Business Plan for Software Company
Written by Dave Lavinsky
Software Company Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their software companies.
If you’re unfamiliar with creating a software company business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a software company business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your software company as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a software company or grow your existing software company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your software company to improve your chances of success. Your software company business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Software Companies
With regards to funding, the main sources of funding for a software company are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for software companies.
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How to write a business plan for a software company.
If you want to start a software company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your software company business plan.
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of software company you are running and the status. For example, are you a startup, do you have a software company that you would like to grow, or are you operating a chain of software companies?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overview of the software company industry.
- Discuss the type of software company you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
In your company overview, you will detail the type of software company you are operating.
For example, you might specialize in one of the following types of software companies:
- Open source: An open source software company is one that produces a code base that is free for any entity that desires to use it. The value of this structure is found in the auxiliary services and customizations that are provided to clients. Examples of highly-profitable open source software companies include Linux and Red Hat.
- Client-specific: As cloud computing continues to grow in popularity, more companies look to specific software programs to drive their businesses further into high-growth positions. Examples of client-specific software companies include Oracle and SAP.
- Programming services: Software companies that provide programming are essential to the tech industry. Examples include Microsoft and ADP, well-known giant software companies.
- System services: Software companies have become highly successful, as they’ve perfected the art of creating systems for personal computers and the growing field of tablets and other personal devices. Examples of software companies that focus on systems include Intuit and Adobe.
In addition to explaining the type of software company business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of software programs created, the number of specialized SaaS services created, or reaching X number of clients served, etc.
- Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry or market analysis, you need to provide an overview of the software company industry. While this may seem unnecessary, it serves multiple purposes.
First, researching the software company industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your software company business plan:
- How big is the software company industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your software company business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your software company business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: start-up tech companies, companies in need of CRM software, research and development companies, and cloud-computing corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of software company business you operate. Clearly, start-up tech companies would respond to different marketing promotions than major cloud-computing corporations, for example.
Try to break out your target customers in terms of their demographic and industry profiles. With regard to demographics, include a discussion of the locations, type of services or programming needed and revenue potential of the client companies you seek to serve.
Psychographic profiles explain the wants and needs of your target clients within the companies you will target. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other software company businesses.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes generic software outlets, private individual providers, and computer servicing companies.You need to mention direct competition, as well.
For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of software company are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regard to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide options for the customized software?
- Will you offer products or services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer bundled pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a software company business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type of software company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide open source programming, SaaS products, or software to support Microsoft systems?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your software company. Document where your company is situated and mention how the site will impact your success. For example, is your software company located in a professional technology park, a standalone building or is it purely online? , Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your software company marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Quarterly press releases to industry-wide interest groups
- Engage in social media mining and marketing
- Offer informative blogs; become a speaker in seminars
- Create a strong presence at tech trade shows and conferences
- Give expert opinions on tech social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your software company, including meeting with clients, planning new software development, training personnel, and running administrative services.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign your Xth contract, or when you hope to reach $X in revenue. It could also be when you expect to expand your software company business to a new city.
To demonstrate your software company’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing a software company. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a software company or successfully running a small technology development firm.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you introduce a new software program on a yearly basis, or will you customize software for return clients? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your software company, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit, but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a software company:
- Cost of computer and software equipment
- Payroll or salaries paid to staff
- Business insurance
- Other start-up expenses (if you’re a new business) like legal expenses, permits, furnishings and office supplies
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include the patents you own on software programs or a list of clients on monthly retainers.
Writing a business plan for your software company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the software company industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful software company.
Software Company Business Plan FAQs
What is the easiest way to complete my software company business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily write your software company business plan.
How Do You Start a Software Company Business?
Starting a Software Company business is easy with these 14 steps:
- Choose the Name for Your Software Company Business
- Create Your Software Company Business Plan
- Choose the Legal Structure for Your Software Company Business
- Secure Startup Funding for Your Software Company Business (If Needed)
- Secure a Location for Your Business
- Register Your Software Company Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Software Company Business
- Buy or Lease the Right Software Company Business Equipment
- Develop Your Software Company Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Software Company Business
- Open for Business
Where Can I Download a Free Business Plan Template PDF?
Click here to download the pdf version of our basic business plan template.
Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.
We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.
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Other Helpful Business Plan Articles & Templates
How to Write a Tech Startup Business Plan to Win Investors
You have a great business idea. Now you’re doing the hard part: raising capital.
With a failure rate of 63% in the tech startup industry, you need to have a highly compelling business idea and go-to-market strategy to win over investors.
We’re going to make writing a startup business plan really simple by providing you with a step-by-step guide along with a business plan template you can use to build startup business plan that wins investors.
What is a tech startup business plan?
Why do you need a technology startup business plan.
- 1. Executive summary
- 2. Market opportunity
- 3. Product or service overview
- 4. Marketing and sales strategy
- 5. Team and management structure
- 6. Key milestones
- 7. Financial plan
Sample tech startup business plan [template]
A technology startup business plan is a document that is used to outline the goals, strategies, and objectives of a new tech startup business. This document is often used to secure funding from investors and to help the business leaders form a unified sense of identity and purpose.
The business plan should include information on the products or services offered by the startup, the market opportunity, the business model, the team, the financial projections, and the risks and challenges associated with the business. A tech startup’s business plan should generally address three major areas of the business:
As a startup moves through various stages of growth, the business plan should be updated with new information and forward-looking goals. In this way it can serve as a “source of truth” for all of the startup’s stakeholders.
A business plan is an essential tool for any tech startup. It provides a road map for your business, helping you to define and communicate the company’s vision, goals, and strategies. Having a singular document that acts as a single source of truth for the business will help to keep the startup’s core leadership team unified and provides guidance on how to navigate the often-complex world of starting and growing a business.
You can utilize your startup business plan to secure funding and partnerships. A well-crafted business plan can also help you attract and retain top talent.
In summary, you need a technology startup business plan to:
- Unify the startup’s leadership team
- Secure funding and partnerships
- Attract top talent
- Act as a guide for navigating starting a business
This article will act as a guide for writing a business plan for tech startup founders.
7 key components of tech startup business plan
You know you need a business plan for your tech startup. You know generally what should be included. But, now you need to actually get to writing. We’re going to try to make this as easy as possible by outlining the 7 key components your technology startup business plan should have.
If you’re looking for a real shortcut, make sure you download our easy tech startup business plan template. Included in it you’ll find a sample business plan and an outline of what we’ll cover below.
Stick with me if you’re looking for a more detailed explanation of each of the 7 components.
- Executive summary
First up is an executive summary. This brief section should provide some context to readers as they begin to read your business plan. It’s your opportunity to share, at a high level, your business idea.
At a minimum, this section should outline what your business is, the general market you target or industry you are in, and what your products or services are. Optionally, you can include some information about your business’s history, bios of key members of your leadership team, competitive advantages, key customer benefits, and your company’s goals. How detailed you get with this section is up to you. Use this as an opportunity to provide an overview before you get into more detail in the other sections of your business plan.
- Market opportunity
This is where you will start to go into more detail about your business. Starting with the market opportunity allows you to paint the picture of the why _behind your tech startup before you go into the _what . Ultimately, you can only sell the feasibility of your business by backing it up data on who your potential customers will be. This section will help to inform the marketing strategy and sales plan later in the startup business plan document.
Take the time in this section to walk through the research you have done on your audience. To start, you should have data points on the following:
- Demographic data for your target market (age, gender, income, occupation, location)
- Main pain points of your target market
- Values and interests of your target market
- Needs and wants of your target market
It can also be compelling to provide some information on how your products or services will stand out from the competition. Consider answering the following questions in this section:
- Who are your main competitors?
- How will your products or services meet the market’s needs better than the competitors?
- Will your products or services be able to reach a currently unreached audience?
- How will you differentiate yourself from the competition within your target market?
All of this data should back up what the real market opportunity is for your business. Make sure this market opportunity is realistic and achievable. This should lead well into our next section which will cover in more detail the products or services your tech startup will offer to the market.
- Product or service overview
After you have outlined the market opportunity your business will take advantage of, it’s time to provide more details on the exact products or services that you will offer to your market.
Each product or service you include in this section should have a corresponding functional and technical description. The functional description should aim to outline to a layperson what the product or service is, what it does, and how it will be used. The technical description should outline the technologies each product or service utilizes or what technology has been developed specifically for the new business. It’s appropriate to go into detail here to give potential investors more confidence in your product or service.
It’s also important to include information on how the products or services will ultimately benefit customers and what problem they will solve for customers. If you have more than one product or service, make sure to outline this information for each one.
- Marketing and sales strategy
The marketing and sales strategy section of a technology startup business plan should include a description of the target market, the company's marketing and sales objectives, the strategies and tactics that will be used to reach these objectives, the key marketing and sales metrics that will be used to measure progress, and the budget for marketing and sales activities. In short, it should outline your business’s marketing and sales plan.
Starting with the objectives, you should outline specifically what you are trying to achieve with your marketing and sales efforts both in the short term (likely for launch) and long term. Each of your objectives should align with your overarching business goals and make sense for the market you outlined earlier in your business plan. Be realistic here. It’s better to estimate low and over deliver than to overestimate your success.
