P C A And Co.
Crafting a Winning Business Plan for Your Indian Startup: A Comprehensive Guide
Embarking on a startup journey in India is both exciting and challenging. Amidst the enthusiasm and innovative ideas, a crucial element stands out as the cornerstone of your success: a well-crafted business plan. Think of it as your startup's GPS, guiding you through the complex landscape of entrepreneurship. At PCA & Co., we recognize the pivotal role a business plan plays in securing funding, attracting investors, and achieving sustainable growth. Let's delve into the key components and strategies for crafting a winning business plan tailored for your Indian startup.
1. Executive Summary: Your Startup's Elevator Pitch
The executive summary serves as the opening statement of your business plan, providing a concise overview of your venture. It should be compelling, capturing the essence of your idea, target market, financial projections, and growth potential.
Key elements:
Problem Statement: Clearly define the problem your startup is solving.
Solution: Explain your unique product or service and its value proposition.
Target Market: Identify your ideal customers and their needs.
Competitive Analysis: Briefly analyze your key competitors and highlight your differentiators.
Financial Projections: Summarize your expected revenue, expenses, and profitability.
Team: Introduce the core team members and their expertise.
Funding Requirements: State the amount of funding you are seeking.
2. Company Description: Unveiling Your Startup's Identity
This section briefly introduces your company, its mission, vision, and legal structure. Highlight your core values, business model, and the problem you aim to solve.
Company Overview: Name, location, legal structure, ownership details.
Mission and Vision: Clearly articulate your purpose and long-term goals.
Products and Services: Describe your offerings in detail, emphasizing their unique features and benefits.
Target Market and Customer Segmentation: Define your ideal customers and their characteristics.
Management Team: Showcase the experience and skills of your team members.
3. Market Analysis: Understanding Your Landscape
Thorough market research is crucial for understanding your industry, target market, and competition. This section demonstrates that you have a deep understanding of your market and the potential for your product or service.
Industry Overview: Analyze the current state and future trends of your industry.
Target Market Analysis: Define your ideal customers, demographics, and buying behaviour.
Competitive Analysis: Identify key competitors, their strengths and weaknesses, and your competitive advantages.
SWOT Analysis: Assess your startup's strengths, weaknesses, opportunities, and threats.
4. Marketing and Sales Strategy: Reaching and Converting Customers
This section outlines how you plan to reach your target customers and convert them into paying clients. Your marketing and sales strategy should be well-defined, cost-effective, and aligned with your target market.
Marketing Mix: Describe your product, pricing, promotion, and distribution strategies.
Sales Channels: Outline how you'll reach and sell to your customers (online, offline, direct sales, etc.)
Customer Acquisition and Retention Strategies: Detail your plans to attract and keep customers.
Marketing Budget: Allocate resources effectively for various marketing initiatives.
5. Operations and Management Plan: The Backbone of Your Business
This section focuses on the day-to-day operations and management of your startup. It should detail your processes, team structure, key responsibilities, and any necessary infrastructure.
Operational Processes: Describe your production, delivery, and customer service processes.
Management Team Structure: Outline the roles and responsibilities of key team members.
Location and Facilities: Describe your office space, manufacturing facilities, or any other physical infrastructure.
Technology and Equipment: Detail the technology and equipment required for your operations.
6. Financial Projections: The Numbers That Matter
Financial projections provide a quantitative picture of your startup's financial viability and potential for growth. This section should include detailed financial statements and key financial metrics.
Income Statement: Project your revenues, expenses, and net income over 3-5 years.
Balance Sheet: Forecast your assets, liabilities, and equity at specific times.
Cash Flow Statement: Project the flow of cash in and out of your business.
Key Financial Metrics: Calculate and analyze metrics like break-even point, gross margin, and return on investment.
7. Funding Requirements and Exit Strategy
If you are seeking external funding, clearly state your funding requirements and how the funds will be utilized. Additionally, consider outlining a potential exit strategy for investors.
Funding Needs: Specify the amount of funding required and the purpose of the funds.
Exit Strategy: Briefly describe your potential exit options (acquisition, IPO, etc.)
Crafting a winning business plan requires thorough research, meticulous planning, and clear communication. By incorporating these key elements and tailoring your plan to the Indian market, you can create a compelling document that attracts investors, secures funding, and paves the way for your startup's success.
Remember, a business plan is not a static document. Regularly review and update your plan to reflect changes in your business and the market. At PCA & Co., we're ready to assist you in creating a comprehensive and impactful business plan that sets your startup on a path towards achieving its full potential.
Contact us today for a personalized consultation and let us be your partner in navigating the complexities of entrepreneurship in India.
Disclaimer: This blog post is for informational purposes only and should not be taken as legal advice. Always consult with a qualified professional for specific guidance.
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There is a thin line of difference between the dreamers and the Doers. Today, if you have taken an interest in how to start a startup in India, you have taken that leap of faith to become a Doer.
A startup is just growing a crop. You need to sow the seed, nurture it, give it the right set of conditions, and take good care. In the end, you will reap the fruits of your labor.
This brings us to the question, how to start a startup in India?
Don’t worry, that is exactly why we are here. What follows is a comprehensive guide listing all the steps to do it. We will talk about ideas, networking, partnerships, legalities, funding, building your startup, and growing it.
In every section, you will find a load of links to useful resources. More importantly, the whole debate will be focussed on the Indian Startup Ecosystem.
Surely, India may not be the first choice of starting a startup, but it is certainly rising to the occasion. With this in mind, let’s begin our amazing journey together from the first step, The Basics.
Chapter 1: The Basics
According to Indian startup governance , a startup is an entity that is younger than 7 years with an annual turnover of less than INR 250 Million. More importantly, it must be registered in India.
Behind every startup, there is a story. This story has one or more than one person who is inspired to bring about a change in society. Startup founders are connected with their idea very deeply. They work on this idea, mold it, and shape it to form a useful product or service.
In technical terms, a startup personifies a young company that is established by entrepreneurs. These entrepreneurs are looking for various sources of funding to launch their product and develop it into a business.
But, how did the startups come into existence? The first evidence of startups is linked to Silicon Valley. But the fact is that we cannot place the pin on a particular year.
Defining startups is not straightforward. Different economies have accorded a different definition to a startup. Where India has set 7 years as the benchmark, Europe has set it at 10 years. In the USA, startups are called a shoestring operation, meaning something that starts with a tight budget.
Similarly, there is no direct way to tell when was the first startup launched. A book named Silicon Valley Fever traces the startup origin to 1976.
But, the word startup was used first in a Forbes article back in 1976. So, all things point to the era of the 1970s as the origin of the concept of startups.
History of Startup in India
Since we are on the topic of how to start a startup in India, it is important to know when India saw the emergence of these young companies.
The emergence of startups is linked with entrepreneurship. In India, the entrepreneurial spirits were low before Independence. Those who wanted to go down this road were confined to several impractical rules and regulations.
After Independence, the Indian economy’s dream to become self-reliant did act as fuel for the entrepreneurs. Added to this, the newly found freedom provided confidence and cleared a path for the entrepreneurs.
However, in this era, the primary focus was on developing large scale industries so that the economy could thrive with the help of the Trickle-Down Effect.
But after the Liberalization reforms, the concept of startups began taking shape. As the Indian economy started to realize the benefits of privatization. Interestingly, the real spike in the startup ecosystem was realized after the 2008 recession .
Some Facts about Indian Startups:
Here are some facts you must know about the Indian Startup ecosystem :
Moving forward, when we talk about the top startups in India , names like Paytm, Flipkart, Zomato, Ola, Cure.Fit cannot be missed. These are the applications that have picked India up from a lower position and taken it to the top spot in the startup ecosystem of the globe.
Every startup that has become successful was not able to achieve it overnight. Becoming a success and transcending from every single stage of a startup is a gradual process. An amazing anecdote for this gradual expansion is Salesfusion.
