A Step By Step Technology Startups Business Plan Guide

A Step By Step Technology Startups Business Plan Guide

"This plan works every single time!"

Startup business is hard work, requires a lot of determination and only pays off in the long run. Customers may ‘like’ your product but they usually pay for their ‘needs’. Do your thorough research before divulging into starting a new business.

If you have landed on this blog post, either you have a startup or are planning to launch one. In any case, a business plan is crucial as this helps you and all stakeholders to be on the same page and align business goals.

A business plan is a blueprint or can say a roadmap which describes the purpose of the company, structure, product and services, financial plan and the market analysis with penetration rate.

Technology startups business plan is helpful in testing the viability of your new product, fundraising, business loan, and more. Whatever your objective is, we are detailing all the important details which you should not-miss in the business plan.

Table of Contents

A step-by-step guide

Step 1 Executive summary

An executive summary is a quick overview of what your company/product/service does and what’s unique selling proposition. It sums up all of the business plan and serves as an introduction part. A well-documented summary shows clearly what your startup is all about and how it will capitalize on its resources in years to come.

Executive summary is where you have to hook the reader either the investor, the partner or your employees because from there they will decide whether they will read the whole document or not.

Let’s list down all of the important parts of the executive summary so that you get to know ‘how to write an executive summary for a business plan?’

What not-to-miss in executive summary of a startup business plan Details Length
Business idea  An idea centered around your product/ service   and is considered a starting point for current and   future entrepreneurs. It should include details   about your product, the characteristics it has, and   how it’s solving the customer problem. Cost   calculation for product development and   monetization strategies are also part of this   section 2 paragraphs
Segmentation  Narrate a complete market overview and   showcase the type, age group and size of market   you are targeting. Not more than a paragraph. 1 paragraph
Market players  Every business has competitors and your startup   would also have some. Do list them down and   describe how your product stands out 1 paragraph
Finance milestones  For clear understanding, prepare financial   projections in the form of a chart for like 1 year,   2 years. At least add 3 years of projections. 1 paragraph
Returns and exit plans  Share exit plans so that investors could trust   more. 2-3 lines
Team  Do share details of your team members and the   experience they have. Investors like to see who   will be working on the idea. 3-4 lines / short paragraph
Stakeholders  Do mention if there are any partners involved in   your startup. This adds credibility. 2 lines

Do’s and don’ts of executive summary

-Sell your business in the opening paragraph

-Give synopsis of every part of the business plan

-Write executive summary at the end of the plan

-Keep the summary short and to-the-point, not more than 2 pages

-Don’t write for yourself instead for your readers

-Use an engaging tone

-Don’t use unrealistic information, investors are usually experienced and sense the hype

-Don’t forget to proof-read

Step 2 – Market size and opportunity

Market size is the total number of likely buyers of your product or service from a given market. Whenever you prepare a market analysis with size, you focus on your target customers.

This helps investors to think of the profit a product would make thus helping them make a decision on whether they should invest or not.

Let’s estimate market size by following these steps.

 Estimate market   size for your   business plan Details
 Set your target   audience  Determine who your target customers are. Prepare profiles of   your targeted customers with age group, gender, location,   occupation, income, problem etc.
 Determine the   number of target   customers  Use stats from industry databases like Statista etc. this helps   in quantifying your target market.
 Penetration rate  Penetration rate for products solving mission-critical general   problems have high penetration rates whereas products with   specialized purpose have low penetration rate
 Market volume and   value  Multiple your number of target customers with penetration   rate for market volume.
 For market value, multiple market volume with average   value.
 Apply market data  Calculate best-case and worst case possibilities. Monitor   accuracy of your initial assumptions here.
 Length / read  1-2 pages, 5 minutes read

Do’s and don’ts of market size estimation

-Defining target audience is crucial either use top-down or bottom down approach.

-Generalized sizing won’t reap much hopeful results.

-Don’t just evaluate best-case scenarios.

-Do monitor initial assumptions and keep on testing.