As you outline the strategies and tactics you will use to achieve your objectives, consider both the what _and the who_:
- (What) What tactics will you employ to achieve your goals?
- (What) What marketing tools do you need to achieve your goals?
- (What) What marketing channels will you use?
- (Who) Will the marketing work be done internally?
- (Who) Will you hire freelancers or a CMO to help implement the work at hand?
- (Who) Will you need a sales team right away?
- (Who) How will marketing and sales work together to achieve your goals?
Your marketing and sales strategy should be backed up by the market opportunity information you provided earlier. The strategies and tactics should be aiming to reach your target market.
Next, outline the metrics that will be used to measure marketing and sales progress. You should include specifically when these metrics will be measured and who will be held accountable for them.
Finally, include a marketing and sales budget in this section. The budget should be broken down by channel and tactic, so that dollars can be accurately tracked and attributed to results.
- Team and management structure
Up next is the team and management structure part of the business plan. To start, provide an overview of the startup’s organizational and management structure. Providing a graphical representation of the reporting structure can be helpful.
This can then lead into an overview of who owns or manages each of the key sectors of the business (CEO, CTO, CMO, etc.). It’s a good practice to provide a bio of each of the members of the leadership team, including their education, work history, and relevant expertise. Along with their bio, provide a description of their role and responsibilities within the organization.
After you have covered the leadership team, outline the other team members along with their roles and responsibilities. Following this, include some commentary on the team’s strengths and weaknesses as well as what gaps remain within the organization. If additional staffing is required, provide a hiring plan that includes a description of the role, salary, and strategy for recruitment.
End this section with an overview of the organization’s values. Paint a picture of what it’s really like to work for your company and how you build a sense of ownership and responsibility within the team. Highlight how you intend for the team to work together to accomplish the company’s goals.
- Key milestones
At this point in the business plan you have outlined the target market, products and services you will offer as well as the members of your team that will bring the company’s vision to life. In this section you’ll provide a timeline of the past and future milestones for your business. This will help to illustrate your startup’s growth path and how you intend to move forward.
Some key milestones to consider when writing this section:
- When business was founded.
- When the business was/will be launched publicly.
- When the business was/will be profitable.
- When the business reached/will reach funding milestones.
- When development project milestones were/will be reached.
- When marketing milestones were/will be reached.
- When key staff were/will be hired.
- Future product release dates.
You might consider showcasing this information in the form of a graphic like this:
In addition to a company timeline, we recommend you include additional data in this section such as:
- Current number of employees and the number of employees projected in the future.
- The amount of revenue generated in the past and projected for the future
- Key clients or contracts that have been signed or that are in the works.
This section should clearly demonstrate your startup’s ability to grow from an idea into a business. Providing concrete dates and real data in this section will provide some validity to your startup and showcase what you’re able to accomplish.
- Financial plan
The final section of your technology startup business plan should be a financial plan. This is the section of the business plan that outlines how the business has been funded to date and how it will be financed moving forward.
There is no one way to write the financial plan section of a business plan, as the amount and type of information that needs to be included will vary depending on the business and the specific financial goals of the plan.
However, there are some basic elements that should be included in most financial plans. These include a pro forma income statement, balance sheet, sales forecast, and cash flow statement. The pro forma financial statements should be based on historical financial data, if available, and should include assumptions about future revenue and expenses. The financial plan should also include a discussion of the company's capital structure, including its debt and equity financing.
If you’re at a very early stage with your startup and seeking a modest amount of funding, it’s probably sufficient to air on the side of brevity. If you’re seeking series A, B, or C funding, you’ll likely need a very comprehensive financial summary along with a detailed plan on how the funding will be utilized to grow the business. Seek counsel from a business accountant if you’re unsure of how to provide adequate financial documentation.
We have walked through the 7 key elements of any tech startup business plan. Now we’re going to share a sample business plan template to help you get started with writing your own!
Innovation is critical to success in the software industry. The executive team of this startup believes they have the next big thing. They have developed a new software application that helps businesses manage their social media accounts more effectively. The software provides insights on when to post, what to post, and how to engage with customers. The software also allows businesses to track their social media analytics and see the return on investment for their social media campaigns.
The executive team has extensive experience in the software industry and believes this new product has the potential to be a game-changer for businesses. The team is seeking $1 million in seed funding to help with product development, marketing, and sales. The company plans to generate revenue through monthly subscription fees and by selling data analytics services to businesses.
The social media management software market is expected to grow from $9.3 billion in 2020 to $17.4 billion by 2025, at a compound annual growth rate (CAGR) of 13.2%. This growth is being driven by the increasing use of social media by businesses of all sizes and the need to effectively manage social media accounts to drive brand awareness and customer engagement.
The software application developed by the startup helps businesses manage their social media accounts more effectively. The software provides insights on when to post, what to post, and how to engage with customers. The software also allows businesses to track their social media analytics and see the return on investment for their social media campaigns.
The software is available on a monthly subscription basis and businesses can also purchase data analytics services to help them further understand their social media campaigns.
The company plans to generate awareness for the software through online and offline marketing campaigns. The team will target small businesses and medium businesses that are active on social media but do not have the resources to effectively manage their accounts.
The company will use a mix of paid and organic marketing to reach its target audience. For paid marketing, the company will use Google AdWords and Facebook Ads. For organic marketing, the company will use content marketing and social media outreach.
The company plans to sell the software on a monthly subscription basis. The team will offer a free trial to businesses to get them started with the software. Once the free trial expires, businesses will be charged a monthly subscription fee.
The executive team of the startup consists of experienced software professionals. The team has a proven track record of developing and marketing successful software products.
The company plans to hire a sales and marketing team to help generate awareness and drive sales of the software. The team will be based in the United States and will consist of sales and marketing professionals with experience in the software industry.
The company plans to achieve the following milestones over the next 12 months:
- Launch the software application
- Generate 500 paying customers
- Achieve $1 million in annual revenue
The company is seeking $1 million in seed funding to help with product development, marketing, and sales. The company plans to generate revenue through monthly subscription fees and by selling data analytics services to businesses.
The company projects the following financials for the next 12 months:
- Revenue: $1 million
- Expenses: $500,000
- Profit: $500,000
As a startup founder you know that having a software startup business plan on hand is critical to win over investors and get your business funded. However, no one wants to spend days writing a complicated it startup business plan. It’s much more important to focus on the day-to-day operation associated with building your tech startup.
To help save you time (but still create a winning startup business plan), we’ve outlined the 7 key components of any tech startup business plan:
As you tackle writing your own, make sure you refer back to this guide along with our template to ensure you’re writing a compelling business plan that is sure to win over investors!
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Software Company Business Plan
High margins, low startup costs, global reach, and a recurring revenue model make starting a software company a lucrative and rewarding profession.
Need help writing a business plan for your software company? You’re at the right place. Our software company business plan template will help you get started.
Free Business Plan Template
Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!
- Fill in the blanks – Outline
- Financial Tables
How to Write A Software Company Business Plan?
Writing a software company business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:
1. Executive Summary
An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.
Here are a few key components to include in your executive summary:
Introduce your Business:
Start your executive summary by briefly introducing your business to your readers.
Products and services:.
Highlight the software company services you offer your clients. The USPs and differentiators you offer are always a plus.
Marketing & Sales Strategies:
Financial highlights:, call to action:.
Ensure your executive summary is clear, concise, easy to understand, and jargon-free.
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2. Business Overview
The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:
Describe your business in this section by providing all the basic information:
Describe what kind of software company you run and the name of it. You may specialize in one of the following software company businesses:
- Enterprise software companies
- SaaS companies
- Mobile app development companies
- Web development companies
- Cybersecurity companies
- HealthTech companies
- Describe the legal structure of your software company, whether it is a sole proprietorship, LLC, partnership, or others.
- Explain where your business is located and why you selected the place.
If you’re an established software company, briefly describe your business history, like—when it was founded, how it evolved over time, etc.
This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.
3. Market Analysis
The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.
Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.
Market size and growth potential:
Describe your market size and growth potential and whether you will target a niche or a much broader market.
Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.
Here are a few tips for writing the market analysis section of your internet software company business plan:
- Conduct market research, industry reports, and surveys to gather data.
- Provide specific and detailed information whenever possible.
- Illustrate your points with charts and graphs.
- Write your business plan keeping your target audience in mind.
4. Products And Services
The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:
Describe your products & services:
Mention the software company products or services your business will offer. This list may include:
- Custom Software Development
- Commercial Off-the-Shelf (COTS) Software
- Software as a Service (SaaS)
- Software Development Tools
- Software Consulting
- Software Maintenance and Support
- Software Testing and Quality Assurance
- Training and Documentation
Quality measures, additional services.
In short, this section of your software company plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.
5. Sales And Marketing Strategies
Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:
Unique Selling Proposition (USP):
Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.
Marketing strategies:, sales strategies:, customer retention:.
Overall, this section of your software company business plan should focus on customer acquisition and retention.
Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your software company, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.
6. Operations Plan
The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:
Staffing & Training:
Operational process:, software & tools:.
