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