The founder of Salesfusion shares his success story of how he failed 3 times before building a startup that generates $400K per month in revenue today. Harishanker’s story is one of the aptest personifications of how to start a startup in India.
Did you note the point where it said that Harishanker failed 3 times?
In every startup ecosystem, failure is as much a part as it is a success . But, don’t be discouraged or disheartened. You can ask any entrepreneur, and they will proudly tell you their failure story. Before a success story, there is always a failure story.
If you treat failure like a stepping stone, you will always know how to move up.
Now that we have established the outer lining of building a startup company in India, let’s move on to understand the innate fabric. Before you hire people, or rent a space, or even ask for funding, what you do have except for one idea.
Every startup begins with one idea backed by a vision, and with that vision, we can build an empire. But, let’s focus on the idea first.
Chapter 2: The Idea
The key to every successful business lies in a unique idea. Now, how can you get an idea about beginning a startup? What made Jamsetji Tata go on finding one of the best motor giants in the world? What led Dhirubhai Ambani into setting up a company whose current value is in billions?
You will find one thing common if you take a closer look at all these industries and their founders and that is they understood an issue that many people around them had. They analyzed the problem and worked on a solution. That’s how they started!
How to Hunt for a Startup Idea?
Here’s a quick 3-step process to identify great ideas for your startup company in India, similar to the process Tata and Ambani probably carried out:
- Look for problems : The key to getting ideas is to look for every small or big problem in your daily life. You can note these problems on paper or a notebook for the record. Go through these problems every day to find that one idea that will bring out the best result. Here are some of the startup ideas that may ring some bells.
- Find a problem that messes with your mind : While going through your list of problems, look for those that interest you more . For example, if you love to do craftwork, look for a problem that consists of decorative items. Business is not only about making a lot of money, but it also involves the factor of passion and interest. Do what you love to do and that will turn out to be your greatest success.
- Find an innovative solution : Well, if you have a problem that you can solve, and it is also of interest. It is crucial for you to look for an out of the box solution . For example, everyone can use a hammer to drive nails into the wood, but a nail gun makes it much easier and faster. Just like that, do your research about the solutions to the problem that is already there (if any) and find a better one.
You may also want to read our article on How to Get Startup Ideas .
How to Analyze your Solution?
You have found a problem: people love downloading videos from Instagram but it’s hard to do it. You’ve thought about a solution: an app that helps them do that.
How do you know that solution is the correct one? Here’re some things you should continue to research:
1. Product or Service Analysis
Well, the very first thing that you need to check is what your product offers the people . There might be some similar products in the market that tend to offer the same services as you. Hence, as mentioned above, you need to make your product or service a bit unique. India is a densely populated country, so your product quality matters a lot.
For example, if you are developing a video download app for Instagram, you can also add other platforms. This means that you can add the ability to download videos from Youtube, Facebook, Vimeo, etc.
2. Does the Market Need your Product or Service?
This is also one of the crucial questions to ask yourself. After all, if your product or service is not liked or required in the market, it will be a dead-end for you. So, you need to make sure that your product or service is essential for the people.
If we take the same example, a lot of people love to download and share content from Instagram. So, if you conduct a comprehensive research of the market (included in detail in the next section), you will get an idea about the demand for the product you are about to develop.
3. Are you Enjoying What you are Doing?
At last, all of this is not going to last long unless you love it by your heart. Many of us have tried to work on a startup but could not carry it forward. The only reason behind this is the lack of interest and passion for it.
For example, if you are not fond of coding, then building an app may not work well for you. So, try working on developing a product or service that you are passionate about. Here are some benefits of doing something that you love .
Validating the Idea
So far, you have thoroughly analyzed your solution. Now, it is time to closely analyze the market. This means that you need to make absolutely certain how your product will perform in the market.
1. Thorough Market Research
This section includes all the necessary measures to make sure your product or service in the market is new and unique. Here are some of the key points.
- Make a brief layout of your product that includes its features, its uses, its audience, its benefits, etc.
- Search for similar products on the web to know the level of competition.
- If you find some of the similar products on the web, make sure you cross-check every aspect to find any similarity.
- Refer to customer reviews to know more about the low sides of the products; you can improve them in your product.
2. Interact with the Audience
This is the most fruitful aspect of the process. You will get to know some new things from the customer’s point of view.
- You can refer to various online forum websites to know about the customer’s issues regarding the existing products.
- Make an online survey to know about the user’s expectations, features that they want in the product. Some websites will help you build surveys like KeySurvey , Typeform , Survey Monkey , Gosurvey.in , and Google Trends , etc.
- Harness the power of social media by gathering reviews from your social circle. Discuss your idea with your known ones and know-how they would like the product to be.
There is no perfect trick to know how your idea will perform in the market. You can only test and check if it works. Some of the budding entrepreneurs have faced a lot of failures before getting to the point they are today.
To get a more clear picture of it, here is a perfect validation story . This guy started pre-selling his product to know if people were interested in his solution or not. Through this method, he made a whopping $4000 without even having the product!
Build a Minimum Viable Product (MVP)
Finally, here is the part where you will be actually working on your product. Now, the first question most of you will be having is:
What is an MVP?
An MVP is expanded as a Minimum Viable Product. It is actually the most basic version of your product (which should be built quickly and cheaply) which aims to validate if there’s interest and people are willing to pay for it.
Some of you may confuse an MVP with Prototype. While an MVP is actually a product that will be used by your audience, a prototype is just a draft of your idea.
Why is an MVP Required?
It brings several advantages:
- Saves time and money : MVPs have only the basic features, which means they are easy to develop and require low capital investment. If you see the product doesn’t work well in the market, you can quickly shut it down and move to something else, saving you a lot of time and money.
- Customer feedback : Releasing the MVP is a great way to hear your user’s feedback and build more features based on their needs and not what you think they need.
- Generate early leads : Many of your MVP testers may become customers later on. They’ll feel as if they have contributed to your product so they will be more willing to pay for it, rather than go with your competitors’ solution.
How to Build an MVP?
We have a detailed article explaining how to build an MVP .
If you don’t like coding, there is no need to worry. You can easily build an MVP from your business idea without coding. Here’s a course that teaches how to do it.
Formulate a Business plan
A business plan plays an indispensable role when starting a startup. It is business plan is a written document that includes all the necessary aspects of the business, like, business goals, business strategies, the time frame of goals, details about profit and loss, finances, marketing methodologies, etc.
Some of the detailed aspects of a business plan include:
- A brief summary of the business that includes all the major points.
- Overview of the business: legal structure, type of business, means of business, location, and more.
- A proper plan of operations.
- Analysis of the market.
- Details about the products and services.
- A detailed analysis of the market competition.
- Information about the management team.
- Financial plan.
- Future goals and projections.
Name of the Startup
Naming your startup may seem like an easy thing, but it is not. Here’re some considerations:
- Choose a name that resonates with your business.
- Take care of the keywords.
- Make it easy to say and understand.
- Understand the psychology behind the name.
- Prevent long names.
Here is a 10-step guide on naming your startup .
Startups and companies are run by people. You need to be careful while choosing people for your firm. The coming chapter will explore all the necessary factors that you need to keep in mind while choosing people for your firm.
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Chapter 3: People
As a startup founder, this question might have popped up in your brain. Who can I ask to be my partner in crime? Sometimes, when two people come together, they bring in a great amount of value and experience to the team.
How to get a Great Co-Founder?
While finding a great co-founder assure that he/she has a different skill set as compared to yours. This way, both of you can contribute equally to the startup. The combined contribution of both the co-founders will ultimately benefit the startup.
Let’s consider that you are a developer and have an idea for an innovative product. But, when it comes to negotiations, understanding the legalities, or even hiring people, you may not be too good there.
If your co-founder is also bereft of these qualities, both of you will end up spending the limited amount of capital on hiring new people. And capital is one of the most important factors that play a role in the startup’s survival.
What to Consider When Getting a Co-Founder?