Include the list of software & tools required for a software company, such as cloud services & infrastructure, project management tools, Version Control Systems, collaboration & communication tools, etc.
Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.
7. Management Team
The management team section provides an overview of your software company’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.
Introduce your management and key members of your team, and explain their roles and responsibilities.
Compensation plan:, advisors/consultants:.
Mentioning advisors or consultants in your business plans adds credibility to your business idea.
This section should describe the key personnel for your software company services, highlighting how you have the perfect team to succeed.
8. Financial Plan
Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:
Profit & loss statement:
Cash flow statement:, balance sheet:, break-even point:.
Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.
Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.
The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.
- Add a table of contents for the appendix section to help readers easily find specific information or sections.
- In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
- Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
- Include any legal documents such as permits, licenses, and contracts.
- Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.
Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.
Remember, the appendix section of your software company business plan should only include relevant and important information supporting your plan’s main content.
This sample software company business plan will provide an idea for writing a successful software company plan, including all the essential components of your business.
After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our software company business plan pdf .
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Frequently asked questions, why do you need a software company business plan.
A business plan is an essential tool for anyone looking to start or run a successful software company business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.
Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your software company.
How to get funding for your software company?
There are several ways to get funding for your software company, but self-funding is one of the most efficient and speedy funding options. Other options for funding are
- Bank loan – You may apply for a loan in government or private banks.
- Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
- Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
- Angel investors – Getting funds from angel investors is one of the most sought startup options.
Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.
Where to find business plan writers for your software company?
There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your software company business plan and outline your vision as you have in your mind.
What is the easiest way to write your software company business plan?
A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any software company business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .
How do I write a good market analysis in a software company business plan?
Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry. We can categorize the process of writing a good market analysis section into the following steps:
- Stating the objective of your market analysis—e.g., investor funding.
- Industry study—market size, growth potential, market trends, etc.
- Identifying target market—based on user behavior and demographics.
- Analyzing direct and indirect competitors.
- Calculating market share—understanding TAM, SAM, and SOM.
- Knowing regulations and restrictions
- Organizing data and writing the first draft.
Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.
How detailed should the financial projections be in my software company business plan?
The level of detail of the financial projections of your software company may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a complete view of your financial performance.
Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.
What key components should a software company business plan include?
The following are the key components your software company business plan must include:
- Executive summary
- Business Overview
- Market Analysis
- Products and services
- Sales and marketing strategies
- Operations plan
- Management team
- Financial plan
Can a good software company business plan help me secure funding?
Indeed. A well-crafted software company will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.
So, if you have a profitable and investable business, a comprehensive business plan can certainly help you secure your business funding.
What's the importance of a marketing strategy in a software company business plan?
Marketing strategy is a key component of your software company business plan. Whether it is about achieving certain business goals or helping your investors understand your plan to maximize their return on investment—an impactful marketing strategy is the way to do it!
Here are a few pointers to help you understand the importance of having an impactful marketing strategy:
- It provides your business an edge over your competitors.
- It helps investors better understand your business and growth potential.
- It helps you develop products with the best profit potential.
- It helps you set accurate pricing for your products or services.
About the Author
Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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7 Elements to Successfully Write a Tech Startup Business Plan
Vy Le | 18/05/2023
When it comes to starting a tech business, having a well-crafted tech business plan is crucial to attract investors and succeed in the competitive market landscape. A business plan outlines your company’s vision, strategy, and financial plan over time, giving potential investors insight into your business model and growth potential.
However, writing a tech startup business plan can be a daunting task, especially for new entrepreneurs that lack experience in the tech industry. In this article, we’ll provide you with a comprehensive guide on writing a tech startup business plan that will impress investors and help you succeed in the fast-paced tech startup world.
What is a Tech Startup Business Plan?
A tech startup business plan is a comprehensive document that outlines the goals, objectives, and strategies of a technology-based startup company. It is a crucial tool that helps entrepreneurs in the tech industry to define and organize their ideas, demonstrate the feasibility of their business concept, and present a clear plan for how they intend to build and grow their company.
Generally, most business plans typically include a summary of the company history, the problem it is solving, the target audience, competitive analysis, the marketing and sales strategy, the development strategy, and the financial plan. Also, such a document may include details about the management team, operations, and product development roadmap.
Particularly for the technology sector, the tech startup business plan also includes more specialized elements. Specifically, it is important to focus on the e-commerce technology trends being developed and how it addresses a gap or problem in the market while building such a document. This includes details such as the software or hardware being constructed, the technology stack being used, its technical architecture, and how it will improve or disrupt existing technology solutions.
Overall, a well-crafted business plan can help secure funding from potential investors or lenders, attract top talent, and ultimately guide the company toward success.
10 Core Questions to Answer When Conducting a Tech Startup Business Plan
For a tech startup business to build a good business plan, keep in your mind these questions and find the answers for yourself along the way. Answering these questions will help your startup team formulate a clear and compelling business plan/business idea, which can be used to guide the tech startup founder toward success.
1. Which product or service does your tech startup offer?
2. What is the team structure, and who are the key members?
3. Who is your target audience for the product or service?
4. Who are the competitors?
5. What are your competitive advantages?
6. What is your marketing strategy, and how do you leverage marketing channels?
7. What is your sales plan, and how do you leverage sales channels?
8. What is your financial plan, including projections for revenue, expenses, and funding needed?
9. What are the risks and challenges the business may face?
10. What is your timeline for product development, launch, and growth?
3 Reasons Why You Need a Technology Startup Business Plan
But why do businesses compose a tech startup business plan at the beginning of the software development process? There must be reasons. Check them out now!
Providing a Blueprint for Success
According to a Harvard Business Review study , startups that write a detailed business plan have a 16% chance to achieve viability than businesses that don’t. This metric proves the usefulness of this action.
By systematizing the business idea into a complete tech startup business plan, you give the business itself and each team member a clear picture of the company’s goals, vision, and strategies. While people are a prerequisite for an organization’s success, understanding the product’s direction will help each individual in the development team structure closely link together throughout the software development process and shorten product completion time.
Raising Capital from Investors
In the tech industry, startups often require significant amounts of capital to fund product development, hire staff, and invest in marketing and sales efforts. Raising such funds from investors is often necessary for startups’ future growth and success.
However, among the hundreds of thousands of startups out there, what sets your business apart from all of them? It is a specific technology startup business plan that is well-written to demonstrate.
Prospective investors and venture capitalists do not spend their money arbitrarily on poorly invested projects because, ultimately, they care about the return on investment (ROI). Investors are usually drawn to companies that understand their market and have a plan to tackle the market gap, and a well-curated business plan can make a tech startup stand out from the crowd.
Attract Top Talent
Suppose you don’t intend to use outsourced software development services to quickly build a development team of professionals and want to recruit developers for your startup yourself . A tech startup business plan can help in this situation.
A technology startup business plan can showcase the unique features of the business and its competitive advantage in a crowded market. Therefore, it can become a valuable tool for convincing top talent to join the team, especially if the company’s plans align with professionals’ aspirations and career goals.
7 Essential Elements to Write a Business Plan for Your Tech Startup
Your business idea can be good. But to easily realize it and stick to the outlined roadmap, you must present them in a systematic document. To do this, don’t skip the seven key elements to conduct a tech startup business plan below.
The executive summary is the most critical component of a tech startup business plan as it gives the reader a first-hand look at your product/service. An executive summary is a brief overview of your entire tech startup business plan, providing context for the reader and summarizing all the key points. It is usually the first section of the business plan and is customized to reflect the company’s goals, values, and unique selling points in a way that inspires the reader’s confidence in the startup.
An excellent executive summary in a software startup business plan typically includes the general situation of the target market or related industry based on conducted market research and an overview of the software solution you offer. Other information, such as unique value proposition (UVP), competitors in the same segment, and the company’s goal, can also be included in the executive summary as an optional option.
The advice is not to write the executive summary too long and vague, lacking focus on the main ideas. It is recommended to keep it within two pages to optimize visual efficiency and avoid boring the reader. Use the executive summary as an opportunity to showcase your tech startup’s strengths before diving into the details later on.
If the executive summary is the section that presents all the overview data about your product or service, the company description in a technology startup business plan is the part that gives the reader a clearer view of your entire tech startup, or what we call a company overview.
This section should provide a clear understanding of the business to potential partners or customers and inspire confidence in the startup . There are many primary elements that make up a complete company description. So, it will be hard if tech startup founders don’t start small. Draft fundamental ideas and gradually develop them into complete content until they meet all the needs of a business plan.
Here are some main elements to consider when writing a company description: tech company’s name, company history, business model, vision, mission, legal structure (whether it is a sole proprietorship, partnership, LLC, or corporation.), management team structure (each role and responsibilities) and competitive advantage.
Target Market Research
By doing target market research, a tech startup is able to figure out three key elements for a tech startup’s business plan. These are the total addressable market (TAM), technology market trends, target customer groups, and competitor analysis.
- The total addressable market (TAM) is the target market’s total size that helps assess potential future revenue streams and justify the business case.
- Market trends help tech startups stay up to date with market demand, ever-changing information technology, and changes in perspective customers’ behavior.
