For any tech startup company, strategic planning is a vital ongoing function. Completing the plan will help the entrepreneur much more prepared and help understanding the feasibility of the business idea. Strategic plans will help the management attend to the efforts and the important things the startup has to do to make it successful. It is not something that can be designed at the beginning and let go off later, it has to be constantly monitored. It is not advisable for any startup entrepreneur to bypass the strategic planning stage. It is a common mistake done by both partnership firms or any startup business to not have the strategies mapped out, identifying the core they are trying to create. Giving oneself time and space to think and jot down a simple strategic plan can take the business to a long way.
The basic things that are to be considered while creating a strategic plan or business plan is discussed below:
It is important to know the current status of the business. Knowing where the business stands would help one to decide how to go forward and in choosing the direction to go. The starting point must be to determine the startup’s existing vision, mission, objective and strategies. The data has to be compiled to support the qualitative date with the help of the quantitative data. Quantitative data can be assessed considering the general indicators like total revenue, net profit, product variety, staff and customers serves so far. Media indicators like ‘likes’ on Facebook pages, followers on Twitter and Instagram can be considered to come up with the quantitative data. If the business is very new and does not have all such information in hand, necessary system has to be set up to measure the data as the business is moving forward.
*Setting up one year plan:
It is wise to create a list of goals to be achieved in near future with the resources available to the company. Each goal can have a brief description of the action points. For a startup, it is important to put in extra efforts to create achievable and real short-term goals like for a period of six months or three months. One can create a series or chain of real options. The series can have small inexpensive bet like goals when the first is achieved one can move on to the second and so on. Failure to reach one means studying in detail to find out what or where it went wrong.
Setting and writing the realistic short-term goals in an art to be mastered. The goals should be devised in such a way that it costs little, maximize the new things learnt, paves a way for business to learn new insights on the business model before the capital gets exhausted and also the goals should be easily answerable in yes or no format.
Some startups tend to write long-term goals or plans for five years. But it has to be understood that the financial circumstances of the company in the next five years or even the next three years is not possible to project pr presume. So it is always better to stick to one year or two-year plan for the startup.
*Choose the Right Target Market:
No business can serve the needs of everyone. Every business has its own set of customers that it targets at with their products and services. If the right target customers are not chosen, the whole business plan may go wrong and the performance of the business would be poor. An in-depth understanding of the customers would help in improving the product features and the services. If an entrepreneur can get the customers’ needs, wants, problems and perception right, then reaching success is not very far. One should always keep in mind that customers are king no matter what the business is.
Recent researches suggest that more the competition a startup faces at the early stage better is its survival prospects on the longer run. A startup that crops up in a challenging environment makes the startups to focus better and directly on improving customer satisfaction and also works in lowering the overall costs.
Also, an entrepreneur can learn about the business and customers preferences by looking at the operations of the competitor and how they do the business. Assessing the strengths and the weakness of the competitors would help a startup in positioning the business better in the market. Competitors are a rich source of information and data for any startup that strive in the market. Only thing is that the entrepreneur should be able to get it right.
Money is the lifeblood of any business ventures and for startups. A startup entrepreneur has to sure of the way to make money or bring in money to the business. The break-even point or the business’ profit potential are critical and help the business go long way. An entrepreneur has to take time to prepare the financial projections. For instance, an entrepreneur should be able to calculate the approximate figures of profit for next year considering the profit earned this year.
The financial projections should take into consideration the collection period for the outstanding bills from customers and the payment terms for the suppliers. There may be gaps between the amounts payable and amount receivable. Cash flow projections will help in calculating the working capital the business may need to run during the gaps in the cash position. Like that, financial aspects are important for other areas too like startup investment, running monthly overhead, streamlined sales forecast, cumulative cash, break-even.
Successful startup marketing requires the business to have great product and great marketing. The marketing plans of the startups should be kept simple. One reason is the easy understanding and other is that startup cannot spend much resources and time to figure the marketing plan for the startup. To keep the marketing plan simple, Guy Kawasaki in his book ‘The Art of the Start’ suggests to use the MAT techniques which stands for Milestones, Assumptions and Tasks. Benefits of using MAT are that it is less time-consuming, action-oriented and easy to change. MAT can also test assumptions and check for flaws in the plan. The four major steps in creating marketing strategy are finding and locating all the right target market, picking out the right target market, identifying the right tool for the market and the final step involves testing the marketing strategy and tools.
These above discussed factors would assist the startup entrepreneurs create the right business plan for any business startup. Also, a good business plan can tell if the products of the startup are compelling market material.