India is gradually becoming a startup-friendly nation and there are several factors to portray the changing scenario. As we progress, more and more youngsters are eager to launch their own startups.
Parenthesis over here: The question of how to start a startup in India has nothing to do with age. Anyone who has a basic understanding of managing things can do it. There are a plethora of options out there, no matter if you are a school/university student ( here are some business ideas for you if you’re a student ), a graduate, a part-time worker, etc.
More and more people are entering the startup ecosystem which means that it’s every year easier to find another person willing to run a startup along with you. Global Entrepreneurship Index (GEI) portrays the entrepreneurial environment of a nation and the 2018 GEI puts India at 67th position out of 137 nations. This may be a lower rank relative to other nations, but when compared to India’s position in 2017 (96), it is somewhat better.
Some considerations you must take when looking for a co-founder:
Consideration 1: Trust
Both you and your co-founder will have to build a strong and balanced working relationship. If you want to see the end of the line, it is important to trust each other.
So, for you, the first question is, “Can I trust this person?”
There is no easy answer to this because building trust or taking someone as trustworthy does not come with one look or meeting.
But a great thing about humans is that we have something called a “Gut Feeling.” This particular emotion will certainly help you answer many questions along the startup journey.
So, if you meet a potential co-founder and find that something is not right or feel that you cannot build a strong working relationship with this person, back away.
Consideration 2: Skillset
We have already talked about it in brief above. Keep an eye on the skillset of your potential co-founder and ensure that they complement your skillset.
If you have some weaknesses, your co-founder must be able to balance it out. The right balance does not mean that you need to choose someone entirely opposite from you. Rather, choose a person who aligns with your personality along with having a different skill set. This brings us to the next point.
Consideration 3: Personality
Your personality should match with your co-founder, and there are many reasons for this. Establishing a startup company in India is taxing and stressful.
In that case, you will need someone with whom you can fraternize in those tough times. And that will only be possible if both the founders have a matching personality within and outside of the office.
Consideration 4: Honesty
There was a time when people used to believe in “Honesty is the best policy.” Things are somewhat different today.
So, it is important to know the honest levels of your co-founder before starting to associate. There are many other things apart from leaking cash out of the company funds.
As a company’s founder, you need to have some morals, some values that personify your vision and mission. Swaying away from these also amounts to dishonesty and a breach of trust.
How to Find a Co-Founder?
Now that you know the primary considerations you need to consider when looking for a co-founder, let’s move on to the process of actually finding one.
- Your personal sphere : You can note down the duties and responsibilities of your desired partner and look in your personal sphere for someone that fits these characteristics.
- Co-founders networking : Similar to the methods you use for finding investors, you can also find co-founders. The startup India hub is evolving, and you will be able to attend many events and summits targeted towards building and connecting the startup ecosystem.
- Meeting the founders online: Apart from the events and summits, there are many other places where you can find your ideal co-founder . These are social media platforms, dedicated founder matchmaking websites, and hackathons.
Co-founding with Friends:
It is entirely possible to co-found a startup with your friends. But there are risks involved.
- Firstly, you may think that you know your friend very well, but as you both work together, discuss things together and deliberate over some issues, you will get to know other facets of each other. In the course of time, you may realize that you may have not know your friend that well. This can create some problems in the future.
- When you work with a friend, discussions like money and commitments to the job are taken lightly. Don’t do that. Keep everything on the table. If you decide to go down this path, make sure that you set boundaries both personally and professionally.
You may also want to read our guide on How and Where To Find a Co-founder .
Building a Team
“The secret to successful hiring is this: look for the people who want to change the world.” This quote by Marc Benioff summarises the process of hiring good people to work with you.
A great team is vital for your startup’s growth. A 2013 study found that 60% of startups have to face the dust because the team was not right.
While building your dream team that will help you reach the apex level of success, you need to consider these points.
- Self-assessment: You are that thread which is connecting everyone on your team. So, it is best to do a self-assessment first before moving ahead. Self-awareness will get you unprecedented success because you will know your strengths and limitations to work accordingly.
- Identify the main roles : Apart from your skillset and your co founder’s, assess which other important roles are essential for your startup. The ideal rooster for your team will also depend on the type of product or service.You may need an amazing designer, developer, marketer, and an executor are some common roles.
- Build a startup culture: Let’s get one thing straight, startups don’t pay well. Startups in India or in any other country have a limited amount of capital at their back. Hence, they need to spend that money wisely which also means hiring good people, but at a lower remuneration. So, what makes people stick? The answer is a startup culture . A good culture will ensure higher employee retention, a self-motivated environment, and a productive workforce.
- Hiring and Recruiting : India has a wide talent pool, and you will find a lot of suitable candidates to work with. However, you must know where to look and what is the right hiring strategy.
When it comes to finding the candidates, platforms like LinkedIn , Glassdoor , Placement India , Indeed , and Naukri are preferable.
After team building, the next step is looking at the legal side of the venture.
Chapter 4: Legalities
Understanding the legalities of starting a company in India has to be done at the proof of concept stage. Some startups do not take these considerations seriously and end up making legal mistakes that hurt them badly .
Indian startup registration can be done both online and offline.
How to Register a Startup in India Online
There are two things to note here: one is incorporating your startup and second, registering it under the Startup India Program. Incorporating a startup or a company includes obtaining the Digital Signature Certificate and Directory Identity Number.
Once your startup is incorporated, you become eligible to enlist it with the Startup India Program. We will talk about the program in further sections. But, for now, you must understand the process required to register your startup with the program .
You can choose one out of 4 kinds of ownership models. Your choices are:
- Proprietorship : No registration is required and legally you as the proprietor have the sole ownership of the company. For taxation, your income will be taken as the taxable income, you cannot transfer the ownership of the company to any other person. Lastly, you cannot call in foreign investors to fund your venture. Note that, a sole proprietorship does not count as a startup in India .
- Partnership: A partnership needs two people to start with, and here you may or may not choose to register your company. However, if registered, you will come under the ambit of all the legalities and compliances applicable to a partnership company. A partnership firm can only be listed as a Startup in India if it is less than 5 years of age from its incorporation.
- Limited Liability Partnership or LLP: A LLP in India needs to be registered under the LLP Act of 2008. It comes under the ambit of the Ministry of Corporate Affairs and must have at least two partners. Further, in India, an LLP mode of operation is preferred over other registration systems. There are various benefits of incorporating as an LLP , including operational flexibility, fewer compliances, among others.
- Private Limited Company: They are registered under the Companies Act 2013. To be more precise, such a company can have a workforce of up to 200 members, and it needs at least 2 directors. There are additional legal formalities to register as a PLC in India, but they have access to several other benefits accorded by the state government.
Here’s a dynamic video explaining the models:
As long as you are in the POC stage or until the time you are not gaining some traction, not registering the company is fine. But once you enter a stage where you are ready to register, the real complexities begin.
From compliances to taxation, labor laws, environment laws, and other legal requirements are meant to be fulfilled.
Intellectual Property Rights
Getting recognition for your product or service is indeed deserving because you took an idea and built it into something actionable with your own innovation. And to keep that light burning, you need the protection. However, the Indian startup scenario for IP is a bit different.
IP Rights for software in India are such that they only apply to the code and the final product. In other words, if you get your copyright, it will protect the form and not the final substance.
Another important thing is that you cannot file a patent application for software in India. What you can do is get a patent on software and hardware integration. This means that if a software is dependent on any form of hardware, then you can get a patent. But software alone cannot be patented.
As for your User Interface/Experience, You can get a patent provided it is unique. Its level of uniqueness will decide whether or not you can get a patent for it.
Co-Founders Legal Considerations
You may have found your ideal co-founder. But, have you gone through the requirements and legal considerations it requires? Majorly, a co-founder agreement lists the equity ownership, initial investments and the roles and responsibilities given to each founder.
Surely, there has to be a legal contract listing all the guidelines. This type of contract ensures that both the founders have an apt understanding of their functioning in the company.