- Target audience gives tech startups a better understanding of their potential customers by gathering demographic, geographic, and behavior factors.
- The competitor analysis section of your business plan helps tech company in identifying their direct competitors and understand their own strengths and weaknesses to promote competitive advantage better.
Target market research not only benefits the startup company but also shows your investment and determination in the product or service.
It’s time to be more descriptive of the product or service your company offers rather than just general, like in the executive summary. Because the purpose of a startup business plan is generally still to introduce products to potential customers, this section should be written carefully and go into detail to demonstrate the product’s uniqueness and promising growth potentials.
Some elements to consider when writing a business plan include:
- Product or service explanation: This includes key features and benefits, how it works, and how it is different from other solutions in the market.
- Value proposition: Clearly stating how your product fulfills a customer need and backing it up with evidence.
- Product development: Providing a product development roadmap by outlining your timeline and steps to achieve further development goals.
The team structure is an essential part of a tech startup business plan. It gives investors and stakeholders insight into the management team’s ability to execute the business plan and the team’s capacity to bring the idea to fruition.
In this part of the business plan, it is vital to highlight the leadership team and their roles. Start by introducing your founders and executive team and describe their previous experience and expertise with a proven track record that makes them qualified to lead the company. For investors to easily visualize the development team of your startup business, using a graphic, such as an organizational chart, can help.
Next, outline the roles and responsibilities of each member of your team , including any advisors or board members. Remember to describe carefully how each team member will contribute and cooperate to the successful company and how their respective skill sets complement, and experience are relevant to the tech industry.
Goals and plans for the future of the leadership team and development team members can also be written in the business plan as a supplement. For example, you expect to expand your team within one year by hiring additional staff or bringing on new partners or investors. All must be written in a clear, concise, and focused manner.
Marketing and Sales Plan
A product or service with good quality is only part of it when marketing and sales plans are exactly the activities that bring users and profits to the company. The marketing and sales plan section of a tech startup business plan will serve as a critical component that outlines how your company plans to acquire and retain customers, generate revenue, and achieve sustainable growth.
Regarding the marketing strategy, since you have already defined the target audience in the target market research section of the business plan, you only need to briefly repeat this section to once again help investors develop a comprehensive understanding of your ideal customer and their buying behavior. Next, don’t forget to differentiate your product or service from competitors and effectively manage your marketing plan by describing your unique value proposition. Consider using social media advertising, SEO, content marketing, email marketing, and public relations as tactics to reach your audience and successfully execute a marketing plan.
After your marketing efforts, it’s time to build your business plan and a suitable sales strategy. The basic elements of sales strategies adopted by many startups include sales approach, pricing strategy, sales channels, and sales team structure, which provides a clear path for converting leads into paying customers.
To measure the success of your marketing and sales efforts, track progress, and make data-driven decisions, you should identify key performance indicators (KPIs) such as website traffic, conversion rates, customer acquisition cost, and revenue generated.
Running out of cash is one of the primary reasons why many businesses fail. Building a financial plan right from the start will make it easier to manage expenses and manage risks for your software solution. There is no fixed financial plan of the business plan as each startup has different business orientations and goals.
However, one of the most vital aspects of this section is the sales forecast, which details how your company plans to generate revenue, including the sales channels you will use, your pricing strategy, and your projected customer acquisition rate.
The cash flow statement and the balance sheet are also important elements in a basic financial plan. The balance sheet provides a snapshot of the company’s financial health and helps you make informed decisions about your operations and growth strategies. The cash flow statement identifies how much money you expect to have on hand each month, taking into account both revenue and expense forecasts.
As for business plans, there is no single startup business plan template that is a perfect fit for your project since there is no startup like any other in the technology market. Each startup has different characteristics and different product businesses. Some companies set up a business plan to raise capital for a banking product . Meanwhile, there are companies that are working on human resources software.
So, start a business plan from small things. Take note of all your ideas on paper and discuss them in turn with the development team is Orient Software ’s advice.
With years of experience in the field of information technology, Orient is confident of having the ability to advise you on all problematic aspects of the industry. Contact us for more details !
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Business plan for startup software company.
As an entrepreneur, you have to plan everything you do to succeed. Today, most entrepreneurs still ignore the significance of having a business plan before investing their money in any project. When you think of starting a software company, you cannot proceed without a well-written business plan.
This is important if you intend to compete favorably in the market. Note that a business should only enter a market to provide a solution to what most customers face or do not get from existing businesses. A well-structured business plan should outline the business mission , vision, objectives, and solutions.
When you look up to a software business, you need a concrete strategy and plan that will provide a foundation for your growth. This article highlights some of the essential tenets and parts of a business plan you should know. You will also learn why it’s necessary to have a business plan before you start your business.
Business Plan: What is it?
1. it can help in business growth, 2. helps you reach milestones, 3. helps you get funding for the business.
- 1. Executive Summary
- 2. Company Summary
- 3. Market Research
- 4. Product And Service Description
- 5. Operation And Management Structure
6. Sales And Marketing Plan
7. financial plan.
A software company business plan is a well-structured and written document that highlights the premise of your company, summarizing the financial objectives, goals, and all the details on how you intend to accomplish the goals and objectives of the business.
A business plan is simply a mirror of where you want your business to be in the coming years . It is a road map that explains what you want to do in the business and how you intend to do it. In most cases, a business plan will have the following parts:
- An executive summary
- Company description
- Market research
- Product and service description
- Operation and management structure
- Marketing plan
- Financial plan
Related: Best Startup Name Generators
Why A Software Company Needs A Business Plan
When starting a software business or company, you may be short of ideas. It is not easy to tell whether your business will grow or not if you don’t have a plan to do it. With a business plan, you have a definitive guide on how to go through every stage that your business will be facing.
You will use a business plan to structure, run, and grow the business. A business plan helps you think in detail about how your business will run and achieve its goals.
As you move forward, you will need a marking scheme to determine if you are making progress. A business plan helps you take a step back and think of the objectives you set at the start of your company.
This way, you can make the right decisions based on the goals of your business. A plan will guide you on whether you need a loan to finance your business or not.
If you are looking for ways to fund your software company, a business plan is one way to start. Most investors will ask to review your business plan if they intend to invest in your business.
With a business plan, you can easily convince partners and get funding from financial institutions.
Related: Best Startup Accounting Software
Tips For Writing A Business Plan For A Software And Tech Company
Now that you know why it’s essential to have a business plan for your company, we can dive into the critical elements of a well-written business plan.
1. Executive Summary
This section of a business plan is the most critical for any startup that intends to grow. When poorly written or structured, the business may lack purpose and direction.
In most cases, business plans fail in this section because they are not captivating to the readers.
In this section, the business plan should hook prospective investors, employees, and partners. Your target investor may not have the time to read the other sections of the plan. Therefore, when you create a captivating and detailed executive summary, you may just win the deal in this section.
Make the executive summary concise and more compelling to the reader. Put down some points on what makes your business unique from others in the industry. You should also clarify how the business will be offering solutions in the software industry and how you plan to beat the stiff competition.
An executive summary should have the following key components:
- Target market : Who is your target customer, or simply who will benefit from the product you are offering?
- Business model : What new product are you bringing to the market? How will this product make you some money?
- Business opportunity : Is there a gap in the market that you intend to fill up? Why do customers need the product you are offering?
- Marketing strategy : How will customers learn about the product you are offering?
- Competition : Who are your competitors? What are other companies competing for the market share?
- Goal and objectives : How will this product you are offering transform the marketplace?
In most cases, if you want to create a compelling and excellent executive summary, you should write it last. Start with the other sections of the business plan, create, and finish with the executive summary. This way, you will capture all the key points in the executive summary.
Related: Best Tools For Early-Stage Startups
2. Company Summary
A company summary or headline statement is another vital part of a business plan. When you create a perfect company summary, you can capture the imagination of your prospective investors and partners. The summary also serves as a lead to your business plan.
When your structure a company summary, you should focus on the following:
- Giving your readers a simple overview of what your company specializes in. What does your company do or offer?
- Explain and communicate the value your company products and services offer to customers.
- Highlight some of the opportunities your company has in the marketplace
Here is an example of a company summary
My Foot is a fashion and design business that sells men’s footwear and clothing to men who need quality and affordable shoes but doesn’t get it from local stores.
A business summary should state the company name, type of business, product or service offered, target customer, solution, and completion. Once you create a business plan, you can come up with an excellent company summary.
3. Market Research
Yes, you have a great business idea, but not everyone is likely to buy from it. Even with a good idea, you still need to research the market and determine if your idea is saleable; learn more about your competitors and customers.
When doing market research, you should:
- Identify target market : Your business is going nowhere if you don’t have a viable market for the product or service you are offering. You want to find out if the product or service you are offering is needed in the market. Get a sense of the Total Addressable Market (TAM) to determine the potential revenue your business is likely to generate.
- Segment your market : You can group your target customers according to their age group, gender, geographic location, and behavior.
- Competitor analysis : You should conduct a thorough competitor analysis to help you determine the key differentiations between your competition and your company. Some questions you can ask yourself: How to improve the existing products and solutions in the market, why people should choose your product, and why people are not buying the existing product.
