The recent turmoil in the market lead to a change in the way business was done and many technology companies sprung to life. Low start up costs of these fast-growing tech companies and the heighted media coverage has created more entrepreneurs than ever. However, many fail to receive Series A and B funding, which is crucial for the growth of the company. Why?
The first step of starting your own company is to formulate a business plan. Here are few tips on how entrepreneurs should approach a business plan.
Product / Service
Make sure your business plan clearly outlines what your business will be in the most simplistic form possible. E.g. What is Google? Google is a search engine. Whether it is a product or service, the investor also needs to know what are you trying to achieve, E.g. Uber is a better alternative to cabs, and why your business will succeed? The business plan also needs to outline the technology used, the market, competition, and a bird’s eye view from the management perspective.
The team is an important asset and a company must carefully choose a team that complements its vision. With diversity in terms of broad range of skills, the team will be ready for the plethora of challenges a young company faces. The business plan should mention how the team will work together when it comes to decision-making or provide support for running the company.
Technology can solve a lot of problems but how an entrepreneur plans on turning it into a business is very important. As a for-profit venture, you need to do research and work on your product, marketing strategy, and day-to-day operations to ensure maximum efficiency for revenue generation. Determine pricing models for your business and compare them to your competitors in the industry. In the business plan, you should be able to demonstrate what and how to make your business profitable.
Cash Flow Positive
Before you start your company or look for outside funding, your business plan will need to have a clear timetable for your cash flow. It’s alright to lose money in the initial stages of the business, but in order for your business to succeed, you will need to start making money at some point. This timetable needs to be included in your business plan, not only for your reference, but also as a way for investors to gauge your new company’s financial status.
A brilliant strategy can be your ticket to success, but only with execution can you get there. Execution is the small details and decisions that your business will make during its lifetime. After you have determined your business’s strategy, you and your team will need to put it into action. In your business plan, you will need to state HOW you plan on following through on your ideas. It is what your investor wants to see; while you may have the greatest product or idea in the world, without solid execution, your business will not sustain.