You need to carefully examine each and every term associated with the partnership and set the boundaries. Even if the venture is at an initial stage, you need to set these boundaries.
You will find that there are a few other legal documents that you need to check out while operating a startup in India.
Be very careful with the legal considerations. If possible, take assistance from a certified lawyer and an accountant to set up your operations properly. The penalties and fines of not following them are high. Moreover, they can also become a reason for shattering your dream startup to pieces.
Talking about penalties and fines, money is also a critical factor for any startup. Basically, you cannot fully understand how to start a startup in India without looking into funding options.
Chapter 5: Money Matters
90% of the startups fail in the first five years of their launch and many of these are because of the money crunch. Sometimes, the founders do not get enough fuel to keep the engine running, while others fail in using it optimally.
Therefore, getting your startup funded is important, but gaining the ability to utilize that money smartly also matters. Right from the beginning, you need to start making a startup budget that is well within your limitations.
Once you have gained the funding, start spending it smartly and on those things that help you grow. But before discussing how to use the money, let’s first know how to acquire it.
There are various methods to raise money for your startup in India ( here’s a detailed guide ):
- Friends and Family : We always look towards the family first if we want something. Especially with the societal norms and family culture existing in India, asking your friends and family for initial funding looks like a great option. However, understand this is a two-way road and there are some specific pros and cons associated with this method. Make sure you consider them before jumping in.
- Bootstrapping : One of the best methods to fund your startup is by your own savings or bootstrapping. The reason being that you won’t have to answer to anyone where the money went. There is no interest, no complications about paying the money back, and so on.
- Incubators : Early stage startups can look forward to getting the funding from business incubators and accelerators. The difference between an incubator is they teach and train in everything. Just like a child is taught everything from the day it is born. Accelerators, however, are a bit advanced, and they move on to help you run or leap ahead in your venture. There are various incubators and accelerators in India that you can choose from.
- Angel Investors : There are a lot of already established angel investors in India who have funded several startups. Angel investment is a kind of funding activity whereby individuals with surplus cash and interest to invest in different baskets help startups launch and expand. The Indian Angel Investor network is also huge, and you will be able to find the right investor for your startup.
- Venture Capitalists : Venture capitalists are the biggest sharks in the ocean of startup ecosystems. These guys invest big and also help already expanding startups to outgrow themselves. In the Indian parlance, most of the VCs have come from other countries and set base here. Here is a list of the top venture capitalists in India . However, note that convincing the VCs is not easy; having a credible and really unique pitch is equally important as having a disruptive and innovative product.
- Crowdfunding : Crowdfunding is a great option to fund your startup, provided you have an idea that can convince the masses. Here’re some crowdfunding platforms in India . Several people will look at your product there and if they like it, they pledge their investments to develop your product and take it to the next stage ahead of a prototype. Crowdfunding generates many benefits , one of which is free marketing since your investors will surely spread the word for your idea and rope in more people.
- Bank Loans : Funding from banks can take the form of loans or line of credit (working capital loan). Entrepreneurs still consider banks as their first preference and a safe bet to get funding for their startups. Seeing the rising trends of startups in India , several banks have set dedicated funding options for SMEs and startups . Loans entail the standard process wherein you provide the bands with necessary details, business model, and collateral to get the funding.
- Government grants : The Indian government also provides funding to startups in India via several grants and schemes . Government schemes for startups in India like Mudra loans, 10,000 Crore Startup Fund, and others, show that the government wants to develop a conducive environment for startups in the country. Startups bring growth to the Indian economy, and the government is reciprocating further bolster that growth with such schemes and grants. Within this funding form, the Startup India Scheme deserves special mention.
Startup India Scheme
The Startup India Scheme is a flagship program under the Startup India Initiative . This scheme was launched with the motivation of bolstering the innovation of new products and services in the Indian economy. Under this scheme, the startups have to undergo DPIIT registration and complete other formalities to get certain benefits, some of which are:
- Simplifying the work processes from registration to setting up the basic infrastructure.
- Providing financial support to startups via different government-run startup funding schemes .
- Helping the founders grow their network and exploit such opportunities presented by the government.
- Early-stage startups can also benefit from income tax exemptions, intellectual property benefits, along with a few other perks.
In the latest statement by the DPIIT (Department for Promotion of Industry and Internal Trade) it was stated that about 28000 startups have registered with the DPIIT until the 1st of February, 2020.
It does not matter what kind of startup you are trying to build, funds will be essential. Added with the funds, it is equally vital to build your brand. In the next sections, we will take up how to build your startup’s brand and how to ensure its growth.
Chapter 6: Branding, Website & Launch
Once the funds are arranged for your startup, then comes the actual work of building your organization on different levels. Until now, your work was just revolving around an idea. But now it’s time to start the real work from ground zero.
This chapter will cover some of the essentials of building a startup. It will lead you to the knowledge of various aspects of building an organization from its brand name to the website to its launching.
Building the Brand
Branding your startup essentially means to establish an identity for your business. The identity of your brand holds your uniqueness amongst other competitors in the market. A brand has its own voice, image, and personality that makes it recognizable for the people.
For instance, when you hear the name Pepsi, what jumps right to your mind? Certainly, their blue ribbon, logo, advertisement, or something related to that drink. This is the power of branding. When people start visualizing your brand when they hear its name, that’s when it can be considered established.
Building your brand identity is a long term plan ( here’s a detailed article on the topic ). There are several organizations that initially avoid this step and are eager to jump directly into the operations. When you build a brand identity from the start, it gradually makes its name in the marketplace. Once it acquires a significant amount of attention, then whatever product you launch, people are bound to show their interest in it.
Designing Logo for the Organization
The best is to outsource the logo designing process to a professional branding agency. While designing the brand logo, there are various parameters like the color palette, typography, and graphics that need to be taken into account. Professional agencies have the expertise to understand the mechanisms of color combinations and graphics that can attract customers.
xVS Creations , Ascent Web Portal , DesignHill , and Indesign Elements are some of the prominent branding agencies in India. They can help you with all your design needs with premium quality results. There are many global online platforms too that where you can find masters in this field like 99designs (recommended) and Fiverr (recommended). You must explore all the options before picking a suitable choice for yourself.
Building the Website
Creating the website for your startup is crucial. A website is the best platform for the interaction between you and your customers. It helps you to stay active in the competitive market and it also is a fantastic way to attract a lot of potential customers to your business.
A website plays a significant role in creating a potential business market for any startup company in India or outside. The given steps are involved in the creation process of a website:
Picking a Domain Name
The domain name is usually named after your brand name to achieve singularity in your brand identity. There are multiple domain providers through which you can purchase a domain name for your website. Some of the popular domain registrars are as follow:
- GoDaddy (Recommended): This is one of the most popular domain agencies in India. It provides domain names at the lowest prices.
- Namecheap (Recommended): Offers multiple services like selling domain names, VPS hosting, web hosting, and others.
- BigRock : They are known for providing cost-effective domain names.
- Hostinger : Offers domain names and services that provide high-speed performance.
- BlueHost : They offer several packages that are inclusive of registering domain names, hosting, and website development.
Finding a Hosting
The work of a hosting company is to connect your website with the internet. You can think of it as a hard drive where all the information is stored for the usage.
While picking a host, check for their customer support reviews, functioning of other websites that are being hosted by them, and do they provide all required features.
GoDaddy (recommended), Hostinger , BlueHost , etc. are some of the Indian hosting companies that you can work with to run your website. Some global ones are Amazon AWS , Cloudflare , Rackspace , and Unified Layer .
Majorly, there are three types of hosting plans.
Shared Hosting
Shared hosting is one of the most popular and cost-effective hosting plans. It involves sharing your server with other websites. This plan is usually limited to one domain. Most small organizations and startups pick this plan for the start of their website.
It gives them a space to start their websites and also does not get heavy on their pockets. However, note you get limited data storage and bandwidth, which may affect the speed of your website.