When you think of the existing products and flaws in the market, you can easily identify opportunities for your business and start a business that offers ideal solutions to target customers.
Related: How Many Startups Fail Within 3 Years Of Launch (Read Stats)
4. Product And Service Description
When drafting your business plan, you should link what you are offering and what your customers are looking for in the market. This way you can easily prove that there are people who are willing and able to buy your product.
- Research existing problems in the marketplace : What problems are most customers facing? Are there solutions to these problems? Ask some of your potential customers about the problems they are facing in the market. Seek honest answers from your customers and come up with a problem. Do this research before coming up with a product.
- Custom the product to the existing problem : Once you have a list of problems, you can now trim it to focus on those related to your product. Explain to the customers how your product will offer solutions to the problems they are facing. For instance, if most people believe that the existing solutions are expensive, you can describe how you intend to come with an affordable product that offers the same quality.
Related: Best Tools For Startups
5. Operation And Management Structure
The fifth stage in creating a business plan for your company is delving into the human resource in your company. While investors will focus more on the idea of the business, they also want to invest in the team as much.
Your team should therefore consist of experts whose skills complement each other. For example, a tech or software company can have a programmer, a coder, a graphic designer, and sales professional. You should highlight the merits of each employee and the value they add to the business.
Lastly, you should create an organizational chart for your team and employees. It should define how your business will be organized. For a startup, it could just be you and the other partners that invest in your business.
When you create a graphic organizational chart, you simply visualize the kind of structure you want your business to have as it grows.
Sales and marketing is other elements you should include in your business plan. Outline some of the strategies you want to use in marketing and selling your products and services.
Sales channels are all the mediums that enable customers to purchase your products, while a market channel is what you intend to use in promoting your business. If you intend to use a direct sales channel like an e-commerce store, you should not hesitate to explain it in your business plan.
In the business plan, you should explain how you intend to attract customers and acquire leads. In most cases, you should focus on these activities;
- Develop and launch a website, if possible, an online store where customers can shop in the comfort of their homes.
- Have a strategy to drive traffic to the website from organic search and social media platforms.
- Come up with a PPC strategy that can aid in getting instant online exposure for essential products you are offering.
- Adopt email marketing by first building an email subscriber list.
You can choose a marketing strategy that will help you to nurture existing customers and make them loyal to your business. The marketing section for the business plan should account for factors like market risks, goals, and budget.
Related: Best Startup Podcasts
A complete business plan should highlight the company budget and sales goals. This is probably one of the most challenging parts of any business plan. It is not that easy drafting this section if you lack accounting and financial planning skills.
It is also challenging to create a financial plan if you don’t have a cash flow report, balance sheets, and stable income.
Your business plan should include all the details on how you will generate income, what costs you expect to incur in the future, significant expenses, salary demands, and financial milestones.
Most startups don’t make it to the second year of business for lack of a business plan. When you create a business plan, it should outline some of the challenges you expect to encounter in the industry and how you will cope with them.
An effective business plan should cover the seven key elements we have explained here. Always keep all the details in your business plan to the right perspective, research widely, and make your business plan concise and on-point. With these tips you should be ready to make that move – start your software company now.
Joydeep Bhattacharya is a digital marketing evangelist who has over 11 years of experience in online marketing. He helps businesses improve their revenue online. He is a regular contributor to SEMrush, Ahrefs, Search Engine Watch, Hubspot, Smart Insights, and several other publications.
- https://inoxoft.com/blog/7-steps-of-how-to-write-a-technology-startup-business-plan/ Steps of How to Write a Technology Startup Business Plan
Steps of How to Write a Technology Startup Business Plan
Why do Startups Need a Software Startup Business Plan?
7 steps on how to make a tech startup business plan, tip #1. start with a company description.
- Tip #2. Proceed with a tech startup business model
- Tip #3. State how are you going to get noticed on the market
- Tip #4. Consider the financial aspect of your business
- Tip #5. Think about your future business team
- Tip #6. Write an executive summary of your business plan
- Tip #7. Add anything you might consider valuable (appendix)
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If you decided to launch a startup, don’t forget to write its tech startup business plan first. Business planning is essential and crucial for a newly-created business concept. Having a preplanned strategy allows you to allocate and eliminate possible risks and get ahead of your competitors. Risks trigger other important factors such as time and budget resources. And, if you are just getting on the market, these resources might make you fall behind significantly.
According to Excellentbusinessplans.com , businesses have more than a 30% chance of growth due to writing a software startup business plan. So, this article will speak about how to create a startup business plan of great use to entrepreneurs. Build your tech startup as a pleasant journey with the exact 7 steps of business planning that will allow you to win the competition.
What is a technology startup business plan?
A tech business plan is a document that includes a detailed description of the startup’s objectives and the road to achieving goals. Usually, it’s a defined roadmap of marketing, financial, and operational procedures. – Investopedia
So, the need to write an IT startup business plan lies in the fact that any business can have a fully-described insight into its future operations.
For example, a tech startup business plan template has to include the following data:
- an executive summary, which is the mission statement, and information about the leadership, startup employees, and its location;
- products/services offered, where everything a business wants to do should be enlisted. I.e. a startup wants to create AI technologies, so it mentions what type of technologies, their cost, lifespan, and potential benefits to the end-users. And, also, research and development information about the product/services is always welcome;
- particular market analysis, where businesses can analyze the potential need of their product/service as well as the direct competition. This information will allow us to build a startup based on innovation, and strengths and eliminate weaknesses if possible;
- a marketing strategy, which can inform on the potential ways the business will use to attract end-users and how the company will reach them. Perhaps, advertising or marketing campaigns are needed? Social media to speak about the product/service? Any channel that will help more customers get engaged will do, but you still have to define it first;
- financial planning, which is composed of the potential targets and estimates for a couple of years ahead. With financial plans, you can attract the much-needed investors and prove to them your startup is going to make it with the concrete yearly estimations;
- a budget, where you should mention the costs to develop and design software, staffing, marketing campaigns, office, and extra spending. Having defined what you need costs for allows you to operate these costs in a more efficient way;
- a team that will work for you, share your goals and ideas, and lead your startup to success.
To ensure all these important fields were covered, let’s discuss how to write a tech startup business plan in several steps. This process should not be neglected and taken for granted for if you fail to provide a consistent tech company business plan, then you’ll appear among the 50% of startups that couldn’t make it further.
Writing a business plan for a tech startup isn’t a one-day process. It is a commitment you should engage in at least for some time. But where should you start? There are the following sections to think about: technical plan, executive plan, marketing plan, financial plan, staffing plan, etc. But, we’re here to help you out with the technology startup business plan template.
The company description will surely include the company history, its location, type of business (industry, sector) it provides. Also, it will mention the leadership team, employees and management team, and company missions and principles.
What would this kind of information technology startup business plan detail do for your business? It’s easy. Anyone interested in your startup will achieve a complete understanding of who you are and what are you going to offer to the end-users. In the other words, you have to have a unique identity that is both informative and catchy.
Everything you need to know about digital product development phases !
Launching your startup you have probably had the thought of where it might lead you. But, this thought has to be put on the official paper as well. You need to define your business’ scaling strategy and business opportunities. So, mention how are you planning to grow and what should be the numbers. Include financial aspects, employees, technologies, and, basically, everything, that will be enhanced and should be doubled in the process.
The only way you can let everyone know about your business is to lead the right marketing campaign. Here, you should analyze your target audience, conduct surveys, analyze competitors, and create a user persona. On analyzing competitors use the SWOT model . In creating your potential buyer persona, make sure you have included all the valuable information.
Financially, it is vital to know beforehand what costs you will need to invest and what revenue you will achieve. So, while creating a business plan for a startup, the section with money requires additional effort. Here, you might need to include: a balance sheet, expense projection, income projection, cash flow projection, monetization strategy, other pricing, and a business sales plan.
What has to be done in the first place? Financial planning should ground in business planning. It should be a clear and realistic presentation. And, most importantly, use templates to make this process a bit easier for you.
The leadership team is partners that should consist of the CEO – Chief Executive Officer, who will be responsible for the main processes in the company. Then, the startup should have a CTO – Chief Technology Officer, who is responsible for research and implementation, and the technological part. Also, there is a need for CMO – the Chief marketing officer, who is the one to involve potential customers and make them pleased with the product/service. Last but not least is the CSM – Chief Sales Officer, who closes the deals with potential clients and sells your product/service.
Need a skilled CTO? How to find a CTO for your startup? – click and have a look!
Among the leaders, you should think about the management team – project managers, developers, designers, testers, and other employees per your business need. Scalability is a must if you opt to grow further.
Inoxoft offers some tips on how to hire developers for startup !
Executive summary of a business plan for a software startup should be written last as it will summarise everything that you have defined and described before. It is of a certain structure, which makes it easier to read. With its help, you will catch the much-needed attention of a reader, and show him/her the real fact and the exit strategy. Avoid unnecessary wording and passionate over-positive thinking here. Be realistic, and show you can provide reasoning and decision-making. Be innovative.
