How to Write a Business Plan for a New Startup
Crafting a business plan gives you a strategy for every step of starting your company so you can better prepare and manage hurdles.
To increase your odds of a successful business startup – whether, for an additional business or your first business venture, you need a roadmap. An effective business plan can also help you obtain funding or bring on new business partners. This may include an executive summary, company description, and operational planning that includes your digital marketing initiative for generating leads.
You will need to gain and stay top of mind for potential customers. First, let’s answer some top-of-mind questions.
Do You Need a Business Plan?
While the question has been raised as to the value of making a business plan in the 2020s, research shows that those that do have a higher level of success. Additionally, most lenders require viewing a business plan from applicants. A business plan is meant to take market demand and the audience into account. This effort will likely pay off by emphasizing how your business meets a real need and stands out in the market.
How to do a Market Segment Analysis for a Web Business?
If you are just starting out and only have one audience to reach, this is easier. More mature businesses need to invest more time into understanding diverse and evolving consumer needs that prompt marketing pivots. Know everything you can about your various target markets upfront. This will help you define your marketing messages. Ongoing site audits and market research will then help you refine this as needed to maintain a competitive edge.
Having a website permits even small companies the chance to market their products and services. Rather than taking on the huge task of reaching a global audience, business planning starts with identifying how to reach your ideal potential customers. Establishing a web-based business doesn’t necessitate the large capital investment of having a bricks and mortar store location. The Internet has exploded the tremendous opportunity of getting millions of potential customers to find you and purchase your goods and services.
A business owner gets to lead the charge. Everyone that is or will be on your team with a responsibility for delivering marketing results will value your clarity. From social media managers, content marketing strategist, web designers and development teams, to organic search and paid search managers, all their efforts should align with the business and marketing plan that you provide them.
Once you have established your general target market, it’s time to segment. Narrowing down your target audience will help you make better decisions that are more easily attainable. A deep knowledge of your ideal customer should underpin every part of your company’s marketing strategy. Additionally, having a well thought out sales funnel should be a high priority for business owners and the marketers that they hire.
So, what steps does a person take to create a business plan for a new venture?
7 Steps for Creating a Business Plan for a New Website
1. Identify the Clear Parameters of your Market.
2. Identify your Ideal Customer.
3. Conduct a Competitive Analysis.
4. Conduct a full Product Analysis.
5. Identify What it Takes to be Successful
6. Create Financial Projections.
7. Decide on a Doable Business Plan Based on Research Findings
As a business, you should be aware of your core business goals, KPIs, and what type of money-driving content that you need. Whatever you do, don’t start with a website design. Do your marketing research first so that it can inform your development and design teams.
A foundational component of any web-based business plan is a quality market segment analysis. Once you have that, it is easy to lose the big picture without a team in place to help you test and tweak your business marketing plan. Segmenting your market into different targets can help you better define not only your competition but other products that are targeting your consumers’ dollars. And turn, remain agile. Consumer buying preferences are changing faster than ever. Your initial business analysis will reveal where to focus and re-focus your online marketing efforts.
1. Identify the Clear Parameters of your Market
Why is market analysis important in a business plan?
Effective market analysis provides valuable insights into shifts in the economy, consumer purchasing preferences, competitors, ongoing market trends, demographics, and the traits of customers’ expenditure. Market analysis is the thorough process of data collection to choose whether the product or the service that is coming in the future will cater to customers’ needs and defines the parameters involved. This data collection offers a planned approach that shapes your business methods to reach your target audience.
These parameters vary based on many factors; it starts with your specific product or service. For example, if your product or service is designed for B2B transactions, then you may segment the market based upon industry, sale volumes needed, market saturation, number of employees, or location.
If your business targets sales directly to consumers (B2C), then your market segments will be different. Location factors are prominent if your business serves people in a specific community, city, state, or country; it will influnce your maps marketing strategy. Often, your product’s price point also influences your market segment. For example, if you are selling cars that average a sticker price of $150,000, then you’ll need to understand the buying habits of customers with higher than average incomes.
2. Identify your Ideal Customer
Most businesses find it more challenging to put into the right words for the web – even when they are very confident when talking about their business. If you want to be found easily, words matter, as BERT SEO and Natural Language Processes teach us.
The easiest way to accomplish this is through a consumer behavior analysis and a series of questions that help support your initial keyword research. Important questions for any web business to answer include:
- How much time does your customer spend online before making a purchase decision?
- What websites and channels do they visit?
- What brands do they typically purchase from?
- Which consumers click on Featured Snippets and which take action directly on a website?
- Is your ideal customer typically starting a purchase decision on a mobile device?
