A startup plan contains all important decisions and investments -

A startup plan maps out the actions you should take to turn your idea into a business.

5.4.2023

Heikki Immonen, Karelia University of Applied Sciences

Startup plan is not a business plan

A Startup plan maps out the actions you should take to turn your idea into a business. A startup plan doesn’t define what your business is going to be like (as a business plan does). Instead, it charts out a process for finding out what the business will be. It’s about executing a discovery process.

An effective startup plan contains goals, decisions & investments, actions, and a timeline

A good startup plan contains the following key elements.

It defines (roughly) the end goal, meaning the type of business you are planning to launch.
It contains all the important decisions and investments you are likely needing to make in order to reach your goal.
Decisions and investments are sorted out based on their costliness, level of uncertainty, and reversibility.
The defined learning actions for all important decisions and investments that prepare you to make these decisions and investments correctly.
Every step has been scheduled in a realistic manner.
The plan is reviewed at weekly meetings, and adjusted if needed on a monthly basis.

In this article, the first two elements are explained in more detail.

First, define your main goals in a flexible way

Short tip: Convert your one-page business plan or executive summary of a business plan into a goal by setting a time for when it should become reality.

Longer explanation: A good goal is SMART = Specific, Measurable, Actionable, Relevant and Time-bound. But how do you define SMART goals for a startup, when you don’t know exactly yet what the startup will eventually be like?

The secret is to define your goals at least partly like requirements, and partly like specifications. The requirements define what the thing you are developing should do or is limited by. The specifications, on the other hand, define what the thing you are developing is.

A good goal guides you and is flexible

In practice, the goal should be something that guides you, but does not limit you too much. If it reflects your values and desires, then it is a good goal. For example:

“Our goal is to create a business by fall 2024 that employs both entrepreneurs at least part-time (50 %) and that we are offering a product that helps small restaurant owners manage their business better.”

In the statement above, “… that employs both entrepreneurs at least part-time (50 %)…” is a requirement. It defines what you want out of the business. On the other hand, “… that helps small restaurant owners manage their business better” is more like a specification, because it specifies the target market of the business.

Your business idea is the goal

When you define your initial business idea in any way (business model, one-page business plan or an executive summary of a business plan), you are defining your goal. Just remember that many parts of your initial business model are likely to change a lot.

If you want to have a short-term and a longer-term perspective separately, you can, for example, define a one-year-goal and a five-year-goal. These goals should be connected, but the five-year-goal should not be as specific.

Second, make a list of important future decisions & investments

Turning your idea into a business is a process of decisions and investments. What are the important decisions or investments you have to make to reach your goal?

We have noticed that most new businesses have similar important decisions and investments waiting for them on their starting up journey. Below, we have organized such common decisions in the different stages of a startup journey:

Stage culminating in non-public offering of a product or service to pilot customers

defining the features and specifications of the pilot version of the product or service
investing in things needed to create, build and operate a pilot version of the product or service
choosing a legal framework for invoicing pilot customers (one option is to register a new company, see next stage)
launching a non-public marketing campaign targeting potential pilot customers

Stage culminating in the legal creation and administrative setup of a company

deciding on the founding members of the company
formulating a stakeholder agreement (shares, responsibilities, other terms)
selecting a business name
choosing a legal framework for the company
registering web domains
registering social media accounts
registering the company
obtaining licenses and permits
selecting an accounting service provider and/or system
selecting an insurance service provider
obtaining a bank account (selecting a banking service provider)

Stage culminating in public launch of a product or service

investing one’s own money in the company
setting up prices
designing a brand identity
creating a website
negotiating on a part-time position with the current employer
selecting a phone and internet service provider
creating a social media identity
finding a location
investing in tools, equipment, or software
investing in infrastructure
finalizing product features for production
finalizing the look of product packaging
creating an online store or a booking platform
investing in inventory or supplies
launching a public marketing campaign

Stage culminating in the beginning of an active growth stage (open beta)

raising capital
hiring employee(s)
investing in things needed for scale-up

About this article

The writing of this article was supported by the INnoVations of REgional Sustainability: European UniversiTy Alliance project. https://www.invest-alliance.eu/ . This project is funded by the Erasmus+ Program.

The content of this article represents the views of the author only and is his sole responsibility. The European Commission and the Agency do not accept any responsibility for use that may be made of the information it contains.