Dedicated Servers
This is an expensive hosting plan as it gives you a dedicated server for running your website. The range of bandwidth is comparatively very high and it doesn’t put pressure on your website, as much traffic may arrive. The website under this hosting plan has significantly greater speed than others.
Note: You may choose a shared hosting plan and later transition the hosting to a dedicated server.
Reseller Accounts
The reseller accounts are usually for the people who wish to run multiple sites under a single account. This type of hosting plan is mostly taken by the people who are running eCommerce websites.
Designing & Developing the Site
Getting your website built by hired professionals may be a more expensive option than building it yourself, but it definitely produces some fruitful results, unless you have the required knowledge and expertise in the field.
To outsource the design of your website, you may hire an agency or freelancer. You may want check Upwork (recommended), Fiverr (recommended) or Freelancer if you wish to find and hire one of these.
If you are willing to put your hands in the task, you can use no-code tools like Webflow (recommended), Bubble (recommended) & WordPress requiring no programming knowledge. During 2020, a handful of other tools have popped-up to make it easier to build a basic website. Among these tools you can find Carrd , Softr , and Dorik .
Building the Office
Building the brand name and website is a relatively easier task than establishing a physical office. If you have the required staff and budget to open an office for your startup, nothing can be better.
Having a professional space hugely enhances the growth of the business as customers see it as a more reliable source. Having your own office is one of the essential milestone for your startups.
In these modern times, you must also focus on building stylish and innovative office spaces for your work. This positively impacts the people working in the office and also puts a good impression on the incoming customers.
There are several good interior designers in India that can provide the professional looks to your office as per your business profile. Some of the most popular ones are Urban India Design , Kinzaa , De Panche , and D5 Design Factory .
If you prefer or need to work remotely, there are several tools to improve team communication that have made an impact in 2020. You can create a virtual office with Gather.town or avoid video calls fatigue with Around .
On completion of all the above-given parameters, your startup will be all set to launch. Before you launch and present your business to the world, you must prepare the launching campaigns . These are some of the essential steps that will help you make a better launch in the market.
Create Hype
Creating a hype at the last minute won’t make much difference. It is essential from the very first day of your startup building process, you start to create a fuzz about yourself in the market.
Start sharing your brand name and the services in social media, start writing blogs and articles. Until the time of its launch, you must have a significant population waiting for the service to be launched.
Giving Freebies and Entertainment
One of the best ways to seek the attention of the Indian audience is to provide them with free stuff and entertainment. Collaborate with some renowned artists that you can afford and start promoting your brand through them.
You may also set up a small entertainment zone in a mall where you can entertain the people through various activities and promote the name of your brand.
Stay Clear from Other Big Brands Launches
Do check out the launching dates of other brands. You do not want to clash your launch date with some big brand. It may lose an ample amount of attention to your brand.
Press Release your Service
Nothing can be better if you have the required budget and potential to launch the startup through a press release. The media will provide sufficient attention to the world about your service. If you are willing to opt for it, make sure your teams are all prepared with the set of questions that may be asked about the product and the service.
The launch of your startup is not the end of the process but just the beginning. Once the launch is done, then it comes the phase of making your startup grow to its full potential. You may have to create several marketing strategies and post-launch campaigns to make your brand grow bigger. Go through the next chapter that will guide you through the approaches you need to hasten the development process of your startup company.
Chapter 7: Growing your Startup
Let’s talk about growth now. Once you have established a basic foundation of your startup, you can think of growing. More importantly, you need to know the right time to grow or scale your startup.
But before we go there, you must be prepared to scale your startup. How to start growing is a different debate? Initially, you need some solid footwork on the ground.
Also, remember that knowing when to be bearish is as important as being bullish in your startup. As a founder, you need to know when not to scale your startup .
Scaling is like work in progress and you need to leverage foolproof marketing strategies for keeping up with the growth momentum. Apt marketing strategies ensure user engagement and convinces them to take the desired action.
One of the most important things to understand in how to start a tech startup in India is practicing foolproof marketing strategies. With apt marketing, you will gain the attention of the audience and excite their thinking neurons. And if the product is something that the customers really want, they will engage and reach out.
Some Marketing Strategies
Sending emails.
Starting an email marketing campaign is a great way to attract new customers. Email marketing holds a better engagement rate and can be used for almost all kinds of businesses and products.
Have a blog for your startup
If you are solving a pain for your customers and they are looking for ways to solve it online, you need to have your blog. Blogs are one of the most organic ways to attract an audience and potential customers that will help you grow.
Be on Social Networks
4.57 Billion . These many people are active on social media every month. And out of them, Facebook has 2.4 billion users, Instagram has 1 billion, Youtube 2 billion, and the list goes on.
Creating a social media marketing strategy is your answer to growth-oriented startup plans in India. Social media is a big game, so you may need the assistance of expert social media marketers to get the desired results.
You can implement other suitable marketing strategies for your brand growth and scale. Measures like sponsoring an event or PPC advertisements can also help you gain some traction.
More importantly, setting a marketing budget for your startup is also important. You cannot flood loads of money that you have acquired either from bootstrapping or via startup India loan or any other way.
Handling Sales
It is evident that you cannot hire a top-notch sales team right at the nascent stage of starting a startup in India. That may come later, but presently, you may need to look at things yourself or hire a couple of guys to look after it.
To this end, it is important that you also partake in this activity and try to manage the sales part effectively. Building your sales team is an essential part of growing the startup.
Apart from building a team handling sales means that you need to handle the account well. Hiring a dedicated chartered accountant at this juncture can be a costly affair. However, you can utilize cloud-based tools like Quickbooks , Tally , and Zoho Books to keep the account up to date. All the online tools have tutorials to guide how to use them and work with them.
Preparing for some Unprecedented Situations
Sometimes humankind is faced with situations that are completely out of our control. It can be a natural disaster, a war-like situation, or even a pandemic. The important thing is to understand that these situations may be temporary, but their effects can be permanent.
So, on your part, you need to prepare yourself beforehand to mitigate the risks related to such situations.
At present we are facing a pandemic, and nobody was prepared for it. But we can only change our strategies after we are in this kind of turmoil. For instance, take a look at how these 10 Indian startups are dealing with the COVID 19 pandemic.
These startups are using technology to their benefit and also helping the nation fight. Some are helping make ventilators, hospital beds, while others are creating tech solutions for monitoring and tracking.
Apart from this, you need to prepare an emergency plan in case the pandemic has direct effects on your startup and revamp its protection strategy .
This brings us to the end of how to start a startup in India guide. We have talked about everything that you need to follow, understand, and practice to run a successful business.
And if you are thinking about when you should start your startup, understand that “any time is a good time to start a company,” something very well said by Ron Conway .
We have tried to include everything that you need to know about starting a startup in India. If you have any questions, let us know by sending an email at [email protected] .
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Business Plan: What It Is and How to Write One in 9 Steps
Business plans aren’t just for entrepreneurs who need to secure funding—they can help you plan and evaluate new ideas or growth plans, too. Find out how to write a business plan and get the most out of the process in this comprehensive guide.
A great business plan can help you clarify your strategy, identify potential roadblocks, determine necessary resources, and evaluate the viability of your idea and growth plan before you start a business .
Not every successful business launches with a formal business plan, but many founders find value in the process. When you make a business plan, you get to take time to step back, research your idea and the market you’re looking to enter, and understand the scope and the strategy behind your tactics.
Learn how to write a business plan with this step-by-step guide, including tips for getting the most of your plan and real business plan examples to inspire you.
What is a business plan?
A business plan is a strategic document that outlines a company’s goals, strategies for achieving them, and the time frame for their achievement. It covers aspects like market analysis , financial projections, and organizational structure. Ultimately, a business plan serves as a roadmap for business growth and a tool to secure funding.
Often, financial institutions and investors need to see a business plan before funding any project. Even if you don’t plan to seek outside funding, a well-crafted plan becomes the guidance for your business as it scales.