Additional general questions that further identify your target audience include:
- How old is the largest segment of your audience? Does your product fit their average yearly income?
- Why do they need or want to purchase your product?
- Do you have a unique selling proposition to gain the sale over others?
- Where does your customer base reside and does it matter if you are selling locally?
- Can your price point manage shipping, remote meeting, follow-up customer service, refunds, exchanges, etc.?
The more you can learn when profiling your customers, the more successful your market segment analysis will be. It is vital that your website offers a great user experience.
Write out your Business Purpose, Features, and Audience
Be clear as to the purpose of your business website. Writing it down helps you articulate and refine it. It starts with the features your audience will like to see. This is the audience for which the website is intended. Being customer-centric leads to success. It’s easy to talk about what we’d love to do. But you have to be filling a real need for existing consumers and offer value. Knowing your purpose decides which features to include on your website and Google Business Listing.
We’re all about meeting client goals. And that means offering solutions and answering questions for your target audience.
3. Conduct a Competitive Analysis
To avoid any surprises or disappointments, you need to first know what it will take to succeed in a new business niche. Understanding why the top competitors in a specific niche are successful will help establish a road map of what your customers’ buying journey looks like for the new product you wish to sell.
This applies to businesses that sell services as well as retail websites. Important metrics to examine here include organic search engine rankings, product demand, product features, product pricing, existing paid search activity for the product, local competition and product management metrics, web design and any other key factors that may cause a consumer to click through to a competitor’s site over your own.
Discovering the weaknesses of competitors’ business strategy is one of the most significant things that this analysis will achieve. This can identify low-hanging fruit so your business can achieve come goals easier. We often find opportunities by evaluating top competitors weaknesses and success by conducting a link profile and technical SEO audit.
4. Conduct a full Product Analysis
What is a product analysis?
Product analysis encompasses deciphering product features, costs, availability, distribution, quality, appearance, demand, and other aspects. Product analysis is conducted by product managers attempting to understand competitors, by interested buyers, and by third-party reviewers.
This will let you analyze your product’s strengths and weaknesses without owner bias. It is important to be as objective as possible during this step. You need to determine where your web business has an advantage over your competitors. Test to know that your product pages perform well on mobile devices.
For example, the tone of your brand voice, your website’s design, ordering system, or how you connect entities to propagate your Google Knowledge Graph = all may give you a competitive edge. Just as important, though, is to outline any weaknesses your web business has. The end result of the market segment analysis will give you ways to improve your weak points. One note here is that because many business owners find it hard to honestly evaluate their own product or service, it is worth the cost to hire an outside business strategist to examine your web business.
In order to drive your desired business outcomes for your consumer products, consumer services, and business brand, you need a proven approach to cross-channel media management and customer experience. The market analysis section of your plan provides evidence that there is a niche in the market for the product you wish to offer. This analysis provides the foundation on which your digital marketing and sales strategy will rest.
5. Identify What it Takes to be Successful
Gather as much – and the right – information as possible. The Internet is a goldmine for business know-how articles. The key benefit you gain from a skilled digital marketing consultant is that they can help you apply that information and their experience to your personal business plan.
Many market research firms annually publish updated white papers, market studies, and projected search trends. However, it’s easy to get off track unless you know how to apply it to your industry. If you are unable to find the complete study or dataset, evaluate public annual reports and financial information that relates to where you wish to go. Hiring a marketing research specialist is the best way to profile your customer.
Focus your business’s process and products on customer needs.
To succeed in business in the 2020s, you need agility, good planning, organizational skills, and the ability to respond quickly to consumers’ needs. Many people start off their business thinking that they’ll turn on their computers or someone will pick up their phone to call you, and you start making money immediately. In reality, making money in a business is often much more challenging than they initially thought. It takes analytical thinking, determination, and detailed record-keeping. You have to know how to set up business performance measurements, glean key insights from your marketing reports, and continually invest and reiterate.
6. Create Financial Projections
How important is it to be good at managing business finances?
At every stage, you need to know where your business stands financially. By identifying early any potential challenges you could be facing, time is on your side to create strategies to overcome those challenges. Organic search marketing is the number one investment that most businesses need to make to see payoffs. Know that this is never a once-and-done investment. Showing up when and where consumers look for your products requires an on-going commitment.
Begin with a simple revenue model that projects the number of buyers that exist for your product, the share you can take, realistic web traffic projections, and an expected conversion rate to customers for each product or service you will be offering. Run a number of scenarios for years one through three until you are comfortable the numbers are reasonable. Unrealistic financial projections are the No. 1 mistake most business startups make.
