Business plans are often used in many business contexts, but they are especially important for tech companies who typically need them to raise funds from investors.
This article highlights six key sections to include in your tech business plan. Using quality business plan software will have these sections included and make it easier to complete your plan.
This section lays out your company’s mission statement and goals for the future. It also includes a brief history of your company, including what led you to create it and what accomplishments it has achieved so far.
Business Description & Business Model:
This section discusses your company’s products or services, its target market, how it competes with other companies within the industry, and any unique value propositions that make you stand out from competitors.
This section is critical because it describes what sets your company apart from others. Investors will be looking to see if your description of the business is comprehensive and clear so they can understand your product offering and how it fits into existing solutions within the marketplace. Additionally, investors want to know if there is something about your company that makes it sustainable or scalable in future years.
Business owners should be prepared to answer questions about the current state of the market and how it will evolve in future years. Be sure to also include a section on their competitive advantage – what makes your product or service better than others?
Business Growth Strategy:
This section focuses on how you plan to grow your company over time and how this growth fits into your overall business strategy. Business plans with goals that align with investor expectations fare better than those without them.
Businesses with clear long-term goals, such as increasing revenue by 20% each year for five years straight, are more likely to raise funds from investors. Business owners should always describe the current state of the market (and how their company fits into it) before talking about future plans to grow their business.
In this section of your business plan, discuss the ways in which you will expand operations, whether through hiring more employees or purchasing new equipment; growing clientele; or expanding into new markets.
Discuss your operational and marketing plan here. Within the latter, be sure to discuss your promotional strategy here, mainly, how you will attract new clients. Whether you use methods like public relations, SEO for your business, or radio advertising, detail them here.
This business plan section covers all aspects of your business model, including its costs, revenue sources, expenses, and pricing structure. Businesses have different models for generating revenue so this is where you can distinguish yourself from competitors by highlighting how you generate income.
Explain how your business model will remain competitive in the long term.
This is a key section because it covers what investors most want to know: How much money will your company make, and how do you expect it to grow?
Businesses with poor financial information are less likely to receive funding from investors. As appropriate, include a history of your income statements and cash flows. Then show your five-year financial projections in an income statement, balance sheet and cash flow statement.
Include any assumptions you made when creating your projections. Be prepared to discuss how your determined revenue forecasts, expenses, and the cost of goods sold within the context of your business model. Also, be ready to answer questions about assumptions that were necessary for their financial projections.
Your business plan’s appendix includes any relevant information that would help investors better understand your company’s goals and plans if it was not included in other sections of a business plan.
You may include a list of products or services offered, a list of employees who work at your company, or even a list of similar companies in the industry with whom they compete alongside descriptions of why those companies are competitors.
Finally, make sure to keep your business plan up-to-date as many investors may want to wait and see how your company performs over the coming months or years before making a decision to invest in you or not.