The appendix section usually includes every additional fact or infographic that was mentioned in the business plan for a tech startup. So, these might be charts, tables, illustrations, patents, trademark documents, credit history, additional documents, market analysis, production plans, and operations planning. Basically, all the features your stakeholders might be interested in.
Inoxoft is an international software service provider with more than 7 years on the market. We help startups achieve excellence with their products/services and succeed. Explore our software development for startup services and benefit from the quality end results!
Inoxoft finds business planning for tech startups one of the most needed steps in setting the right priorities. We engage in writing a startup business plan and may give valuable insights as to your solutions.
If you still don’t know how to make a tech startup business plan or need a consultation on your startup project idea – book a call with us and receive a free consultation!
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This article has summarized how to make a business plan for a startup. If you are just launching and think that planning ahead is something you should skip – that’s wrong. Consider 7 tips provided by Inoxoft and become a profitable unicorn one day!
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Frequently Asked Questions
What is a software startup business plan.
A tech business plan is a document that includes a detailed description of the startup’s objectives and the road to achieving goals.
What to include in the business plan for tech startup?
- an executive summary
- products/services offered
- particular market analysis
- a marketing strategy
- financial planning
What are the tips for writing a startup business plan?
- Tip #1. Start with company description
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7 steps to create a technology startup business plan.
- Published on: April 26, 2022
- Author: masschallenge
Many entrepreneurs still overlook the importance of a technology startup business plan. In a space as competitive as the tech industry, a lack of preparation will surely pave the way to disappointment.
Instead of diving in without any concrete strategy, a plan provides a foundation for sustainable business growth.
In this article, we’ll explore the essential elements of a tech startup business plan, and provide the insights you need to create a plan for success.
What Is A Business Plan?
A tech startup business plan is a document that details the premise of your technology business, summarizing vital financial objectives and operational goals, as well as details on how you will accomplish these goals.
It’s a road map that describes what you intend to do, and how you intend to do it.
A typical business plan will comprise the following seven elements:
- Executive Summary
- Company Description
- Description of Products and/or Services
- Management & Operational Structure
- Marketing Plan
- Financial Plan
3 Reasons You Need a Business Plan
Before we dive into the individual aspects of a startup business plan, let’s first consider why you need one.
Just what are the benefits of a business plan?
1. It Offers Greater Clarity
Having a business plan will give you a much better understanding of your business and the objectives you are trying to achieve. Even the most basic technology startup business plan example will seek to define your goals in more objective terms.
For example, you can set specific targets for website traffic, sales volumes, or profit margins. This makes it easier to track and measure success and aligns your decision-making with sales and marketing initiatives.
2. It Increases the Chances of Success
A report from the Harvard Business Review found that companies with a business plan are 16% more likely to succeed.
Furthermore, companies that have a business plan also enjoy higher growth rates than companies without a plan.
3. You Are More Likely to Get Investment
Angel investors and venture capitalists aren’t in the habit of making bad bets. When they part with large sums of money, it’s a carefully considered decision they base on the likelihood of earning a positive return on investment (ROI). When you have a business plan, you give your startup strategic focus, which helps you create an identity that is built to succeed. This makes for a more attractive prospect in the eyes of investors, so it’s easier to raise capital for your startup when you have a plan.
How to Write a Business Plan for Your Tech Startup (7-Steps)
So, now that you understand the motivation behind creating a tech startup business plan, it’s time to see how it’s done. By including the seven elements below, you’ll have a plan that gives your company a much stronger footing.
1. Executive Summary
The executive summary is, without a doubt, the most critical element of your tech startup business plan. Despite this, a lot of plans fail here because the summary doesn’t captivate readers. If you can’t hook prospective investors, partners, or employees with your executive summary, they may never read the rest of your business plan.
Source: The Balance
This section should be compelling yet concise, giving people enough to understand what makes your startup unique, and how it will be able to offer solutions in an existing, competitive market.
While you want to keep it brief, there is a lot to pack into this opening section of your business plan. Here are the crucial components of an executive summary:
- Business Model – What is your product or service? How will you make money?
- Target Market – Who will benefit from this product or service?
- Business Opportunity – Why do consumers need your product or service?
- Marketing Strategy – How will these consumers learn more about your product or service?
- Competition – What other companies are competing for market share?
- Goals – How will your startup transform the marketplace with this product or service?
As the executive summary is such a vital aspect, it’s a smart move to write it last. By waiting until you have finished the rest of the business plan, you can draw from the other sections to craft an excellent executive summary.
2. Company Summary
The company summary essentially boils down to a single sentence, otherwise known as a headline statement. When it’s done right, this summary can be the perfect elevator pitch to capture the imagination of would-be financial backers or partners, and it will serve as a natural lead-in to your more detailed business plan.
Source: Gusto (credit: LivePlan)
The company summary or headline statement should do the following:
- Give people a brief overview of what your company does.
- Communicate the value you offer.
- Highlight the opportunity in the market.
Here is a good template to create your company summary:
<Your company> is a <type of business> who sells <product or service> to <target customer> , who needs <solution> , but doesn’t get it from <competition> .
Don’t worry if you can’t create the perfect summary now. When you develop your business plan, you will get a better understanding of what this headline statement should be, and then you can refine it to reflect your vision and value proposition.
We’re sure you have a great idea, but that’s no guarantee that everyone is going to love it as much as you do. No matter how good you think your startup may be, you still need to conduct proper market research to learn more about your ideal customers and competitors.
Identify your Target Market
Without a viable market for your product or service, your business is doomed.
Many startups have failed quickly because the owners were so obsessed with their own product that they were effectively blind to the fact that nobody else cared about it.
Source: CB Insights Image: Cleveroad
Initially, you can adopt a broad scope to get a sense of your total addressable market (TAM), which is the potential revenue opportunity your new product or service could generate. Of course, with the competition, and changing consumer interests, it’s unlikely you will dominate the entire TAM.
Once you have this broad idea, you can hone your sights to go more niche. While this presents a smaller audience, it is more effective. By narrowing your targeting, you can market to a more engaged audience that will be more receptive and likely to purchase your product or service.
Consider the following factors when segmenting your audience:
- Demographic – What age group? What gender?
- Geographic – In what country or city do your prospects live?
- Behavior – What websites/blogs/news sources do they use? What are their purchasing habits? What retail sites or brands do they buy from?
With in-depth data analysis and evaluation of your prospective customers, you can create detailed buyer personas that help you refine your marketing strategies.
Perform Competitor Analysis
During the market research stage of your tech startup business plan, you should also carry out a thorough competitor analysis.
This will help you determine the key differentiators between your company and the competition.
Ask yourself these questions:
- Why should people choose my product or service?
- How can I improve on the existing solutions in the market?
- Why do people not already buy the products in the market?
By thinking about current trends or flaws in existing products, you can identify opportunities for innovation so that your business can connect with customers on a deeper level.
Knowing your audience is crucial, and therefore, your business plan must demonstrate a deep understanding of your target market, and your competitors.
3. Description of Products and/or Services
Here, you must highlight the link between what you are offering, and what people need, so you can prove that people are ready and willing to pay for your product or service.
Research Problems in Market
It helps to conduct some face-to-face research, asking potential customers about the problems they have. Don’t try to usher the conversation in any direction or shoehorn their answers to fit your product – instead, look to learn from their honest responses about the solutions they need.
You should do this research before creating the product. After all, it makes more sense to create a product for an existing problem, instead of trying to find a problem for your product.
Tailor Product to Problems
After doing your research on the existing problems in the market, trim your list to focus on a few of the most important issues. Describe how your product or service will be the ultimate solution to these problems.
For instance, if people believe the existing solutions are too expensive, you can offer a product with a more attractive price point.
By matching up consumer problems with specific solutions, you can develop a product or service that has a more significant value proposition.
4. Management & Operational Structure
The next stage of the traditional technology startup business plan template delves into the people that make up your company. You must highlight the strengths and experience of your existing team, as new partners effectively invest their money in the team as much as the business idea.
Ideally, your team will consist of several experts whose respective skill-sets complement one another. For example, your tech startup may have a coder, a graphic designer, an inbound marketing expert, and a sales professional. Discuss the merits of each team member to convey the value they add to the business.
You can also speculate about prospective new hires and the key attributes you will seek in future team members. If you haven’t already got a chief financial officer (CFO), it’s a smart move to mention adding one soon. This will add backbone to your business plan by reassuring people that you have good financial sense.
Here, your plan should clearly define the organizational structure of your startup. For now, it may just be you and a couple of business partners.
However, by including a graphic that visualizes the structure you intend to build, people will get a clear understanding of the distribution of power and chain of command.
For example, it may look something like this:
Having a hierarchy prepared before starting helps prevent any debates about who is in charge of each department, and makes it easier to understand who reports to who.
5. Marketing and Sales plan
No tech startup business plan would be complete without mentioning the marketing and sales strategies you intend to use.
To clarify the difference, marketing channels are used to promote your business, and its products or services, whereas sales channels are the mediums that enable people to purchase those products or services.
You may only have one direct sales channel to begin with, such as an online e-commerce store. Make sure you explain it in your business plan.