Step 3 – Company structure, goals, history, location

A business mission statement is part of your ‘company description’. Experts recommend updating company descriptions with time as the company grows. Primarily a company description in the business plan includes business name, goals, competitive edge, target market, location, mission statement, products, structure and team.

 Company   description in a   business plan

 What not-to-miss?
 Business name and   location  State registered business name, and all off-shore and on-   shore locations
 Legal structure  Company hierarchy, partners, management team, employees
 Mission statement  It should tell what company wants to achieve and values a   company hold.
 Unique selling point  Share your competitive advantage
 Objective and goals  What are your plans of growth in future
 History  When was your company established and what are the     milestones
 Length / read  1-2 pages, 7-8 minutes read

Do’s and don’ts of company description in a business plan

-To the point and brief

-Don’t lie, tell the exact hierarchy a company has.

-Your competitive edge or advantage should be convincing

-Do include achievements over the period of time in the company’s history.

Step 4 – Product / Service description

This part of the business plan shares your product details such as cost, features, distribution, target market, competition, production concerns and unique market gaps.

Product description isn’t just mentioning the product features but also to highlight compelling features not elsewhere in the market like high quality or economical price range etc. Even a simplest product has something unique to offer. Do you know mass popularity and exclusive distribution are also considered under strengths of the product?

 Product   description

 What not-to-miss
 Features  Do mention what problem your product is solving via   features, sizes, configurations, colors or any powerful   selling feature.
 Price  Position your product as value-for-money but not cheap or   low cost.
 Do offer more and more payment options, this helps   customers buy easily.
 Availability  Mention locations or if the product is available online too.
 Support  Sophisticated products like software/electronic devices   should mention the support team if any.
 Delivery  Do mention shipping/ on-site service information
 Endorsements  Add popular endorsements if you have any.
 Length / read  2 pages, 7 minutes read

Do’s and don’ts of product description

-Do miss out on your powerful features.

-Reviews and endorsements add credibility, do add if you have.

-Don’t use jargon or manipulate features. Avoid repetition.

-Do position your product differently. Use product pictures/videos.

Step 5 – Financial plan, revenue streams, projections

A business plan can never be devoid of financial plan. It tells your company budget (have or required), and sales goals (showcasing numbers).

Finances are the most challenging part for entrepreneurs. This is because they don’t have cash flow reports, balance sheets or stable income for making future projections

 Financial plan

 What not-to-miss?
 Business model/

 Revenue stream
 Business models tell the way a company will generate   revenue.

 There could be multiple revenue streams for a single product
 Sales forecast  A spreadsheet showing sales over the course of 3 years.
 Milestones  Product expansion plan, future store openings etc.
 Exit plans  A successful finances depiction always entails the exit plan   keeping future foresight.
 Employee salaries  Who will be spending on human resources? Your company,   or a partner.
 Length / read  1 page, 3 minutes read

Do’s and don’ts of financial plan

-We recommend using the bottom down approach for exact narration of profitable numbers.

-Don’t add unrealistic figures if you are not confident.

-Do mention revenue forecasting for at least 3 years.

-Make sure planned revenue exceeds company expenses.

Free business plan templates

Template 1 (Download in PDF)

Template 2 (Download in PDF)

Final verdict

An elaborative business plan highlights business opportunities and chances of covering the current market gaps and how soon the product will penetrate. The process of writing a business plan is long and sometimes tiring, however every startup should go through it.

Ideally, after completing a compact and detailed business plan, you should go for an MVP (minimum viable product). Are you already building your product’s MVP and looking for a development service? Tell us your requirements and we will share estimates with you.

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2 West Canal Bank Road, Lahore ,Pakistan
500 Grant Street, Downtown, Suite 2900, Pittsburgh, PA 15219, USA
3 Dalmeny Ave Huddersfield, Huddersfield, HD4 5NN, UK
DSO-IFZA , IFZA Properties, Dubai Silicon oasis, UAE