In her December 2, 2020 42 Small Business Statistics: Everything You Need to Know article, Julija Andjelic says that “82% of businesses that fail do so because of cash flow problems”. Given that approximately 534,000 new businesses start monthly, we know that most markets are highly competitive. We encourage going for your dream of being your own boss, but it helps to know the numbers. Knowing how to manage business finances or hiring someone who does will help ensure your success.
7. Decide on a Doable Business Plan Based on Research Findings
Once you’ve gathered the vital information about an online nice, studied its competitors, and built a customer profile, your market segment analysis gives you a well-defined target market and digital marketing strategy that helps drive both visitors and buyers to your website. Don’t get stuck not making a timely decision. A successful business owner has to know how to make timely and informed decisions.
Consistency is a key element to making sufficient money to keep a business going. You’ll be required to keep doing what is necessary to be successful day in and day out. Having an outside team of encouragers and an internal team that aligns with your business culture makes a huge difference. Before you even hire a web designer, enlist the help of a person who knows how to do effective SEO. This will include using essential schema types to describe your organization or local business.
What does marketing do for a small business start-up?
Marketing serves as the face of your business. It coordinates and produces all print and digital materials representing the business. It is the Marketing Department’s, whether one person or many, role to reach out to prospects, customers, partners, suppliers, investors and/or the community while creating your desired overarching image. All this should represent your company in a positive light that reflects who you really are.
Your company’s purpose will be an umbrella to all marketing campaigns. It will signal which customer segment is a priority to target. With a marketing strategy in place, a business has the necessary focus; without one, they are more prone to fail. When inspired, it is easy to rush into the idea without exploring the necessary possibilities. By consulting with trusted sources about your idea, you can avoid the pitfall of working on your business plan in isolation. Once you take your new business live on the web, the necessary marketing investments are needed to promote it. Also, after your new business website is live, success often depends on how well you understand your business data analytics. So, what does that mean?
The Role of Data Science in Starting a Business
Are data analytics important to the small business owner?
Yes. Data analysts have an essential role. The right insights from your market research informs your starting strategy, but used properly, data analytics can guide all aspects of your business. From all forms of marketing to digital security, data science may easily be the most valuable tool entrepreneurs use as they develop their business ideas.
Customers want to receive products from retailers delivered to them fast and painlessly. By analyzing and applying data-informed insights, you can make it so.
Additionally, web security is important to small businesses as opportunities for theft and hacking grow. Whether you are solo at start-up as a small business owner or starting an additional business website as a corporation, the computers and network for everyone working in your business should be surveilled for threats constantly.
Once again, data science can support this need. It’s important to distinguish between dangerous activity and acceptable digital behavior of customers and employees. Entrenched in the field of cybersecurity, data scientists develop models that watch for malicious activity and may predict and avoid potential attacks. A key part of running a business is keeping it safe for you and others who engage with you.
Lean startup business plans are less common but still leverage a standard structure.
Why do Most Business Start-ups Fail?
A lack of adequate and accurate business planning are the first two reasons why new businesses fail. It also takes passion, patience, purpose, and practical funding.
According to 2019 business data from the U.S. Bureau of Labor Statistics, “approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more”. The Feb 28, 2020, Top 6 Reasons New Businesses Fail article by Michael T. Deane identifies that not sufficiently investigating your niche market is a top business startup problem.
To stand tall among that 25% percent of successful business owners, give rigorous attention to these business planning tips. When you realize that you need it, embrace change quickly. Today, more companies are exploring alternative project management methods and adapting them to their business models.
In addition to the above tips, to run a successful online business be prepared to do the following:
- Determine your customer base
- Create buyer personas.
- Establish evergreen content requirements.
- Establish web store requirements. Do you need a shoppping cart, a buiness PayPal account, forms where people can request your services?
- Create a Google My Business account.
Crafting a successful business strategy means narrowing your priorities to the most important three or four main points that are tailored specifically to your business and audience’s needs.
Where to find free, trusted business planning resources?
Additional resources we recommend:
“If your company’s already established, a business plan provides a sense of direction and a detailed operational plan. It’s an important management tool for setting expectations, monitoring growth, and charting future direction.
It’s important to know, however, that a business plan is NOT a guide to entering a particular line of business or a particular market. Instead, it’s a guide that shows how you’re going to be competitive in that business or market, how you’re going to succeed.” – Minnesota Economic Development
Avoid common business venture mistakes by taking your time and planning out all the necessary steps you need to achieve success. Learn how your business can reach consumers who talk to their mobile vevices. Hill Web Marketing can help you determine aspects of how the business will be run, who will help set it up, and your marketing aims and business objectives.
Call 651-206-2410 for services to create a strong business plan that works for getting found and generating revenue. Learn how search is core to your digital marketing plan.