3 Simple Reasons Your Startup Needs a Business Plan
The oft-used phrase ‘nature of a startup’ is a simple one, with a far more complex interior. As the modern workplace moves further and further from the traditional, in terms of hours, office space, business plans and benefits, in recent years it has seemed as though the start-up ‘dream’ is an achievable one for us all. In the 2018/19 tax year, more than 600,000 startups hit the streets in the UK, across areas including tech, retail, leisure, and hospitality, amongst others. But with only 33% of new ventures making it to their 10 year anniversary, it seems that walking into your own startup venture with your eyes fully open may be the only way to ensure success.
Though new, or start-up, ventures by their very nature defy the trappings and traditions of ‘old school’ corporate businesses, what are some of the things new entrepreneurs can be doing to ensure ‘tradition’, when it comes to workplace management, future-proofs a startup, as opposed to holding it back? One way, we argue, is through the curation of a watertight business plan for your startup, as a blueprint for investors.
What Is A Startup Business Plan?
A business plan is a modelling tool, designed to communicate the vision for a company, without the overuse of statistics, numbers and spreadsheets. A well-written company outline is a ‘must’ for anyone looking to bring a company, start-up or otherwise, into the common market, and register officially. Typically, this is done for three main reasons:
To lay out and articulate a clear vision for the venture — this can be as beneficial for startup founders as anyone else, as this can serve as [your] chance to put down on paper what you hope to achieve, and how.
To make a plan for the future of a venture — this could include predicting and seeking to overcome potential challenges, and modelling data for the growth of [your] startup, in years to come.
To present a clear vision for the start-up to others, primarily potential investors.
Who Do I Need A Business Plan?
A good initial outline for your company or venture is a key to success — plain and simply put, it is one of many factors overlooked by businesses, particularly start-ups, which eventually end up failing, due to a lack of vision, profitability, or investment. Creating and articulating a successful business plan can achieve the following benchmarks of success for your start-up, and in many cases, can be the difference between getting a young company off the ground, or having it fail before the dream can become a reality.
Securing Investment
Start-up funding is typically carried out in stages, rounds, or ‘series’; though there is no ‘standard’ for the number of funding rounds required before a startup grows legs of its own, it is within the interests of startup founders to ensure [their] company achieves success as quickly as possible. A well-written, well-communicated business proposal will act as a pitch to any and all potential investors, from ‘seed’ funding stage, to later funding drives with a focus on business growth. Think of your business proposal as a pitch — a way in which to communicate the passion you have for your vision to others who may not be as initially invested. It is worth not only curating your business plan from the early stages of your start-up journey, but accepting and actioning change to this outline as your venture grows. Delivering an accurate and articulate proposal is extremely important when it comes to planting and growing a startup seed; investors will want to know where their money is going, and how it will be used to ensure mutual success for all invested parties.
Ensuring ‘Profitability’
Startups can be based on both for-profit and not-for-profit models. Regardless of your aim for your start-up, however, you will be expected to explain from the initial pitch, how and why your startup will be a success. Though 90% of new companies failing in the first year of operation, this is seldom due to a lack of passion or hard work, and more often down to a lack of due diligence when it comes to planning elements the of company that are not as ‘fun’ as others. This can include running numbers, modelling data, and of course, ensuring you have a watertight business proposal that remains relevant to every stage of your company’s growth. Make sure you know, first of all, what will make your new venture a lasting success, and communicate this, via a business plan.
Future-Proofing Your Startup
Thanks to the incredible increase in start-up prospects over the last five years, walking into the startup space as a founder is becoming more and more accessible as an option to entrepreneurs, regardless of background and experience. What will truly set a young company apart from the crowd, in terms of long-lasting success, is ensuring exactly that: success that goes beyond a flash in the pan of early profitability, and ensures a long-tern growth plan for your company, beyond ‘the startup years’. Often referred to as ‘future-proofing’ in startup circles, communicating a means of sustaining the success of your venture will be of the utmost importance to investors, and indeed anyone who wishes to come onboard your company in the capacity of staff or support. Even from the earliest stages, via a business proposal, it is never too soon to begin thinking about the future of your startup, and communicating this vision successfully to others.
How Do I Present My Business Plan?
A business plan, in the early stages, can be as simple and informal as a Word document, a whiteboard, or a list of bullet points on the back of an envelope. When it comes to actually presenting one, however, it is worth considering what you value more: style, or substance. Modern, popular techniques when it comes to presentations typically involve Powerpoint slides, flashy animation, a touch of humour, and a seemingly endless barrage of infographics. Valid methods all, you will nonetheless need to carefully consider your audience, and ensure that regardless of the format of your presentation, all of the relevant information is both present, and articulated clearly to the audience.
Be passionate, but be professional. Whilst not relying too heavily on numbers, make sure you include relevant facts and figures, particularly when it comes to the profitability and future growth of your company, in terms of staff, profits, and investment. When presenting to potential investors, make sure you leave enough time at the end of your presentation to take questions — and make sure you are prepared for them, no matter the direction or topic.