Seminar 6: Putting it All Together: Writing the Ideal Business Plan

Writing a Startup Business Plan

Ben Mumby-Croft

• Review the business planning process

• Understand why it matters for startups

• Introduce basic startup business plan format and structure

Today’s session

About me

• University lecturer

• Marketing & business practitioner

• 10+ years experience

• Primarily Small-to-Medium Enterprises (SMEs) and Startups

Experience

Light Blue Software

Working with startups

Q. Why plan?

Planning process…

Startup context…

Thinking Planning Doing

The purpose of your plan is to move you from

thinking to doing

AS QUICKLY AS POSSIBLE!!!

The challenge for startups…

“A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”Eric Ries, The Lean Startup

Do I REALLY need a business plan?

YES!You do!

Having a business

idea is easy

The Startup Fallacy

Turning it into a business, is VERY

difficult!

The Startup Chasm

It’s a long way from here to thereAnd lots can happen on the way

• Getting your good idea to bear fruit is hard

• Will probably require startup and growth funding

• You need a clear understanding of the journey

Taking the first steps…

You need to plan ahead…

To convince investors that you know what you’re

doing…

To avoid making obvious mistakes…

To reach your destination as quickly

as possible!

Two key roles of the business plan

Q. Why do startups fail?

They run out of CASH!

2 reasons…

Over planning…

Under-planning!

Under-planning!

The startup business plan…

There’s no shortage of advice!

BUT there’s also no magic formula…

Here goes anyway…

1. Executive summary

1. The Problem/Opportunity

2. The Solution

3. Business model

4. The Market

5. Competitors & USP

7. Marketing & Sales

8. Management Team

9. Finance

10. Current Status, Key Milestones, Next Steps

Appendices

The Startup Business Plan

• A short and concise summary of the customer need, your solution, your business model and what makes you unique

• This should also make a compelling statement to potential investors

• Write this page last!

1. Executive Summary

• What specific customer challenge or problem does your idea address?

• Try and quantify the scale of the problem from the point of view of the customer

• The bigger problem, the bigger the need, the more attractive your business is!

2. The Problem

• What is the proposed product or service that you have developed that will solve this problem?

• What key benefits does it provide; try and quantify these from the point of view of the customer e.g. reduces costs by £X, reduces emissions by Y% etc.

• Keep it simple and avoid jargon!

• A picture paints a thousand words!!

3. The Solution

• Describe in clear and simple language how your business is going to make money e.g. one-off transaction, subscription model, commission etc.

• If your business model is complex, or involves multiple channels of distribution consider using a simple diagram

• Show me the money!!!

4. The Business Model

• Describe your target market in terms of: size, structure, geographical spread, key customer types etc.

• Make sure you also demonstrate that you show good qualitative understanding of your target customers e.g. what they want, how to reach them etc.

• Identify the addressable market

5. The Market

• Who are your key competitors & on what basis do they compete e.g. quality, price etc?

• What makes your product/service compellingly different – what’s your USP?

• Why will people fall over themselves to buy you?

6. Competitors and USP

• What are your sales goals?

• What mix marketing channels are you going to use to communicate your USP to target customers?

• What specifically are you going to do and when?

• Don’t break the bank!

7. Marketing & Sales

What is a brand?

• What specifically makes you and your team qualified to get this business off the ground.

• Describe the key players of your management team, including age, experience, and skills and knowledge

• Make sure you identify any key gaps

8. The Team

• Provide a 3-year forecast containing projected cash flow, P&L etc.

• Provide additional metrics in terms of projected customer numbers, conversion rates etc.

• How much capital will you need to get off the ground?

• Make sure you outline all of the key assumptions behind your forecasts

9. Finances

• Explain the current status of your product or service and what the near future looks like if you are successful in winning.

• Make sure you list key milestones covering the the next 12-months e.g. product launch, first customer sales etc.

• Close with a bias towards action!

10. Current Status & Next Steps

…I lied about the £10,000 pounds

9.

30am – 10.30am: Leadership refresher

10.30am – 11.00am: Coffee break

11.00am – 12.30pm: Interactive exercises

12.30pm – 1.30pm: Lunch

1.30pm – 3.00pm: Interactive exercises

3.00pm – 3.30pm: Coffee break

3.30pm – 4.30pm: Partner presentations

10. CURRENT STATUS, NEXT STEPS…• Explain the current status of your

product or service and what the near future looks like if you are successful in winning.

• Make sure you list key milestones covering the the next 12-months e.g. product launch, first customer sales etc.,

• CLOSE WITH A BIAS TOWARDS ACTION!

1. Executive summary

1. The Problem/Opportunity

2. The Solution

3. Business model

4. The Market

5. Competitors & USP

7. Marketing & Sales

8. Management Team

9. Finance

10. Current Status, Key Milestones, Next Steps

Appendices

The Startup Business Plan

Top tips

• Avoid acronyms NMR, CDMA, ASCII, WDTM

• Functionality – what does this product/service do NOT how does it work

• Use customer scenarios

• Your job is to explain your idea to investors and make it easy for them, whilst balancing with enough detail

Tip 1 – Minimise Complexity

• Make sure it’s easy to read

• Vary sentence length

• Repeat key messages

• Short paragraphs, wide margins, 11+ font

Tip 2 – Make it easy to read

Write as you would speak NOT as in a

textbook

Do a word cull after the first draft CUT

unnecessary words

Give it to your partner to

read…

Does it make sense?

REMEMBER!

A good business plan…Sets out a compelling vision of the

futureAnd shows how this will be made

real

+

A good startup business plan should get you to

first base…But you’ve got to make the

running from there!

No business plans are

ever right!

Reading List

Start here