what price your products and services should be can be a challenge to begin with. You don’t need to have a high price to start getting customers in: GoStartup’s platform has been designed as an affordable Slack and Trello alternative and that’s one of its big selling points.

Company Description

A company description is slightly different from giving a basic rundown like you’d do at the beginning of the executive summary. In the company description, you’d probably have a table with different sections answered short and sweet.

Inside this table, you’ll need to include:

  • Your business name: Make a catchy name that represents what you do with only 1-3 syllables. What do Apple, Google, and Notion all have in common? Some catchy, 2 syllable names!
  • Your vision: Your vision is an answer to the question: How are you helping in customers’ lives?Here are some examples of visions from famous companies, which serve as some of the best vision statements after years of refining:Apple vision statement:Amazon vision statement:Disney vision statement:
  • Your mission: This next part is equally as important in your business plan, but what’s mission vs. vision? Your business’s mission is much broader and helps answer questions like: what is your mission for the world? How will society change because of your company?
  • Values: Corporate values. Shared values. Core values. All sorts of values are discussed all the time, and there’s a reason. Values are essentially some of the key concepts your company stands behind. Companies ultimately want their values to be values their customers identify with, too.
  • Target market: The target market are the groups of people who would benefit most from your product or service.
  • Problems targeted: Find specific issues your target market are currently facing without the product or service you can give them. What are they struggling with right now?
  • Industry & Competitors: Take the chance to round up 3-5 of the biggest competitors for your product. If you can’t find any competitors, that can either be a great thing or a not-so-great thing. Ask yourself realistically why there aren’t any competitors. Have other companies tried and failed? Is there no demand?
  • Capitalisation (cap) table: A cap table is a table which shows who owns your company. Being able to establish what percentage of your company different key people own is important for setting the record straight and keeping the shareholding structure in check!

Product & Service Description

In this section, you should go into a bit more detail about your product idea. Give a short description of the main features of your product, and feel free to use dot points to get your point across. The main focus of a business plan is to be precise and succinct in what you’re doing, so don’t be afraid to make things short and concise.

If you’re using software to make your product or service possible, go into detail about the technology and unique features. What kind of softwares are you using for your startup?

Once you’ve considered all the basics you have and can offer, it’s time to be realistic: what are your limits and liabilities? As a business owner, it’s crucial to consider what your current pitfalls are and boundaries to your success. Believe it or not, seeing what your limitations are is a great way to make your company stronger!

  1. Marketing plan

One of the biggest expenses any company will have is in marketing. Undeniably a massive part of any company’s success, marketing essentially lets the world know how great your company is. Without marketing, people will have no idea what kind of products or services you give!

A marketing plan is a fantastic way to lay down the foundation for marketing success for your company.

A marketing plan includes market research, barriers to entry, a SWOT analysis, and a summary of the target customers.

  1. Market research

When doing your market research, take a look at the demand. Find statistics and facts that back up the fact that your company is needed by an actual group of people. Write a paragraph summarising the main findings about the market and who’s needing your product or service.

  1. Barriers to entry

There are barriers to entering any kind of market, and being able to identify these is crucial. There might be some key customers you’re choosing not to provide for, and you should identify these as barriers to entry (which can really be seen as potential barriers to success).

These barriers can be later tackled when you’re more established, but for now you need to justify your choices and why it’s best for you at the moment.

  1. SWOT Analysis

The SWOT analysis is easily one of the most famous tools used by companies and startups. Through the SWOT analysis, you’ll look at the Strengths, Weaknesses, Opportunities, and Threats. While these initially might seem like vague ways of looking at your company (like, what even is an “opportunity”?), there are great ways of separating each section to make it as easy as cake.

One way of evaluating SWOT is through considering elements like the product itself, the current status of your marketing team, what kind of staff you’ve got, your financial situation and its potential, and its market. Now, as you can see, there are various things you can take a look at for your SWOT.

What’s important is that you try to make your SWOT analysis both concise and detailed: try to find as many things to analyse, and keep your analyses as short as you can.

Once you understand your SWOT analysis, you’ll be able to become more productive and improve team communication.

  1. Competitive Analysis - Product & Services
  2. Positioning/niche

When searching up about positioning, lots of answers about position in HTML and CSS might come up. No need to panic, finding your position within the market doesn’t require code!

Finding your position as a company in a world full of companies is crucial. In this section of your business plan, you should be able to find your place within your local region, country, and within the market as a whole.

  1. Marketing our Products & Services

Being able to identify the main strategies you’ll use to advertise your business is what you’ll want to focus on in this section. Come up with 3-4 initiatives you’ll take on to achieve certain goals. This can be as simple as identifying the kinds of posts you might make on Twitter, how often, and what the end goal would be. The end goal is important: being able to measure if the initiative succeeded is arguably the most important part of an initiative.

Being able to show clear plans and execution is attractive to any kind of investor.

After all this, should I actually create a business plan?

A business plan is crucial because it will help you in securing grants, showing your validity to investors, and making sure that you stay on track. A business venture can be exciting, to the point there might be more ideas than realistic actions, and a business plan puts what to do and how on a neat little document.

Create a business plan as soon as possible, and if you need guidance on what exactly to include and how, we’ve made a page just for you with the A-Z you need to make one.