The key components of a business plan
Putting together a business plan will highlight the parts of your company’s strategy and goals. It involves several key business plan components that work together to show the roadmap to your success.
Your business plan’s key components should include:
- Executive summary: A brief overview of your entire plan.
- Company description: An explanation of what your business does and why it’s unique.
- Market analysis: Research on your industry, target market, and competitors.
- Organization and management: Details about your business structure and the people running it.
- Products or services: A description of what you’re selling and how it benefits customers.
- Customer segmentation: A breakdown of your target market into different groups.
- Marketing and sales plan: The strategy for promoting and selling your products and services.
- Logistics and operations: An overview of how your business will run its daily activities and manage resources.
- Financials: A complete look at projected income, expenses, and funding needs.
How to write a business plan in 9 steps
- Draft an executive summary
- Write a company description
- Perform a market analysis
- Outline the management and organization
- List your products and services
- Perform customer segmentation
- Define a marketing plan
- Provide a logistics and operations plan
- Make a financial plan
Few things are more intimidating than a blank page. Starting your business plan with a structured outline and key elements for what you’ll include in each section is the best first step you can take.
Since an outline is such an important step in the process of writing a business plan, we’ve put together a high-level overview to get you started (and help you avoid the terror of facing a blank page).
Once you have your business plan template in place, it’s time to fill it in. We’ve broken it down by section to help you build your plan step by step.
1. Draft an executive summary
A good executive summary is one of the most crucial sections of your business plan—it’s also the last section you should write.
The executive summary distills everything that follows and gives time-crunched reviewers (e.g., potential investors and lenders) a high-level overview of your business that persuades them to read further.
Again, it’s a summary, so highlight the key points you’ve uncovered while writing your plan. If you’re writing for your own planning purposes, you can skip the summary altogether—although you might want to give it a try anyway, just for practice.
An executive summary shouldn’t exceed one page. Admittedly, that space constraint can make squeezing in all of the salient information a bit stressful—but it’s not impossible.
Your business plan’s executive summary should include:
- Business concept. What does your business do?
- Business goals and vision. What does your business want to accomplish?
- Product description and differentiation. What do you sell, and why is it different?
- Target market. Who do you sell to?
- Marketing strategy. How do you plan on reaching your customers?
- Current financial state. What do you currently earn in revenue?
- Projected financial state. What do you foresee earning in revenue?
- The ask. How much money are you asking for?
- The team. Who’s involved in the business?
2. Write a company description
This section of your business plan should answer two fundamental questions:
- Who are you?
- What do you plan to do?
Answering these questions with a company description provides an introduction to why you’re in business, why you’re different, what you have going for you, and why you’re a good investment.
For example, clean makeup brand Saie shares a letter from its founder on the company’s mission and why it exists.
Clarifying these details is still a useful exercise, even if you’re the only person who’s going to see them. It’s an opportunity to put to paper some of the more intangible facets of your business, like your principles, ideals, and cultural philosophies.
Here are some of the components you should include in your company description:
- Your business structure (Are you a sole proprietorship, general partnership, limited partnership, or incorporated company?)
- Your business model
- Your industry
- Your business’s vision, mission, and value proposition
- Background information on your business or its history
- Business objectives, both short and long term
- Your team, including key personnel and their salaries
Brand values and goals
To define your brand values , think about all the people your company is accountable to, including owners, employees, suppliers, customers, and investors. Now consider how you’d like to conduct business with each of them. As you make a list, your core values should start to emerge.
Your company description should also include both short- and long-term goals. Short-term goals, generally, should be achievable within the next year, while one to five years is a good window for long-term goals. Make sure your goal setting includes SMART goals : specific, measurable, attainable, realistic, and time-bound.
Vision and mission statements
Once you know your values, you can write a mission statement . Your statement should explain, in a convincing manner, why your business exists, and should be no longer than a single sentence.
Next, craft your vision statement : What impact do you envision your business having on the world once you’ve achieved your vision? Phrase this impact as an assertion—begin the statement with “We will” and you’ll be off to a great start. Your vision statement, unlike your mission statement, can be longer than a single sentence, but try to keep it to three at most. The best vision statements are concise.
3. Perform a market analysis
Market analysis is a key section of your business plan, whether or not you ever intend for anyone else to read it.
No matter what type of business you start, whether a home-based business or service-based, it’s no exaggeration to say your market can make or break it. Choose the right market for your products—one with plenty of customers who understand and need your product—and you’ll have a head start on success.
If you choose the wrong market, or the right market at the wrong time, you may find yourself struggling for each sale. Your market analysis should include an overview of how big you estimate the market is for your products, an analysis of your business’s position in the market, and an overview of the competitive landscape. Thorough research supporting your conclusions is important both to persuade investors and to validate your own assumptions as you work through your plan.
How big is your potential market?
The potential market is an estimate of how many people need your product. While it’s exciting to imagine sky-high sales figures, you’ll want to use as much relevant independent data as possible to validate your estimated potential market.
Since this can be a daunting process, here are some general tips to help you begin your research:
- Understand your ideal customer profile. Look for government data about the size of your target market , learn where they live, what social channels they use, and their shopping habits.
- Research relevant industry trends and trajectory. Explore consumer trends and product trends in your industry by looking at Google Trends, trade publications, and influencers in the space.
- Make informed guesses. You’ll never have perfect, complete information about your total addressable market. Your goal is to base your estimates on as many verifiable data points as necessary.
Some sources to consult for market data include government statistics offices, industry associations, academic research, and respected news outlets covering your industry.
Read more: What is a Marketing Analysis? 3 Steps Every Business Should Follow
SWOT analysis
A SWOT analysis looks at your strengths, weaknesses, opportunities, and threats.
That involves asking questions like:
- What are the best things about your company?
- What are you not so good at?
- What market or industry shifts can you take advantage of and turn into opportunities?
- Are there external factors threatening your ability to succeed?
SWOT is often depicted in a grid or otherwise visual way. With this visual presentation, your reader can quickly see the factors that may impact your business and determine your competitive advantage in the market.
Competitive analysis
There are three overarching factors you can use to differentiate your business in the face of competition:
- Cost leadership. You have the capacity to maximize profits by offering lower prices than the majority of your competitors. Examples include companies like Mejuri and Endy .
- Differentiation. Your product or service offers something distinct from the current cost leaders in your industry and banks on standing out based on your uniqueness. Think of companies like Knix and QALO .
- Segmentation. You focus on a very specific, or niche, target market, and aim to build traction with a smaller audience before moving on to a broader market. Companies like TomboyX and Heyday Footwear are great examples of this strategy.
To understand which is the best fit, you’ll need to understand your business as well as the competitive landscape.
You’ll always have competition in the market, even with an innovative product, so it’s important to include a competitive overview in your business plan. If you’re entering an established market, include a list of a few companies you consider direct competitors and explain how you plan to differentiate your products and business from theirs.
For example, if you’re selling jewelry , your competitive differentiation could be that, unlike many high-end competitors, you donate a percentage of your profits to a notable charity or pass savings on to your customers.
If you’re entering a market where you can’t easily identify direct competitors, consider your indirect competitors—companies offering products that are substitutes for yours. For example, if you’re selling an innovative new piece of kitchen equipment, it’s too easy to say that because your product is new, you have no competition. Consider what your potential customers are doing to solve the same problems.
4. Outline the management and organization
The management and organization section of your business plan should tell readers about who’s running your company. Detail the legal structure of your business. Communicate whether you’ll incorporate your business as an S corporation or create a limited partnership or sole proprietorship.
If you have a management team, use an organizational chart to show your company’s internal structure, including the roles, responsibilities, and relationships between people in your chart. Communicate how each person will contribute to the success of your startup.
5. List your products and services
Your products or services will feature prominently in most areas of your business plan, but it’s important to provide a section that outlines key details about them for interested readers.
