Every startup needs a business plan before it starts to operate. It’s what you use to show investors your business (and for yourself), because it has your marketing, financial and operational strategy. Get it wrong and you are screwed.
Here is what to include in your business plan
To understand what needs to be in your business plan, you need to know what it is and why startup gurus place great emphasis on it.
So, what is a business plan? This is a detailed document which describes how a business is going to achieve its goals. In it, you have a clear understanding of what your marketing, financial and operational strategy will be. Simply put, it’s a map which will help steer through your business.
It’s probably worth adding that business plans usually cover 3 years.
Although it sounds like it belongs at the end of the business plan, your executive summary should appear right at the top.
The executive summary is your first, most important opportunity to interest potential investors. It is a precise, attention-grabbing introduction which tells your readers where your company is, where you want to take it, and why they should take interest in it.
As a startup with no history, focus on your experience and background, and try to explain the steps that led to your decision to start your business.
Show that you have conducted thorough market analysis and research. What need or gap will your products or services fill? Investors want to know what you can bring to the table and the impact it will have on your clients’ lives.
Remember; grab their attention early on in the game. Bore them now and you’ll lose them before you’ve even started!
The business description tells your brand story, explains your value proposition and encourages your prospects to see you as a reachable hero. This is the long version of your elevator pitch: make every word of it count!
Make sure to include the following critical elements in your company description:
- State the nature of your business and the marketplace needs you hope to satisfy
- Describe how your product or service will meet those needs
- State your target audience
- Explain how your company will be unique and how you plan to meet your investors’ needs
Your Product or Service
You must show detailed knowledge of the products and services you intend to provide. No one will invest in your business if you don’t know your own offering!
Make sure you include the following:
Your products or services’ life cycle – do you offer a lifetime guarantee? How long do you expect your product to last before it needs replacing? Do you offer periodic access to your services? Be very clear on timelines, so your prospects know what to expect.
Intellectual property – confidentiality is vital to the security of your ideas. Explain your existing legal procedures, such as non-disclosure agreements, and outline who owns any patents and IP rights.
No SWOT analysis or competitor analysis?
Marketing is essential for modern startups, especially if you’re planning to run your gaming and hobby business online. Investors want to see a robust marketing strategy built on solid research and should include the following:
An outreach strategy – market penetration is vital for startups. Show how you intend to reach and engage your target audience.
A growth strategy – you may need both a vertical and horizontal strategy to help you determine the correct distribution chain. You may need talent acquisition: scouting for a team to help you reach your stretch goals. You may want to branch out to multiple locations. However you build your growth strategy, it should yield maximum returns on investment.
Communication strategy – detail the channels and networks you will use to reach your audience. Online options include the various social media platforms, website ads, and a company blog; offline methods include magazines, newspapers, flyers, and billboards.
Distribution channels – how will your brand reach your potential customers? For example, you can use retailers, distributors, merchandisers, and promoters for products; services may find their audience through referral programs, third-party promotions, and landing page traffic.
Your sales strategy is complementary to marketing. These two departments should endeavor to work together for business success. Your sales section should include:
Sales force strategy – how will you sell to potential customers? You can use internal or contracted sales personnel but, whichever you choose, be sure include training on your offering. Detail a clear remuneration process for your sales force.
Sales funnels – explain the activities you’ll undertake to ensure that you meet your prospects where they are. Will you use a mailing list to capture leads and analyse who is likely to buy first? Will you use online ads to push potential clients through your sales process from a landing page? Will you cold-call warm leads acquired from your various marketing tactics? Perform detailed research to determine your likely conversion rates and the related investment per new or repeat customer.
How do you plan to operate your business? Company administration is a fundamental question you must answer for prospective investors – and for yourself!
You may decide to use business management tools, such as software or services that handle the administrative side of your business. Determine cost-effective ways to streamline your business, increase automation, and reduce redundancies. Finding the right tools to use and the right people to work with can help you save time and money, improving ROI.
Don’t forget to plan for future expansion: choosing more expensive tools now may provide scalable efficiencies in staffing, planning, budget, and information management that make your startup a far more attractive investment.
In a gaming and hobby business, you can be a solopreneur or you can have a team working behind the scenes to create success. Make sure that you list everyone working in your business, with their roles and qualifications.
Even if it’s just you and your dog Sam, your plan should include every detail, including job functions and the departments each individual oversees.
When you look to the future, what do you see? Do you see your business growing? Or do you see your company much the same size in three to five years? Do you want to scale up or do you prefer to stay small and specialized?
Your short- and long-term goals are absolutely fundamental to your business, so give a full description of both. Remember to be realistic, but optimistic. Remember also that your goals will help you forecast the health of your business, and provide future reference for where you wanted to be at any given time.
All goals should be SMART – specific, measurable, assignable, realistic, and time-based. For example, a short-term goal could be obtaining at least five customers per day from your marketing channels; a long-term goal could be to double your customer base every year.
Investors and followers need to see that you’re planning at least three years ahead.
The financial summary details your financial projections, your funding request for the business, or both.
This section is a difficult mix of financial analysis and sales pitch: your want funding to kick off your business, but you can’t hold out your hand without offering attractive future returns.
Explain how you will use investment money, how you will execute your plans, how much investment you need, and the return for your investors, based on detailed market analysis and projected sales.
Ensure you forecast for at least three years, and ideally five years.
Be careful to walk the line between optimism for your business success and realism to avoid overstating possible returns. You don’t want investors getting disillusioned early on because you promised them the earth and delivered dirt. You want their trust and their loyalty, which you will gain through being confident, honest and clear – and by delivering the results you forecast.
A good business plan, in general, has a start date. If you’re vague about launching your business, your target audience will doubt your dedication and your ability to operate your business. Commit to a date.
With a set launch date, an executive summary, a description of your company, details of your offering, a marketing and sales strategy, an operations outline, your team list, your goals and a financial summary officially published, you’re ready to make your game and hobby business dream a reality.