There are a lot of things you should consider when you want to launch a startup company. A startup plan is one of the most important things you should plan beforehand, but what it is and how we can manage to get it right? This concept is extremely confusing and many people do not understand this concept well, but there are ways to learn how to handle your startup plan and we will share some of them with you in this article so, grab a pen and paper and start noting down because the whole survival of your startup can be determined before you get it going.
What is a startup plan?
Startup plan is a simple thing with a hard to learn approach. If you decide to commence a startup, surely you should know some basic things such as your target audience, your service type etc. However, the plan for a startup itself is not considered that important at the beginning.
A startup plan is a scheme you make as a road map for your business. It is much bigger than anything else in your business, hence it does not include a detailed explanation for everything you have in mind to do. It describes the path you want to take from point 0 to where you want to be on points A, B, C and so on.
So, to plan it you should give timing to each milestone and try to reach it and on the other hand, you have to consider financial achievement which we will cover in the next section.
Timing based and finance based
When you want to lay a startup plan, you have two approaches of which one of them is based on timing and the other is based on financial terms. For example, to start a startup in the field of online fashion, you have to know when you are going to reach 1000 orders per month and when to 100,000$ sale. You may have 10,000$ order from 90% of your customers and the remaining 90,000 may come from 10% of your customers. So as you can see, the difference between time-based and finance based startup plan is a little bit clearer here because you can reach the amount you expect without reaching the number of customers.
I know that these things only add to the complexity of the startup plan and you should know that none is the determining and only approach to lay down a proper startup plan. In fact, the best way is making a combination of both. you can say that you need 100 orders per day by the end of the first year but if you leave finance out, your plan is not accurate. Consider 100 orders with the value of 10$ per day on website A and 5 orders worth 500$ for website B are taking place, which website is more successful? It’s obviously B and if you have planned to get only 100 orders per day, then you might not be as successful as you might think you will be.
You should have tangible, calculable goals in your startup plan and if you have only 100 orders then you cannot calculate it because the amount will be varied. On the other hand, if you have 2 customers with 1000$ order, you should get worried because they won’t repeat the same type of purchase every day and they may even switch their provider all of a sudden.
In this specific example, you have to lay your startup plan like this: We want to reach a minimum of 50 orders per day with the average spending amount of 25$ for each order. This means that you expect 1250$ orders per day and as you can see it is calculable. After that, you can add another layer to the complexity cake and expect measurable amount of profit as well.
Flexibility is key to startup plan
So, you have learned how to lay the foundation of a startup plan, but how you should frame it? You should consider the startup plan as a road map so what you should do? Should you have a short-term or long-term view? If you stick to a short-term view, then things such as inflation may damage your forecast and then it won’t be accurate. On the other hand, if you plan it based on future estimation, only then it may not be valid for your today’s numbers.
In this case, you should learn the stage-based startup plan. It means that your startup plan should be written, get revised and amended from time to time to prepare for the next cycle. There is no shame in changing your startup plan because insisting on a wrong startup plan will bring you more harm than changing it based on what you have done and things happened in the current market.
The spiral model is a software engineering concept that can be applied to startup plan as well. But what is startup plan? Definition of this concept is like this: “Spiral model is a combination of an iterative development process model and sequential linear development mode.” It means that you should redo your planning, execution, analysis and execution stages after each cycle is done or better before the cycle comes to its final stage.
You can check your current numbers such as the number of customers, amount of sale, current costs etc. and then compare them with your forecasts to see where you have already reached. If you are ahead of the plan then you have to increase your ambitions, if you didn’t make it the way you wanted then you have to identify the reasons and re-plan the next cycle on and on.
One of the most important aspects of this concept is that you should be aware of market changes and if you overlook them then your next cycle will be unproductive as well. In this way, a couple of cycles may go wrong, but gradually each cycle will get closer to your intended target.
After some years, you may have your own special business analysis team and won’t be worried about these types of things, that is to say if you try to discover the malicious cycles then you have a great chance to make your future secure and that’s what separates a great startup owner from a normal one. We believe that all of you can become a member of the first group.
Do you know any other technique that may help us with this procedure? If you know a way to handle startup plan then please let us know about it and we will be happy to share it with other members of startupik.