In this section, you must detail how you will acquire leads and customers.
At the base level, you should do the following:
- Launch a company website
- Develop strategy to get organic traffic (i.e. visitors from search engines like Google)
- Develop a PPC strategy to get immediate online exposure for your most important product/service keywords
- Develop channel partnerships
- Build an email subscriber list
Over time, you can use marketing to nurture stronger customer relationships, which in turn, help you build an audience of loyal followers that will, hopefully, become customers.
The marketing section of your business plan will need to account for several factors, including your goals, risks in the market, and your budget. Which brings us to the final aspect of your tech startup business plan.
6. Financial Plan
Lastly, any good business plan must include pertinent details about your company budget and sales goals.
This can be daunting for many new entrepreneurs and is all the more challenging when you have no balance sheets, cash flow reports, or even any stable income on which to base your projections.
That being said, it’s still possible to make educated projections – so long as you have done solid market research.
When it comes to financial matters, your business plan should include details about:
- Revenue streams – how will the company generate income?
- Major expenses – What high costs do you anticipate in the year ahead?
- Salary demands – Are you still bootstrapping or are you and the partners taking a salary? If so, how much?
- Financial milestones – Detail your expansion strategy by considering future hires or store openings that will impact the books.
Many startups aren’t profitable in the first year. Your financial projections should maintain a long-term view for success, keeping ambitions realistic and honest. That way, you’ll be able to produce a more accurate break-even analysis .
With these long-term projections, you must consider the financial impact of expanding. You may be making more money in Year 3, but opening a new store will set you back.
Keep everything in perspective and make sure you don’t set yourself or your investors up for any nasty shocks down the road.
5 Tech Startup Business Plan Templates
When you have all the elements above in place, your business plan will be in good shape. However, presentation matters. If you want to make the best first impression, getting creative with your technology startup business plan template can make a big difference.
Not only will your research and expertise shine through, but you will have a visually stunning presentation that catches the eye of investors.
Here are five tech business plan examples to inspire you.
Business Plan Infographic PowerPoint
This plan allows you to present in-depth market analysis, statistics, and projections in a professional visual infographic. With several hundred editable slide options, it’s well worth the $16 fee for the license.
Emaze Business Planning With Analytics
This is more than the average technology startup business plan template. Emaze has a diverse array of creative collaboration tools, making it easy and enjoyable for teams to create unique plans together from any of the built-in templates. Furthermore, you can incorporate analytics, which is perfect for impressing investors. That said, $19 per month for the premium version may seem a little steep for some small businesses.
Lean Canvas 1-Page Business Plan
A tech startup business plan doesn’t need to take weeks to create. In fact, with this template, you can have a basic – yet brilliant – business plan all together on a single page in just 20 minutes.
Source: Lean Stack
For $15, you can access the full array of colorful slides in this presentation, which are all customizable to your needs. This template includes many ready-made aspects of the typical business plan, such as SWOT analysis, competitor analysis, and project timelines.
This is another user-friendly tool for creating short business plans. You enter the information, and then LivePlan will generate a one-page plan in an infographic style.
Make Your Tech Startup Business Plan a Priority
It’s not enough to have a great startup idea.
If you want to stand out from the pack, secure investment, and build a successful company that can earn real profits, growth, and customer loyalty, then you absolutely must have a solid tech startup business plan.
It’s time to create yours.
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How to write a business plan for a software development company?
Creating a business plan for a software development company is an essential process for any entrepreneur. It serves as a roadmap that outlines the necessary steps to be taken to start or grow the business, the resources required, and the anticipated financial outcomes. It should be crafted with method and confidence.
This guide is designed to provide you with the tools and knowledge necessary for creating a software development company business plan, covering why it is so important both when starting up and running an established business, what should be included in your plan, how it should be structured, what tools should be used to save time and avoid errors, and other helpful tips.
We have a lot to cover, so let's get to it!
In this guide:
Why write a business plan for a software development company?
- What information is needed to create a business plan for a software development company?
- What goes in the financial forecast for a software development company?
- What goes in the written part of a software development company business plan?
- What tool can I use to write my software development company business plan?
Having a clear understanding of why you want to write a business plan for your software development company will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a software development company business plan.
To have a clear roadmap to grow the business
Small businesses rarely experience a constant and predictable environment. Economic cycles go up and down, while the business landscape is mutating constantly with new regulations, technologies, competitors, and consumer behaviours emerging when we least expect it.
In this dynamic context, it's essential to have a clear roadmap for your software development company. Otherwise, you are navigating in the dark which is dangerous given that - as a business owner - your capital is at risk.
That's why crafting a well-thought-out business plan is crucial to ensure the long-term success and sustainability of your venture.
To create an effective business plan, you'll need to take a step-by-step approach. First, you'll have to assess your current position (if you're already in business), and then identify where you'd like your software development company to be in the next three to five years.
Once you have a clear destination for your software development company, you'll focus on three key areas:
- Resources: you'll determine the human, equipment, and capital resources needed to reach your goals successfully.
- Speed: you'll establish the optimal pace at which your business needs to grow if it is to meet its objectives within the desired timeframe.
- Risks: you'll identify and address potential risks you might encounter along the way.
By going through this process regularly, you'll be able to make informed decisions about resource allocation, paving the way for the long-term success of your business.
To get visibility on future cash flows
If your small software development company runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your software development company's future cash flows.
So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.
The good news is that your software development company business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.
To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.
By diligently monitoring your software development company's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.
To secure financing
A detailed business plan becomes a crucial tool when seeking financing from banks or investors for your software development company.
Investing and lending to small businesses are very risky activities given how fragile they are. Therefore, financiers have to take extra precautions before putting their capital at risk.
At a minimum, financiers will want to ensure that you have a clear roadmap and a solid understanding of your future cash flows (like we just explained above). But they will also want to ensure that your business plan fits the risk/reward profile they seek.
This will off-course vary from bank to bank and investor to investor, but as a rule of thumb. Banks will want to see a conservative financial management style (low risk), and they will use the information in your business plan to assess your borrowing capacity — the level of debt they think your business can comfortably handle — and your ability to repay the loan. This evaluation will determine whether they'll provide credit to your software development company and the terms of the agreement.
Whereas investors will carefully analyze your business plan to gauge the potential return on their investment. Their focus lies on evidence indicating your software development company's potential for high growth, profitability, and consistent cash flow generation over time.
Now that you recognize the importance of creating a business plan for your software development company, let's explore what information is required to create a compelling plan.
Information needed to create a business plan for a software development company
You need the right data in order to project sales, investments and costs accurately in the financial forecast of your software development company business plan.
Below, we'll cover three key pieces of information you should gather before drafting your business plan.
Carrying out market research for a software development company
As you consider writing your business plan for a software development company, conducting market research becomes a vital step to ensure accurate and realistic financial projections.
Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.
Through this research, you may uncover trends that could influence your software development company.
You may discover that there is a growing demand for software that can be used across different platforms and devices. This could indicate that consumers are looking for more versatile and cost-efficient solutions. Additionally, your research might reveal that there is a trend towards more automated software, suggesting that customers are looking for ways to streamline their processes.
Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.
By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your software development company.
Developing the sales and marketing plan for a software development company
As you embark on creating your software development company business plan, it is crucial to budget sales and marketing expenses beforehand.
A well-defined sales and marketing plan should include precise projections of the actions required to acquire and retain customers. It will also outline the necessary workforce to execute these initiatives and the budget required for promotions, advertising, and other marketing efforts.
This approach ensures that the appropriate amount of resources is allocated to these activities, aligning with the sales and growth objectives outlined in your business plan.
The staffing and equipment needs of a software development company
Whether you are at the beginning stages of your software development company or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.
To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.
A software development company might incur staffing costs such as hiring software developers, testers, and project managers. They might also incur costs for equipment such as computers, software licenses, and other development tools. Additionally, they might need to pay for office space, phone lines, and other associated costs.
To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.
Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your software development company.
What goes into your software development company's financial forecast?
The objective of the financial forecast of your software development company's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.
The four key outputs of a financial forecast for a software development company are:
- The profit and loss (P&L) statement ,
- The projected balance sheet ,
- The cash flow forecast ,
- And the sources and uses table .
Let's look at each of these in a bit more detail.
The projected P&L statement
The projected P&L statement for a software development company shows how much revenue and profits your business is expected to generate in the future.
Ideally, your software development company's P&L statement should show:
- Healthy growth - above inflation level
- Improving or stable profit margins
- Positive net profit
Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established software development company. And similarly, an established company should showcase a higher level of profitability than a new venture.
The projected balance sheet of your software development company
The balance sheet for a software development company is a financial document that provides a snapshot of your business’s financial health at a given point in time.
It shows three main components: assets, liabilities and equity:
- Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
- Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.
Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your software development company's liquidity and solvency:
- Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
- Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.
Looking at the balance sheet can also provide insights into your software development company's investment and financing policies.
In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).
The cash flow forecast
A projected cash flow statement for a software development company is used to show how much cash the business is generating or consuming.
The cash flow forecast is usually organized by nature to show three key metrics:
- The operating cash flow: do the core business activities generate or consume cash?
- The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
- The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?
