If you are setting up your startup and thinking about creating a business plan - you are in the right place. From this article you will learn, among other things, what a business plan for a startup should look like (what it should contain, what form it should take) or for what purposes you can use such a business plan. This knowledge will also come in handy when you open your own business, which is not necessarily an innovative technology startup.
The knowledge presented below will come in handy both when you want to write a business plan on your own and when you are considering commissioning one. You will learn what is the purpose of a business plan "on paper" and how the preparation of a business plan looks like step by step. I invite you to read on!
Most startups make the fundamental mistake of starting work on a product before verifying their optimistic business assumptions. The result is often a product that is mismatched with the needs of the target market. This turns out at a rather late stage, when the company has already incurred significant expenses. A considerable amount of time has usually been spent on the work, and in addition, it is not uncommon to have spent a lot of money.
At the same time, business plans are usually not created at the time when it is most needed, which is before the first actions are taken. Entrepreneurs make the assumption entitled. "Why do I need a business plan? The paper will accept everything, and I will know best what to do and when to do it myself." The lack of a developed plan of action reflects badly on an entrepreneur who has not done his homework and has not prepared properly for the implementation of his idea.
With good reason, a business plan is the most universal business planning tool, which in various forms has been used successfully for many years around the world. So, where to start? With the execution of such a document, and in particular with the implementation of useful analyses. These include market analysis and competitive anaysis, but also the execution of a financial model or the planning of sales activities. The execution of these activities, if carried out with due diligence, can realistically translate into the future success of the venture. Above all, however, it will reduce potential risks right from the start.
In addition to drawing up a business plan or as part of it, it is worth checking the real demand for your service or product. How to do this? There are several ways to do it. I describe them in detail in the book "The truth about subsidies for companies - a practical guide".. If you are interested in this topic, write to us using the form below the article and order the ebook. At this point, I will signal one of the ways.
Well, it is a good idea to offer a service or product to potential customers even before you are able to deliver it. This way you will test "on a living organism" whether someone is really interested in the solution you are thinking about. Remember that a survey among family or friends is not reliable, because such people will not want to make you uncomfortable and will almost always confirm the attractiveness of the idea. In the real market, however, it works differently. Try to sell the product, sign a preliminary agreement or at least create a so-called "waiting list" or conclude letters of intent with future customers. This will definitely increase the likelihood of future success.
Remember that the business plan is created most for you. Not for an investor, bank or other third party. That's why you should approach it seriously, not just as a tool to convince others of your idea.
The description of the business plan and its structure should be preceded by a brief definition of what such a document is, and how it differs from similar materials.
A business plan and a business model are two different tools used in the process of planning and developing a business, but they serve different purposes and present different aspects of the business.
Definition: is a framework description of how a company creates, delivers and acquires value. It talks about how a company operates and how it makes money.
Components: Includes elements such as the customer value proposition, market segments, distribution channels, customer relationships, key resources, key activities, key partnerships, and revenue sources and cost structures.
Format: can be presented in the form of a one-page overview, such as Business Model Canvas.
See a sample canvas model below. You can also find articles strictly about this tool on the blog.
Definition: is a formal document that describes business objectives and a detailed plan for achieving them. It includes market analysis, strategy, finances and other detailed information about the company.
Components: includes sections such as executive summary, company description, market analysis, organization and management, product or service offering, marketing and sales strategy, and financial projections.
Purpose: It is often used to raise capital from investors, banks or other financial institutions.
In summary, a business model is more focused on "how" a company operates and makes money, while a business plan is a more detailed plan of "what" a company is going to do to achieve its goals. Both are important at different stages of creating and growing a business. The business model is often the first step in the planning process, while the business plan is a more detailed development of the model in the context of the market, competition and finances.
An investor presentation (from "pitch deck") is a form of business plan preferred by investors such as venture capital funds (VC funds). It allows business analysis in less time than traditional business plans of dozens of pages.
The presentation usually consists of a dozen slides in a layout:
This is usually accompanied by a professional financial model in excel, which presents, among other things, an income statement or cashflow. If you haven't created investor presentations before, it's worth entrusting it to experienced specialists - such as Well Done Business. Not only the content is important, but also the form in accordance with industry standards. For example, the market analysis should be based on a TAM/SAM/SOM diagram, and the comparison of competitors should be done on the X and Y axis or in a table.
