Business Plan Post

u/startiup // Reddit

How to Write a Business Plan for Early Stage Entrepreneurs?

Writing a business plan is one of the main pain points for many startup founders, especially at the early stage. And it’s not surprising: it is quite a challenge to establish a solid business plan, when there is very approximate understanding of marketing strategy, no real proof of the business model and no numbers or statistics to make financial forecasts (as it is usually demanded for 3-5 years). That’s a headache, no one will doubt!

 

Very often I meet business founders who don’t know how to write a business plan. They are concerned on what template it is better to use, what items should be underlined as priority, which chapters must be included and so on. For those who still fight with these unknowns I wrote a simple guide on how to write a business plan for a startup. Here are the shortcomings (UPD: the whole text you can find here):

Business plan for a startup doesn’t have to be ideal, solid and comprehensive document.

It has to explain clearly your idea, value proposition and business model – that’s it. In other words, business plan for startup includes your vision of your business goals and opportunities, combining risks & challenges, and the ways how to achieve the former and overcome the later.

Here is a great insight from serial entrepreneur and investor Patrick Hull, who answered this question in his post “5 Tips for a Great Business Plan” in Forbes:

I once wrote an entire business plan with a business partner on paper towels. We recognized an opportunity, but had to write it down and test the idea to make sure it would work (we didn’t have any paper handy, although that didn’t stop us). The plan was just for us, but we still had to see if the vision, the financials, and the strategy were sound. We created that company and it went on to gross millions of dollars a month. In other words, your business plan doesn’t have to be some manicured document in order to make it successful.

What to start my business plan with?

Sit down with your partners and team, have a drink, hold a brainstorming session and answer the following questions:

  • What is my business about?

  • What value does it bring to the customers? Why would customers buy my product or service?

  • Are there competitors in my niche? What are their strong and weak points? Why would I be better?

  • What is my potential market size?

  • What goals do I want to reach and how?

  • What do I need to execute your plan?

After answering these questions to yourself, start simply putting them on paper.

Business plan templates & useful software

Let me just mention some of the most interesting (from my point of view)

Free business plan templates from Entrepreneur

SCORE Business Plan Template for a Startup Business

Samples of business plan executive summaries on businessplans.org

Mint.com: business plan in elevator pitch

Business plans samples from bplans.com

Most of advisors will tell you that before answering the questions of your business plan you need to make investigations, study precisely your market, customers, competitors, etc. I would say the following: it’s obvious that before even thinking about writing business plan while developing your startup idea you should already think about value, customers, market and opportunities, so I presume that you already have some understanding of the answers on all these questions. And I advise you to note down answers to these questions before the detailed analysis.

And after having the first draft on paper, start the real detailed investigations. Surf the Internet to learn more about your market, speak directly with potential customers to understand their needs better, learn your competitors and their weaknesses, calculate precisely your expenses for execution and potential incomes for the first year.

And then, after doing all this homework, compare your first (partly intuitive) answers with the results of your investigations. Do you have an impressive difference between the first and the second time answers? That’s normal, believe me 😉

For many newbies-entrepreneurs this is a rubicon where they give up and start seeking for a job (or a new business idea).

But if you are not one of them, if you are not scared of the revenues decrease (they were definitely overestimated in the first version), by competition (oh, you didn’t realise how tight it may be), by the volume of work to be done (yeah, billions will not appear in few months of work 8 hours per day), if you still see the great opportunities behind the details and numbers and want to reach them whatever it takes – congrats, you are probably one of those lucky entrepreneurial spirits who can handle the founder’s challenges.

Then you should update your business plan with new details after research, determine the first steps to be done for execution and come on – just do it! And I’ll cross all my fingers for your success!