If you’re ready to break out on your own and start a tech business, you may be wondering where to start. The key to any business is to have a well-thought-out plan.
Writing a business plan will make your tech company idea a reality, at least on paper. The process of writing it will force you to think through every aspect of your business, which is great preparation for actually going through the steps. A business plan is also necessary if you need to apply for a bank loan or seek investors.
A business plan has several elements, which we will detail here.
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This section is the beginning of your business plan, but you should write it last. It will briefly summarize your entire tech company business plan. You should cover all the highlights of your plan and write in such a way that it portrays your business in the most positive way possible.
When you take your plan to a bank or investor, if they don’t like your executive summary, they may read no further.
This section should cover what exactly your company is, when it was founded, the ownership structure of the business, and your vision for your company. It will also state your business entity types, such as an LLC or corporation. It’s essentially a big-picture overview of the nature of your business and what you hope to achieve.
Products and Services
Here you should describe in detail exactly what technology you’re offering. Include all the features and benefits of your products or services and try to convey how your technology offering is unique. You want to create a picture of exactly what value your customers will receive.
If you have a technology product and want to protect your intellectual property, this is not the place to do it. You need to be open about your technology and how it was developed. Just don’t share this plan with anyone except a bank or professional investor.
For this section, you’ll need to do some more research. You want to look at your particular technology industry size and its projections for growth. There are plenty of resources online that will give you this information. You also, perhaps even more importantly, need to assess trends in the industry. What’s popular? What features are popular? Is anything changing in the market? Is your technology going to need to evolve?
Looking at these trends may spur you to modify your product or service based on what’s happening in the market. In a technology business, you need to carefully consider how rapidly technology is changing. If what you’re offering could quickly become obsolete, you need to plan how you’re going to move forward after that happens.
Again, you’ll need to do some research. Analyze all your main competitors and their strengths and weaknesses. From this information, try to brainstorm what advantages you can create for your company. Can you emulate your competitors’ strengths and improve on their weaknesses?
What can you do to make customers choose your technology product or service over alternatives? You’re looking for a competitive advantage that you can create that will help you get ahead. If you have an intellectual property related to your product or service, this can be your competitive advantage.
You should consider protecting that intellectual property with a patent.
In this section, you’ll detail what you need to run the company in terms of equipment, location, and human resources. You’ll also detail exactly how the company will operate on a day-to-day basis. The information included here is all logistical. How are products made, how do they get to customers, and what else has to happen to keep the company running every single day.
Also, include who you will need in order to do this. What employees will you need? Can you outsource certain functions? What functions will you handle yourself? In the beginning, you may have to “wear many hats” and do much of the work yourself.
Sales and Marketing
Now you need to determine how you’re going to reach your customers, and what message you’re going to send. You need to create a value proposition that conveys in one sentence exactly what value you’re providing to customers. Then you need to plan how you will convey this message, whether it’s through social media, optimizing your website, paying for ads, or direct sales to customers.
To create this plan, you need to know your target market and the best places to find those people. Are they more likely to be on TikTok or Instagram, or instead on Facebook and LinkedIn? If your customers are businesses, you need to be prepared to make direct sales calls.
Detail exactly who’s going to run the company. Include titles of the managers and exactly what their roles and responsibilities will be. If you’re going to be a one-person show, then detail exactly what you will do for the company. This will help you understand exactly what you’re getting into.
This will include your startup costs and your financial projections for at least three years. Financial projections include estimates of your sales and expenses, which will tell you how much profit you will make on a monthly and yearly basis.
It will also show you how much you need to sell on a monthly basis to break even, and how much cash you’ll have at any given time. The most important part for you right now, though, is the startup costs. List everything you will need to purchase or spend money on to get the business started on day one.
Look up approximate costs and be realistic.
Once you’ve created your plan, you’ll be much more prepared to launch your technology company. You’ll know what to expect, and what it will take to be successful in terms of time, money, and people. It should also serve as a motivator, and get you ready to jump in and get to work!