If you sell many items, you can include more general information on each of your product lines. If you only sell a few, provide additional information on each.
For example, bag shop BAGGU sells a large selection of different types of bags, in addition to home goods and other accessories. Its business plan would list out those categories and key details about the products within each category.
Describe new products you’ll launch in the near future and any intellectual property you own. Express how they’ll improve profitability. It’s also important to note where products are coming from—handmade crafts are sourced differently than trending products for a dropshipping business, for instance.
6. Perform customer segmentation
Your ideal customer, also known as your target market, is the foundation of your marketing plan , if not your business plan as a whole.
You’ll want to keep this buyer persona in mind as you make strategic decisions, which is why an overview of who they are is important to understand and include in your business plan.
To give a holistic overview of your ideal customer, describe a number of general and specific demographic characteristics. Customer segmentation often includes:
- Where they live
- Their age range
- Their level of education
- Some common behavior patterns
- How they spend their free time
- Where they work
- What technology they use
- How much they earn
- Where they’re commonly employed
- Their values, beliefs, or opinions
This information will vary based on what you’re selling, but you should be specific enough that it’s unquestionably clear who you’re trying to reach—and more importantly, why you’ve made the choices you have based on who your customers are and what they value.
For example, a college student has different interests, shopping habits, and pricing sensitivity than a 50-year-old executive at a Fortune 500 company. Your business plan and decisions would look very different based on which one was your ideal customer.
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Shopify’s built-in segmentation tools help you discover insights about your customers, build segments as targeted as your marketing plans with filters based on your customers’ demographic and behavioral data, and drive sales with timely and personalized emails.
7. Define a marketing plan
Your marketing efforts are directly informed by your ideal customer. That’s why, as you outline your current decisions and future strategy, your marketing plan should keep a sharp focus on how your business idea is a fit for that ideal customer.
If you’re planning to invest heavily in Instagram marketing or TikTok ads , for example, it makes sense to include whether Instagram and TikTok are leading platforms for your audience. If the answer is no, that might be a sign to rethink your marketing plan.
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Most marketing plans include information on four key subjects. How much detail you present on each will depend on both your business and your plan’s audience.
- Price: How much do your products cost, and why have you made that decision?
- Product: What are you selling and how do you differentiate it in the market?
- Promotion: How will you get your products in front of your ideal customer?
- Place: Where will you sell your products? On what channels and in which markets?
Promotion may be the bulk of your plan, since you can more readily dive into tactical details, but the other three areas should be covered at least briefly—each is an important strategic lever in your marketing mix.
8. Provide a logistics and operations plan
Logistics and operations are the workflows you’ll implement to make your business idea a reality. If you’re writing a business plan for your own planning purposes, this is still an important section to consider, even though you might not need to include the same level of detail as if you were seeking investment.
Cover all parts of your planned operations, including:
- Suppliers. Where do you get the raw materials you need for production, or where are your products produced?
- Production. Will you make, manufacture, wholesale , or dropship your products? How long does it take to produce your products and get them shipped to you? How will you handle a busy season or an unexpected spike in demand?
- Facilities. Where will you and any team members work? Do you plan to have a physical retail space? If yes, where?
- Equipment. What tools and technology do you require to be up and running? This includes everything from software to lightbulbs and everything in between.
- Shipping and fulfillment. Will you be handling all the fulfillment tasks in-house, or will you use a third-party fulfillment partner?
- Inventory. How much will you keep on hand, and where will it be stored? How will you ship it to partners if required, and how will you approach inventory management ?
This section should signal to your reader that you’ve got a solid understanding of your supply chain, with strong contingency plans in place to cover potential uncertainty. If your reader is you, it should give you a basis to make other important decisions, like how to price your products to cover your estimated costs, and at what point you anticipate breaking even on your initial spending.
9. Make a financial plan
No matter how great your idea is—and regardless of the effort, time, and money you invest—a business lives or dies based on its financial health. At the end of the day, people want to work with a business they expect to be viable for the foreseeable future.
The level of detail required in your financial plan will depend on your audience and goals, but typically you’ll want to include three major views of your financials: an income statement, a balance sheet, and a cash-flow statement. It also may be appropriate to include financial data and projections.
Here’s a spreadsheet template that includes everything you’ll need to create an income statement, balance sheet, and cash-flow statement, including some sample numbers. You can edit it to reflect projections if needed.
Let’s review the types of financial statements you’ll need.
Income statements
Your income statement is designed to give readers a look at your revenue sources and expenses over a given time period. With those two pieces of information, they can see the all-important bottom line or the profit or loss your business experienced during that time. If you haven’t launched your business yet, you can project future milestones of the same information.
Balance sheets
Your balance sheet offers a look at how much equity you have in your business. On one side, you list all your business assets (what you own), and on the other side, all your liabilities (what you owe).
This provides a snapshot of your business’s shareholder equity, which is calculated as:
Assets - Liabilities = Equity
Cash flow statements
Your cash flow statement is similar to your income statement, with one important difference: it takes into account when revenues are collected and when expenses are paid.
When the cash you have coming in is greater than the cash you have going out, your cash flow is positive. When the opposite scenario is true, your cash flow is negative. Ideally, your cash flow statement will help you see when cash is low, when you might have a surplus, and where you might need to have a contingency plan to access funding to keep your business solvent .
It can be especially helpful to forecast your cash-flow statement to identify gaps or negative cash flow and adjust operations as required.
📚 Read more: Cash Flow Management: What It Is & How To Do It (+ Examples)
Why write a business plan?
Investors rely on business plans to evaluate the feasibility of a business before funding it, which is why business plans are commonly associated with getting a business loan.
Business plans also help owners identify areas of weakness before launching, potentially avoiding costly mistakes down the road. “Laying out a business plan helped us identify the ’unknowns’ and made it easier to spot the gaps where we’d need help or, at the very least, to skill up ourselves,” says Jordan Barnett, owner of Kapow Meggings .
There are several other compelling reasons to consider writing a business plan, including:
- Strategic planning. Writing out your plan is an invaluable exercise for clarifying your ideas and can help you understand the scope of your business, as well as the amount of time, money, and resources you’ll need to get started.
- Evaluating ideas. If you’ve got multiple ideas in mind, a rough business plan for each can help you focus your time and energy on the ones with the highest chance of success.
- Research. To write a business plan, you’ll need to research your ideal customer and your competitors—information that will help you make more strategic decisions.
- Recruiting. Your business plan is one of the easiest ways to communicate your vision to potential new hires and can help build their confidence in the venture, especially if you’re in the early stages of growth.
- Partnerships. If you plan to collaborate with other brands , having a clear overview of your vision, your audience, and your business strategy will make it much easier for them to identify if your business is a good fit for theirs.
- Competitions. There are many business plan competitions offering prizes such as mentorships, grants, or investment capital.
If you’re looking for a structured way to lay out your thoughts and ideas, and to share those ideas with people who can have a big impact on your success, making a business plan is an excellent starting point.
Business plan types
Business plan types can span from one page to multiple pages, with detailed graphs and reports. There’s no one right way to create a business plan. The goal is to convey the most important information about your company for readers.
Common business plans we see include, but are not limited to, the following types:
Traditional business plans
These are the most common business plans. Traditional business plans take longer to write and can be dozens of pages long. Venture capitalist firms and lenders ask for this plan. Traditional business plans may not be necessary if you don’t plan to seek outside funding. That’s where a lean business plan comes in.
Lean business plans
A lean business plan is a shorter version of a traditional business plan. It follows the same format, but only includes the most important information. Businesses use lean business plans to onboard new hires or modify existing plans for a specific target market. If you want to write a business plan purely for your own planning purposes when starting a new small business, a lean business plan is typically the way to go.
Nonprofit business plans
A nonprofit business plan is for any entity that operates for public or social benefit. It covers everything you’ll find in a traditional business plan, plus a section describing the impact the company plans to make. For example, a speaker and headphone brand would communicate that they aim to help people with hearing disabilities. Donors often request this type of business plan.
