We Rainbow Grass explain some keys to the development of an effective strategic plan for the implementation of a startup.
Every business idea requires the elaboration of a strategic plan where the basis for the project, the objectives to be met and the means to be used to achieve them are described in a realistic and objective manner.
This document is fundamental to evaluate the possibilities of success of a business project and contrary to what many entrepreneurs think, it is less complicated than it seems. But let’s see how a business plan of a startup is elaborated step by step.
What is a business plan?
Basically, it is a document that describes the objectives of the company, the strategies needed to achieve them and the organizational structure, as well as a detailed study of the investment needed to finance the project and the solutions required to deal with future problems.
It also includes key aspects of the business such as WHAT products or services they offer, WHO the offer is aimed at or HOW the product or service is going to be marketed, among others. Obviously, each project requires a specific business plan, but it is basically structured in five basic points.
This section is considered as the business card of the startup in front of possible collaborators and potential investors, since it is where the business idea and the objectives to be achieved are described. Therefore, it is important to explain what the purpose of the company is, who the product and/or service is aimed at and what differentiates it from the competition.
The company’s values and degree of commitment must also be stated, as well as the competitive advantages of the product and/or service in the market.
From the point of view of supply, it is necessary to answer a series of basic questions such as: what needs does my product and/or service cover, who is it aimed at, why will it be purchased, where will it be available, or why is my offer better than that of my direct competitors?
Structure of the environment
As its name indicates, at this point a diagnosis of the market must be made to know the behavior of the sector where the startup will be developed. This information is obtained from the study of “strengths, opportunities, weaknesses and threats”, which establishes the SWOT analysis method.
This data will be complemented with the study of the market’s demographics, an exhaustive analysis of the competition, the definition of the company’s commercial target and the frequency of acquisition of the product and/or service.
It basically develops the company’s objectives and the strategic plan planned to achieve them. Based on the structure of the environment, the necessary strategies will be determined to define a sales and marketing plan for our business.
Therefore, it will be necessary to define fundamental issues such as the price of the product and/or service, distribution channels, communication channels, payment plans and the sales plan.
It is perhaps one of the most delicate to develop, but it provides substantial information about the viability of the business model for a successful company to prosper. The financial structure of a business plan consists of the income statement, cash flow and balance sheet, on a pro-forma basis over three years.
It must also include a break-even analysis, a scenario analysis and final conclusions with all those financial indicators of interest to future investors.
Although at the beginning the entrepreneur is the one who assumes a large part of the company’s positions, over time he or she will need to have founding partners and a team. Therefore, it is essential to delimit the functions, responsibilities, salaries and benefits based on the position being held.
Once the startup is consolidated, a Human Resources department can be created to carry out both the recruitment and the work development of each employee.
And finally, it is necessary to develop what is known as the Executive Summary. A summary document of only two pages that is developed after the implementation of the business plan and that summarizes all the activity of the company, based on the business concept, financial factors, financial needs and the current position of the business.