In order to write a business plan, you must first know what it consists of. Here, the first important point. Well, there is no single ideal template for a business plan just as there is no single common definition for this concept. Below you will find a sample structure containing the most commonly placed elements in a business plan. A traditional business plan may have the following table of contents (example from a real business plan):
This is a fairly general structure of the business plan, which, however, indicates the basic elements of the document. As your individual needs or those of the recipient of the business plan (e.g., investor, bank, board of directors, authority) dictate, the final structure may be subject to adjustment according to these requirements. Every good business plan includes descriptive elements such as:
Along with other important parts, these are the five basic elements of a business plan.
Note that a very important component of a business plan is a financial plan or financial analysis. Such an analysis should be carried out as precisely as possible. It is difficult to accurately estimate the revenue side several years ahead, but it should be possible to describe the costs. An important purpose of the projection is also to indicate when your company will break even. In addition, the financial section should clearly signal the sources of funding for the project. It is best to entrust the making of financial projections to someone with experience.
You create a business plan first and foremost for yourself. However, it can also be a valuable tool for convincing third parties of your concept. Be it customers, private investors, bankers or grant officials. Often, it is the main tool for obtaining external financing for business development.
Business plans are a widely accepted tool for presenting business projects in a structured form. Regardless of market or product.
A professional business plan is the business card of your company. So far, no better way of presenting and analyzing the business of commercial projects has been invented in business. In a nutshell, the quality of a business plan can indicate the quality of your business, or at least your preparation for running it.
As mentioned earlier, VC funds prefer business plans in the form of pitch decks, i.e. investor presentations. In the case of business angels, there is no single generally accepted scheme. It all depends on the individual preferences of the investor. It's a good idea to establish these preferences before you start creating a business plan or commissioning one.
Banks favor traditional business plans of a dozen to a hundred pages in volume. The main attention is usually given to the financial part. Remember that at the bank, in addition to the business plan, you usually have to present collateral for a loan, such as a surety or mortgage, and an equity contribution. Even the best business plan without the aforementioned elements is usually not enough to obtain financing.
Offices such as the NCBiR or PARP most often also expect some form of business plan in order to grant funding. Grant applications usually more or less resemble a traditional business plan. People for whom creating a business plan is nothing new usually do better with grant applications as well. This is because most such applications include elements such as market analysis, description of the target group, swot analysis, marketing and sales or financial projections.
It is important to identify at the outset what kind of business plan the recipient of the document expects. Then it is easier to develop a document in 100% tailored to these requirements. You will find this out by asking the interested party or a company like ours, which has already developed several hundred business plans and knows the general requirements of each entity.
Once you have a business plan or investor presentation ready, it's a good idea to shop around for investors. Here are some tips on how to approach this topic:
➡️ Start with your personal and professional network. Consider whether one of your friends could become your investor or introduce you to such a person.
➡️ It is a good idea to participate in industry events such as conferences, trade shows or smaller local events. There you can present your concept and meet the right people to work with.
➡️ It is worth contacting a company such as Well Done Business, which has a wide network of contacts among potential investors.
➡️ Do your own research, for example, on LinkedIn. You will find many potential investors there. Focus your attention on those who invest in the industry you want to operate in. Don't be afraid of "idea theft." The vast majority of investors do not act that way. Check who the investor in question has invested in before and what are the opinions about them. You will get to such information relatively easily in the case of people with the right reputation in the industry.
➡️ You can also use apps and platforms that connect startups with investors. For example, AngelList, SeedInvest or Seedrs.
Whenever possible, try to get a referral from a mutual friend in the form of a reference before you speak to a potential investor. Remember that first impressions are made only once, and most often you have only one chance to convince an investor of your concept. That's why it's a good idea to "do your homework" beforehand and have investor materials such as a professional business plan prepared.
An additional tip: when you start negotiating with an investor, back yourself up with the support of an outside business and legal expert. You will avoid serious consequences if you end up with a dishonest investor. Remember that promised (virtual) money is not everything, and you need to carefully analyze the entire content of the proposed investment agreement before concluding it.
A business plan for a startup is a document that describes the vision, goals, strategies and planned activities of the venture. It shows how the startup intends to succeed in the market, what resources it will need and what financial results it anticipates.
A business plan helps define and organize key aspects of a business, facilitating communication with investors, partners and the team. It is also an essential tool when applying for financing.
While not every startup needs to have a formal business plan, it is strongly recommended, especially if the startup is seeking investors or other funding.
If you don't have experience in financial analysis, it's a good idea to enlist the help of experienced professionals.
The key is to present a realistic, thoughtful plan that shows how the startup will generate profits. It is also important to point out the unique features of the product or service and the market potential.
