Upon gaining an understanding of the importance of a business plan, the main question that remains is, how does one build one correctly? In this article, we will describe the steps of writing a business plan when adjustments are required according to the field in which your venture will operate.
Research
Market research will help us obtain an understanding of the market in which the product operates, its market size and its growth rate. In the market research process, we will look for trends that help us understand the potential of our product in the appropriate market. For example, if you have an idea for a navigation app, we want to explore which solutions people are currently using to navigate from place to place, how much money is the market generating and more. The second phase of the research process is composed of Competition Research that involves finding competitors who meet a similar need as our product. This is stage is comprised of benchmarking, in which we make a comparison of what is available on the market, which streams of profit are being generated and what the current size their user base is. Once we have compiled the market research & competitor analysis we can proceed to build the SWOT that describes your strengths, weaknesses, opportunities and threats.
The Product
In this section, we will describe the problem that your product solves and how current solutions are attempting to tackle the problem. Upon establishing the problem that exists in the market, we will proceed to the product description. In the product description, we define the service you are offering, how your solution solves the problem at hand, and outline the specifics on how the product actually works. In the next section, the product’s value proposition is outlined, this helps potential readers understand how your product is different than solutions on the market and how it solves the problem established in your research more effectively. Additionally, the value proposition looks to help you define what makes your product stand out in both the customer’s and investor’s eyes. We conclude this section by presenting a timeline of the upcoming year by quarter. This quarterly timeline includes milestones such as the time needed for development, marketing, and any other activities required.
Business Model
Due to your limited resources, you need to focus your initial efforts. After researching the market, understanding who the top players in the market are and how you differentiate yourself from them (the value proposition). We will consider who the product’s target market is, which countries we will start marketing in and establish the reason you chose this market in the first place. It is important to show evidence of your choices. Let’s look at who our target audience is – what segment of the target market you are targeting (mothers, adults, children and more) specifically. It is important to remember that venture efforts at the outset need to be very focused on preventing wasted resources. At the end of the model, we will look at what our revenue model will be, which channels will make money (commission from sales, sales, freemium and more) based on the product and its character.
GO-TO-MARKET
This is the market penetration program, answering the questions pertaining to what actions we will take to reach customers in the market we have chosen. Let’s start with the strategy; this is a “look at” the process of dividing the product launch into large stages. We will continue writing tactics; detailed steps for implementing each part of the strategy we have written. For example, if in the strategy we wrote in the first part is that we will gain users for the app, we will tactically explain how we will go about doing it (for example by marketing). The last part is building a marketing & sales plan, detailing which marketing & sales channels we will use to put the tactics into practice.
Financial Plan
The plan includes two parts that talk about the money required for the venture. The first part is the financial model made in a separate excel. The sections of the financial model are pinned to the overall business plan. The model will highlight the revenues, expenses and profits in accordance with forecasts and existing market costs. From the financial model, we can understand how much investment is needed and what year we will start earning. If an external investment is required, we will move to the second part, showing the required investment, the size of the investment required and what milestones are needed.
In the following link, you can find more information about a business plan and other fundraising materials.
https://www.targo-consulting.co.il/business-plan/?lang=en