Create The Perfect Business Plan For Your Tech Startup With This Guide
Written in partnership with Eshan Pancholi of Radix
When starting a new tech business it's imperative to have a clear understanding of how to bring your idea to life. Which is why you need a business plan that defines what you're going to do and how you're going to do it.
The rapid growth of cutting-edge tech businesses has led to the abundant availability of ready-made business plans. A simple Google search on 'how to create a business plan' will give you promising templates. However, these may not be the right fit for your tech business.
Business Tip: Before you begin crafting a business plan for your tech startup, you should secure a domain name for your business website. While this may seem like a task that can be done later, it's important to do it at the beginning to ensure you capture the domain you want. Having said that, you can find some great options with relevant new domain extensions such as .TECH. Several mega brands including Viacom (viacom.tech) and startups like Shadow (shadow.tech) have acquired definitive and smart domain names on .TECH.
To help you craft the perfect business plan for your tech startup, we've put together a simple 8-step guide.
What is a Business Plan?
A business plan is a roadmap or blueprint that highlights in-depth what your business goals are and how you will achieve them.
1. Executive Summary
The executive summary makes for an important segment of your business plan. Some experts even suggest creating an executive summary as a substitute for the entire business plan.
As a rule of thumb, your executive summary should be limited to two to three pages. Refrain from making it too lengthy and descriptive. Your short summary should be peppered with all the right bits of information and key elements of your plan.
Since most banks, money lenders, and investors usually turn to this document from your business plan while deciding whether to invest in your business, it’s safe to say that your executive summary has the power of making or breaking your business.
Ideally, your executive summary should include the following:
- Mission statement
- General company information
- Graphs and charts that depict key milestones
- Brief information on your core competency
- An overview of your finances
- All future plans
Pro Tip: It's best to create your executive summary after completing your business plan. This way, you'll have a detailed business plan in place which will make it easier to summarize.
2. Company Overview
The company overview or company description is often confused with an executive summary. However, they are not the same. As the name suggests, your company overview is essentially a detailed overview of your company.
Here’s what you should include as part of your company overview:
- The mission, vision, and purpose of the company
- How the company was formed
- Explain the nature of the industry and the marketplace
- Details about the founders
- The number of employees in your team
- Locations of the business and geographical markets where you serve
- Mention all legal aspects such as patents owned
- Any future products or services you wish to launch
3. Market Analysis
As part of your business plan, you should include a report that covers an in-depth analysis of your market. This report should include details on your primary competitors and your target adopters.
Your market analysis should include the following:
- An industry description that gives details of the current market size, year on year growth statistics, and the market share held by competitors
- Include all the vital information on your target market
- Chart out calculated predictions and details about your makret share potential
- Mention the estimated cost of your products versus overall market prices
- Make note of all existing or potential challenges that the market produces and how you plan to overcome them
- Conduct a SWOT analysis of your business as well as your competitors and include this information as part of your market analysis
4. Operational Plan
This part of your business plan covers all the details pertaining to the organizational and operational plan.
Here’s what you should include:
- Infrastructure facilities required including office space
- Background of owners including ownership structure
- Hiring requirements
- Technology and equipment needed such as computers, servers, printers, etc.
- Logistics and distribution plans
- Customer service and fulfillment processes
- Quality control checks
- Legal and accounting needs
5. Products and Services
This section of your business plan should include all the details of the products and services you offer. Mention how your product is solving a problem and what it’s providing to your target audience.
Here’s what this section should include:
- A general description that defines the nature of your core product, it's USP, and the value it offers
- An honest picture of what stage your product is currently at
- Include visual representations in terms of diagrams, charts, images, and concept videos of any new feautres you intent to introduce
- Mention all intellectual property owned by your company that is part of your product's proprietary technology
- Current pricing of products
- If you are outsourcing your hardware, software or customer support services to third-party vendors, then mention all details about it here
6. Marketing and Sales Plan
The next step of your business plan should be to outline your marketing efforts and sales avenues.
When it comes to marketing, this is what you should include:
- Positioning details: All details related to your products' positioning such as price position, guarantees and warranties, features, and so on
- Promotion details: All plans and details for promoting and advertising your product which include social media marketing, PR strategies, organic marketing tactics, etc.
Your sales plan should include:
- Details on the strategies and channels you are going to adopt to sell your product
- Details on how big your sales team needs to be and who will train the team to achieve the set targets
- Details on the selling strategy with a clearly defined process
- Mention all details of channel partners or strategic partners you wish to appoint for an added boost
7. Financial Plan
This section of your business plan is important from a fundraising and daily management point of view. To perfect your financial plan, you should refer to any historical data from previous financial performances or rely on calculated forecasts.
Include the following as part of your financial plan:
- Income projections/statements (from previous two years at least, if applicable)
- Cash flow projections/statements
- Break-even analysis
- Current balance sheet
- Income and expenses
- Financial projections for the coming year
You can also include the overall cost to start up, fundraising requests, and other capital requirements.
Projections and costs should be thorough, but you should include a cushion or buffer amount. The primary focus must be towards fulfilling the developmental cost of building the product and on acquiring the latest technology.
Acquiring intellectual property, patents, and working prototypes should also be given significant importance. Include a repayment schedule or a repayment model if you plan to raise funds from investors or borrow money from a bank.
The appendix should be included towards the end of your business plan. This section should include other vital information that wasn’t covered in the other parts of your business plan.
- All supporting data, charts, and statistics
- Strategic points and footnotes
- Copies of insurances
- Contracts and appraisals
- Articles of incorporation and status
- Resumes of founders and key team members
Although many consider creating a business plan as a waste of time and deem it as an unnecessary requirement in today’s business paradigm, having a business plan in place is essential to your tech business’s sustenance and survival.
With the eight steps mentioned here, you can surely create the perfect business plan for your tech business that will help you kickstart your business on the right note and catapult it to success in the long run.