📚 Read more: 7 Business Plan Examples to Inspire Your Own (2024)
7 tips for creating a small business plan
There are a few best practices when it comes to writing a business plan. While your plan will be unique to your business and goals, keep these tips in mind as you write.
1. Know your audience
When you know who will be reading your plan—even if you’re just writing it for yourself to clarify your ideas—you can tailor the language and level of detail to them. This can also help you make sure you’re including the most relevant information and figure out when to omit sections that aren’t as impactful.
2. Have a clear goal
When creating a business plan, you’ll need to put in more work and deliver a more thorough plan if your goal is to secure funding for your business, versus working through a plan for yourself or your team.
3. Invest time in research
Sections of your business plan will primarily be informed by your ideas and vision, but some of the most crucial information you’ll need requires research from independent sources. This is where you can invest time in understanding who you’re selling to, whether there’s demand for your products, and who else is selling similar products or services.
4. Keep it short and to the point
No matter who you’re writing for, your business plan should be short and readable—generally no longer than 15 to 20 pages. If you do have additional documents you think may be valuable to your audience and your goals, consider adding them as appendices.
5. Keep the tone, style, and voice consistent
This is best managed by having a single person write the plan or by allowing time for the plan to be properly edited before distributing it.
6. Use a business plan template
You can also use a free business plan template to provide a skeleton for writing a plan. These templates often guide you through each section—from financial projects to market research to mission statement—ensuring you don’t miss a step.
7. Try business plan software
Writing a business plan isn’t the easiest task for business owners. But it’s important for anyone starting or expanding a business.
Fortunately, there are tools to help with everything from planning, drafting, creating graphics, syncing financial data, and more. Business plan software also has business plan templates and tutorials to help you finish a comprehensive plan in hours, rather than days.
A few curated picks include:
- LivePlan : the most affordable option with samples and templates
- Bizplan : tailored for startups seeking investment
- Go Small Biz : budget-friendly option with industry-specific templates
📚 Read more: 6 Best Business Plan Software Platforms (2024)
Common mistakes when writing a business plan
Other articles on business plans would never tell you what we’re about to tell you: Your business plan can fail.
The last thing you want is for time and effort to go down the drain, so avoid these common mistakes:
- Bad business idea. Sometimes your idea may be too risky for potential investors or too expensive to run, or there’s no market. Aim for small business ideas that require low startup costs.
- No exit strategy. If you don’t show an exit strategy, or a plan for investors to leave the business with maximum profits, you’ll have little luck securing capital.
- Unbalanced teams. A great product is the cost of entry to starting a business. But an incredible team will take it to the top. Unfortunately, many business owners overlook a balanced team. They focus on potential profits, without worrying about how it will be done operationally.
- Missing financial projections. Don’t forget your balance sheet, cash flow statements, P&L statements, and income statements. Include your break-even analysis and return-on-investment calculations in your financial projections to create a successful business plan.
- Spelling and grammar errors. All the best organizations have an editor review their documents. If someone spots typos while reading your business plan, sloppy errors like those can evoke a larger sense of distrust in your capabilities to run a successful company. It may seem minor, but legibility and error-free writing helps make a good impression on your business plan’s audience.
Updating and revising a business plan
Business plans aren’t static documents. The business world moves fast and your plan will need to keep up. You don’t want it to get stale.
Here’s a good rule of thumb for business plan revisions:
Review Period | Action |
---|---|
Annual | |
Quarterly | |
Monthly |
- Monthly: Update KPIs like sales, website traffic, and customer acquisition costs. Review your cash flow. Is your money situation as expected? Make the necessary changes.
- Quarterly : Are you hitting your targets? Be sure to update your financial performance, successful marketing campaigns, and any other recent milestones achieved.
- Yearly : Think of this as a big overhaul. Compare projections to actuals and update your forecasts.
When updating your plan, don’t just go with your gut. Use data like surveys and website analytics to inform each update. Using outdated information will only lead to confusion and missed opportunities.
Remember not to just update one part of your plan—it’s all connected. Fortunately, with business plan software you can easily give your plan attention and help your business thrive.
How to present a business plan
Here are some tips for presenting your business plan to stakeholders.
Understand your audience
Start by doing homework on who you’ll be presenting to. Are they investors, potential partners, or a bank? Each group will have different interests and expectations.
Consider the following about your presentation audience:
- Background: What’s their professional experience?
- Knowledge level: How familiar are they with your industry?
- Interests: What aspects of your plan will excite them most?
- Concerns: What might make them hesitant about your idea?
Depending on who you’re presenting to, you can tweak your presentation accordingly. For example, if you’re presenting to a group of investors, you’d probably want to highlight financial projections and market analysis.
Structure your presentation
Once you know your audience, you can organize your presentation. Think of this as the story you’ll tell listeners. A well-structured presentation helps listeners follow along and remember key points.
Your opening should grab attention and give a snapshot of what’s to come. It’s kind of like an elevator pitch that gives an overview of your business idea.
From there, break your presentation into clear sections:
- Problem: What issue are you solving?
- Solution: How does your business address this problem?
- Market: Who are your potential customers?
- Competition: Who else is in this space, and how are you different?
- Business model: How will you make money?
- Financial projections: What are your expected costs and revenues?
- Team: Who’s involved, and what makes them qualified?
Use visual aids to support your points. Graphs, charts, and even simple illustrations can make your information more digestible. Remember to practice your timing, too. A good presentation flows smoothly, giving each section the right amount of attention for its intended audience.
Handle objections and questions
Facing objections or questions can be nerve-wracking, but it’s actually a great opportunity. It shows your listeners are engaged and thinking critically about your idea. The key is to be prepared and stay calm.
Try to anticipate potential questions. Put yourself in the listener’s shoes: What would you want to know if you were them? Come up with clear answers to these questions ahead of time.
When handling questions:
- Listen carefully: Make sure you fully understand the question before answering.
- Stay positive: Even if the question seems critical, respond with enthusiasm.
- Be honest: If you don’t know something, it’s OK. Offer to find out and follow up.
Use questions as a way to highlight the strengths of your business plan. If a question needs more thought or refresh, it’s perfectly fine to say, “That’s a great question. I’d love to look further into it and get back to you with a detailed answer.”
Handling questions well shows that you’re knowledgeable, thoughtful, and open to feedback—all things that will impress listeners and make them feel confident in your business plan.
Prepare your business plan today
A business plan can help you identify clear, deliberate next steps for your business, even if you never plan to pitch investors—and it can help you see gaps in your plan before they become issues.
Whether you’re working on starting a new online business idea , building a retail storefront, growing your established business, or purchasing an existing business , you now understand how to write a business plan that suits your business’s goals and needs.
Feature illustration by Rachel Tunstall
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Business plan FAQ
How do i write a business plan.
Learning how to write a business plan is simple if you use a business plan template or business plan software. Typically, a traditional business plan for every new business should have the following components:
- Executive summary
- Company description, including value proposition
- Market analysis and competitive analysis
- Management and organization
- Products and services
- Customer segmentation
- Marketing plan
- Logistics and operations
- Financial plan and financial projections
What is a good business plan?
A good business plan clearly communicates your company’s purpose, goals, and growth strategies. It starts with a strong executive summary, then adequately outlines idea feasibility, target market insights, and the competitive landscape.
A business plan template can help businesses be sure to follow the typical format of traditional business plans, which also include financial projections, details about the management team, and other key elements that venture capital firms and potential investors want to see.
What are the 3 main purposes of a business plan?
The three main purposes of a business plan are:
- To clarify your plans for growth
- To understand your financial needs
- To attract funding from investors or secure a business loan
What are the different types of business plans?
The types of business plans include startup, refocusing, internal, annual, strategic, feasibility, operations, growth, and scenario-based. Each type of business plan has a different purpose. Business plan formats include traditional, lean, and nonprofit. Find a business plan template for the type of plan you want to write.
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