For founders writing their very first business plan, what’s one element they should be sure to include? How will this help them start off on the right note?
These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year, and have created tens of thousands of jobs. Learn more at yec.co.
1. An Exit Strategy
An exit strategy is an often overlooked element of many startup business plans. Many small business owners only think through to the point of making the business successful. But what happens when they get there? Will they continue to work in the business forever? Will they start ancillary businesses? Sell to a private equity firm? How the business will end should determine the way that it starts.
2. Market Opportunity
When in doubt, start with the market opportunity. Most investors know specific industries and markets. They get so many pitches that you have to fit into how they view the world or they will just move on from your idea, plan and business. Market opportunity shows investors that you know your industry and focus. Then you can get to how you win with more credibility.
3. Your Long-Term Vision
The most important thing in your first business plan is a long-term vision. Usually, business plans are presented to key stakeholders, including a co-founder, investors and any initial employees. It’s critical that you show the size of the problem that you are addressing and that you have a big picture vision to solve it. Don’t just say how you’ll build the rocket ship; point the team to Mars!
4. A Cash Flow Analysis
Big ideas are great, but can be unsustainable to finance long term. So, it’s extremely useful to see founders putting time and energy into thinking about what their costs will be like, how much revenue they’ll need to keep the lights on and what their timeline is to reaching that stage.
5. Your Hiring Goals
I suggest including your hiring goals as part of your business plan. If you want to grow your brand, hiring new team members is an integral part of the process. Think about what you hope to accomplish and how hiring new team members can speed up other parts of your plan.
6. A Request for Funding
This part is often overlooked, but highly necessary, unless you’re taking the shoestring approach. The request for funding should include how much you’ll need initially, what it will be used for and how it will be paid back. This will start you off on the right note because your potential investors will clearly understand what you’re looking for.
7. Your Marketing and Sales Approach
A business plan should always include its marketing and sales approach. Without marketing, you can’t get your business off the ground and promote your products and content. It’s important to describe how you’ll attract customers, what kind of campaigns you’ll create, etc. so you have a plan for taking your business to the next level and promoting its growth.
8. Your Customer Profile
It’s very important to include your customer profile in your business plan. Knowing the details of who your customer is, where they are from, what they do and why they’d buy from you will help you shape the rest of your business plan. Knowing your customer will play a special role in influencing your marketing and will help your plan make sense.
9. Your ‘Why’
How can investors connect or relate to you if they don’t know who you really are? Backers want to support passionate people, so tell them why you care and why they should get behind your cause and your mission. Your business plan is an opportunity to tell your unique story and background. Use this time to celebrate your drive and dedication.