What are you doing and why? What is the opportunity for others to accompany you on the journey? These are some of the questions you ask yourself when developing a business plan.
Essentially, a business plan will be used when you are looking to raise funding for your startup and want to do so using secure notes.
The root of everything is the problem. So what is the problem that you are solving?
Be as clear as possible. Show why this is so important. How did you meet him? How did you check and prove that this is already a problem for others? Mostly in terms of being something with commercial potential. An urgent problem that people will pay quickly to solve.
Now that you’ve established the problem, what’s your solution?
How do you solve it? Both the big idea and then any specific initial products or services that you plan to use to solve it.
What is the main advantage of your solution? What makes it so unique?
Much of your success in fundraising and marketing will depend on your success in this section.
So, in which market are you operating? What is the size of the total market? How much is he growing and should he be growing? What is it worth, and how much do you think you can acquire and control?
What are the specifics of the target market you will start to focus on? Be as detailed as possible, including customer avatars and ideal customer profiles.
Who are the competitors in this space? How many are there? How are they good and bad? More importantly, how do you stand out from them with your USP?
It is a great place for your SWOT analysis. Present your strengths, weaknesses, opportunities and threats in this environment.
Rather than avoiding acknowledging the competition and challenges, think about how you can use the competition to make your business case, stand out, and get more value involved.
Now is the time to explain how you are actually going to implement your business idea and this opportunity.
After all, it’s execution that really makes the difference between a great idea and a great opportunity, versus building a successful business.
Your marketing and sales plan
Marketing and sales are often 90% of your success. You can have the best technology in the world and never make progress without great marketing and sales. The opposite is also true.
Now is probably a good time to recruit a leading sales and marketing expert in your industry to help you with a brief plan and budget for earning early gains, then scale and build on them.
Operations & Organization
How are you going to organize this business?
Some companies are very straightforward. Others will have manufacturing, logistics and sales in different physical locations around the world.
Perhaps most important in this section, what is the business model? What’s the cycle and how are you actually going to make money here?
Milestones and metrics
What specific milestones and metrics has your business already achieved? Any proof points and validation will help. Show what worked, and even what didn’t work so well.
Lay out the next key milestones and data points you are targeting. It could be a number of customers, the finishing of a product or the tightening of the economy of the unit.
How did your business come about? What type of business entity have you chosen and where is it registered?
Who are the shareholders and owners of this company so far? It is also worth mentioning all the notable investors.
How is your organization structured and who is already part of the team, relative to the hiring needs you may have now and in the near future?
Start with your existing finances. If you’ve been in business before, include your historical financial data. Or at least show your current financial situation. For example, your balance sheet and your P&L since the start of the year.
Your financial forecasts
One of the most important parts is your forward financial forecast. Breakdown the first year by month. Then outline your expectations and goals for the next 3-5 years. Include your breakeven point.
What funding and financial levers have you obtained so far? What are the funding and funding needs to achieve your goals?
How do you plan to raise the money you need? Will it be through fundraising, bank loans or something else?
What is your philosophy on leverage? Are you going to start and make profitable to be self-sufficient as quickly as possible? Or are you going to amass all the money you can to grow at all costs and reduce profitability down the road?
You can use this section to support your predictions and assumptions with links to credible data sources.
You can also include key documents, such as your articles of incorporation. As well as financial documents, such as your cash flow statement.
Review and improve
Now take the time to review your work. Get as much feedback as possible. Then make adjustments and polish it.
Then jump straight into action.
Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a preface by “Shark Tank” star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide on how entrepreneurs are fundraising today.
Most recently, Alejandro started and left CoFoundersLab, one of the largest online founding communities.
Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in one of the largest investment arbitration cases in history ($ 113 billion at stake).
Alejandro is an active speaker and has lectured at the Wharton School of Business, Columbia Business School, and NYU Stern School of Business.