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| Writing A Business Plan For A Startup. |
What Should A Business Plan Contain?
In recent years, the startup market has been undergoing a siege. The vision of success warms the hearts and minds of young people dreaming of careers like the creators of Facebook or YouTube. However, the market for new technologies is very often unfriendly for young companies.
Valuation industry experts report that real revenues in the first years of operation account for no more than 50 percent. amounts assumed in pessimistic scenarios, while costs are usually more than anticipated. That is why, apart from the optimism of entrepreneurs, it is also necessary to have the realism of an accountant.
Unpredictable as a startup
The technology industry is governed by its laws, which makes it difficult to predict which of the ideas of young businessmen will end in-market success. 3D TV technology, which in theory was a great idea, suffered a spectacular defeat.
IoT (Internet of Things) was also to be the future of technology companies - among the hits from the Internet of Things label, among others, a recipe, a band measuring the pulse, a camera on the helmet throwing our video on YouTube in the formula of online streaming, or the famous glasses for augmented reality.
Meanwhile, after noisy announcements and considerable expectations, there are, for now, low-selling smartwatches and still unfulfilled hopes for improving the quality of medical examinations and prophylaxis thanks to the use of IoT.
In addition to projects that have failed, in recent years we have also seen ideas transformed into unexpected success. The crowning example here is Twitter - many years ago, nobody predicted that a simple portal for publishing short text messages would have over 100 million users.
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| Write a successful business plan |
Business plan - Where to start?
Because the future of a given startup is very difficult to predict, both the creators of startups and potential investors face a dilemma of estimating the market potential of the selected project. A business plan illustrating the scenario for the development of an idea should help in this.
A startup should have a business plan when starting a women's clothing boutique, a technology company, a web design company, or any other type of business that you can think of from electronics, services, and much more.
And it is the development of a good business plan that is often, from the perspective of a startup creator, the most difficult challenge. All because the people building a young company usually know more or less what they want to achieve, without having a clue how much it will cost. Also, instead of knowing how much they can earn, startup creators rely on how much they would like to earn.
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| Best writing time to develop a business plan |
First of all: Costs
Creating a business plan is worth starting with the costs. Expenses that are easy to predict and calculate are for sure: renting and maintaining an office, telephones, hosting costs, etc. We can also easily determine the amount of remuneration, but it is much more difficult to assess how long and to whom it will be necessary to pay - it all depends on how long will the development of our platform/portal/service takes.
It is worth noting that the projects completed on time and within budget are rare. Especially in the case of a startup we are talking about an innovative project, i.e. one that nobody has implemented before us - so we cannot know if it will encounter unexpected obstacles. Any deviation in this respect is a factor generating additional costs in a business.
Secondly: Revenues
The second category necessary to include in the business plan is assumed revenues. It is known that people who decide on a career as a startup creator are people with an above-average level of optimism. Even in the face of statistics, according to which the vast majority of young businesses fail - on the other hand, it is optimism and enthusiasm that creates innovation.
In the category of assumed revenues, startups should follow two basic recommendations, i.e. less and later. Due to the low knowledge of the above topics, in practice, the business plans of startups assume that after launching the service in the first month, 1 thousand will use it. people, in the second two thousand, and after a year - already 50,000 people per month.
These numbers usually do not result from any assumed effectiveness of sales efforts, and even if they result, this effectiveness is assumed at an unrealistic level. To give the right perspective - let's imagine an unknown new rock band that comes to Poland.
He plays great music, but it appeared on the network only a week before the concert.
What is the chance that they will gather a publication of 1,000 people?
None. The group of thousands of recipients does not seem large, but in practice, it is difficult to achieve for each new project or service.
Third: Marketing
Marketing issues are ignored in startup business plans. Just publishing the page on the Internet will not cause everyone to be interested in the service we offer - that requires time and marketing effort.
According to the statistics available at internetlivestats.com, there are currently about 275 million active websites on the web. Such a multitude shows the chance of being interested in a new website for anyone unknown startup who is not supported by additional promotional activities.
Fourth: Market analysis
The saturation of the market with competing services and products is also an important issue. The fact that something is new and maybe even better will not cause people to buy it right away.
Perhaps it would be extremely good for the market to introduce a new, much better type of credit card, except for two leading systems, but the reality of such an idea due to the incredibly strong position and brand of these entities is small.
The aspect of the indirect competition is often overlooked.
3 Tips For Young Entrepreneurs
When writing a business plan for a new technology venture, stick to some golden rules:
•Expenses: For sure, we will have more expenses than we expect - therefore it is worth extending the product creation process and adding a reserve for unforeseen costs.
•Market Research: In turn, there will be fewer revenues and they will appear later than we expect. The number of customers must result from a rational analysis of the relationship between marketing and sales effort and the percentage of its effectiveness with constant recognition of two facts:
- The market is saturated;
- Competition has a strong market position;
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| Do your market research and projections |
•Projections of profit and loss: The undertaking will not start generating large profits within one year. Even after two years, and very likely not even after three.
Under these assumptions, the business plan will become much more real, which will allow entrepreneurs to prepare for the proper conduct of business and tedious gaining market position. It will also save you disappointment and discouragement if your actual results are not in line with your optimistic expectations.
Of course, when it comes to predicting results, there is always a risk of error and overturning the other way. It is possible that entrepreneurs will make a too cautious business plan and the results of their startup will exceed their wildest expectations. However, in this case - well, they'll be billionaires faster than expected.
Author: I am Angel from Cheetah Papers and I am working under the team content writer. Our goal is to hire an expert who has a good command of English and will be able to meet the expectations of our clients. We evaluate every single point of the writers' abilities to choose only talented and reliable candidates.
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