As we discussed earlier, cash is king and keeping an eye on future cash flows an imperative for running a successful business. Therefore, you can expect the reader of your software development company business plan to pay close attention to your cash flow forecast.
Also, note that it is customary to provide both yearly and monthly cash flow forecasts in a business plan - so that the reader can analyze seasonal variation and ensure the software development company is appropriately funded.
The initial financing plan
The initial financing plan, also known as a sources and uses table, is a valuable resource to have in your business plan when starting your software development company as it reveals the origins of the money needed to establish the business (sources) and how it will be allocated (uses).
Having this table helps show what costs are involved in setting up your software development company, how risks are shared between founders, investors and lenders, and what the starting cash position will be. This cash position needs to be sufficient to sustain operations until the business reaches a break-even point.
Now that you have a clear understanding of what goes into the financial forecast of your software development company business plan, let's shift our focus to the written part of the plan.
The written part of a software development company business plan
The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.
Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.
The written part of a software development company business plan is composed of 7 main sections:
- The executive summary
- The presentation of the company
- The products and services
- The market analysis
- The strategy
- The operations
- The financial plan
Let's go through the content of each section in more detail!
1. The executive summary
In your software development company's business plan, the first section is the executive summary — a captivating overview of your plan that aims to pique the reader's interest and leave them eager to learn more about your business.
When crafting the executive summary, start with an introduction to your business, including its name, concept, location, how long it has been running, and what sets it apart. Briefly mention the products and services you plan to offer and your target customer profile.
Following that, provide an overview of the addressable market for your software development company, current trends, and potential growth opportunities.
Next, include a summary of key financial figures like projected revenues, profits, and cash flows.
Finally, in the "ask" section, detail any funding requirements you may have.
2. The presentation of the company
In your software development company business plan, the second section should focus on the structure and ownership, location, and management team of your company.
In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.
Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.
When describing the location of your software development company, you could emphasize its access to a highly educated and highly skilled talent pool. The company may be located in a region with an abundance of universities and businesses in the technology sector, providing a robust employment market for software developers. You might also point out the area's access to affordable office space, and its proximity to major transportation hubs, making it easy for third-party financiers to visit and stay connected to the company. Additionally, you could highlight the area's vibrant culture and desirable quality of life, making it an attractive place for employees to live and work.
Finally, you should introduce your management team. Describe each member's role, background, and experience.
Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.
3. The products and services section
The products and services section of your business plan should include a detailed description of what your company offers, who are the target customers, and what distribution channels are part of your go-to-market.
For example, your software development company might offer website design and development services, mobile application development and custom software development services to its customers. Website design and development services could help customers with creating an attractive, functional website. Mobile application development services could provide customers with the ability to design and develop mobile applications to reach their customers in new ways. Custom software development could help customers design and develop custom made software solutions for their specific needs. All of these products and services could help customers achieve their goals and stay competitive in their markets.
4. The market analysis
When presenting your market analysis in your software development company business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.
The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.
You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your software development company, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.
The target market section should follow and zoom on the customer segments your software development company is targeting, and explain how your products and services meet the specific needs of these customers.
For example, your target market might include businesses who need custom software solutions for their operations. These businesses can be of any size that have a need for the development company to create a specialized software solution that fits their specific needs. These businesses may need software that is tailored to their industry, such as an accounting firm needing an automated accounting system or a retail store needing a custom point of sale system.
Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.
Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your software development company.
5. The strategy section
When crafting the strategy section of your business plan for your software development company, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.
In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.
The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.
For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.
In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.
Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.
Your software development company could face the risk of running into technical difficulties that may delay project completion. These technical difficulties could arise from a lack of skilled personnel, insufficient resources, or unforeseen issues that occur during the development process. Your software development company might also face the risk of a security breach that could compromise confidential customer data. This could occur if the company doesn't have the proper security measures in place or if malicious actors are able to find vulnerabilities in the software.
6. The operations section
The operations of your software development company must be presented in detail in your business plan.
The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).
You should then state the operating hours of your software development company - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.
The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.
Your software development company may have a number of key assets and IP. These could include proprietary software code and hardware designs. For example, your company might have developed unique software algorithms that are protected by copyrights or patents. It could also have hardware designs that are protected by trade secrets or trademarks. These assets and IP could be vital in helping the company maintain its competitive edge.
Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).
7. The presentation of the financial plan
The financial plan section is where we will include the financial forecast we talked about earlier in this guide.
Now that you have a clear idea of the content of a software development company business plan, let's look at some of the tools you can use to create yours.
What tool should I use to write my software development company's business plan?
In this section, we will be reviewing the two main solutions for creating a software development company business plan:
- Using specialized online business plan software,
- Outsourcing the plan to the business plan writer.
Using an online business plan software for your software development company's business plan
Using online business planning software is the most efficient and modern way to write a software development company business plan.
There are several advantages to using specialized software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .
Hiring a business plan writer to write your software development company's business plan
Outsourcing your software development company business plan to a business plan writer can also be a viable option.
Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.
However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.
From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).
You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.
The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.
For these reasons, outsourcing the software development company business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.
Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.
Why not create your software development company's business plan using Word or Excel?
Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a software development company business plan is not advisable. Allow me to explain the reasons.
Firstly, creating an accurate and error-free financial forecast on Excel or any spreadsheet demands technical expertise in accounting principles and financial modelling. Without a degree in finance and accounting and significant financial modelling experience, it's unlikely that the reader will fully trust your numbers.
Secondly, relying on spreadsheets is inefficient. While it may have been the go-to option in the past, technology has evolved, and software now performs such tasks much faster and more accurately.
The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.
And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Moreover, software offers ease in comparing actuals versus forecasts and maintaining up-to-date forecasts for clear visibility on future cash flows, as we discussed earlier in this guide. Such tasks are cumbersome when using spreadsheets.
Now, let's address the written part of your software development company business plan. While it may be less prone to errors, using software can significantly boost productivity. Word processors lack instructions and examples for each section of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they lack automated formatting capabilities.
In summary, while some entrepreneurs may consider Word or Excel for their business plan, it's far from the best or most efficient solution when compared to specialized software.
- A business plan has 2 complementary parts: a financial forecast showcasing the expected growth, profits and cash flows of the business; and a written part which provides the context needed to judge if the forecast is realistic and relevant.
- Having an up-to-date business plan is the only way to keep visibility on your software development company's future cash flows.
- Using business plan software is the modern way of writing and maintaining business plans.
We hope that this practical guide gave you insights on how to write the business plan for your software development company. Do not hesitate to get in touch with our team if you still have questions.
Also on The Business Plan Shop
- In-depth business plan structure
- Key steps to write a business plan?
- Free business plan template
Know someone who owns or wants to start a software development company? Share this article with them!
Founder & CEO at The Business Plan Shop Ltd
Guillaume Le Brouster is a seasoned entrepreneur and financier.
Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.
Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.
Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.
Published on 12 Sep 2023 , last update on 24 Nov 2023 , as per our editorial standards .
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Software Development Business Plan [Sample Template]
By: Author Tony Martins Ajaero
Home » Business ideas » Technology Industry » Software & App Development Business
Are you about starting a software development company? If YES, here is a complete sample software development business plan template & feasibility report you can use for FREE .
A software development company is where software is not only developed but distributed for different purposes such as instructional, learning, calculation, entertainment, and assessment purposes. Before one can start a software company, there are basic things that one needs such as a knowledge of programming, technical support skills, the necessary experience at managing a company and funds.
However, before starting a software development business, it would be best to conduct a thorough market research of the industry
A Sample Software Development Business Plan Template
1. industry overview.
The software development industry has grown in the space of a century from an almost on-existent industry to one that is not only a billion dollar industry but an indispensable one, especially as software form the basis of modern gadgets and devices.
Between 2011 and 2016, this industry has been dynamic in growth, especially as there has been increasing demand from businesses and consumers, with more people spending their discretionary income on products such as video games.
The industry is being said to generate $205 billion and has a projected annual income of 3% from 2011 to 2016. There are more than 8,500 software development businesses in the united states of America that employs more than 455,000 people.
Globally as at 2013, according to Gartner, the software revenue was $407.3 billion which was a 4.8% increase from the #388.5 billion registered in 2012. The industry according to Forrester was projected to be the fastest growing in 2014 with a growth pegged at 7.1%.
The software development industry has room for growth as there is considerable demand in this industry with more businesses adopting software programs that will allow for improved efficiency and lower operating costs; this was so as to look for ways to not be affected by the economic downturn.
Cloud computing capabilities have created several advances for companies who have realized the positive effect of virtual offices and the savings implications for the company. This technology has helped companies to not only reduce overhead but increase productivity as well.
Another plus for companies are virtualizations which not only allow them to eliminate several server farms but has made IT infrastructure more economical and flexible while slashing operating costs.
There are moderate barriers for new businesses that wish to enter this industry; however, certain product segments have a higher barrier than others. One common thing in this industry is patents which serve as a means of limiting competition, even though some companies willingly license their patented technology.
2. Executive Summary
Doodle Tech Inc. is a leading software development business that is based in Market Street, Suite 800, San Francisco – California, USA. We are in business to develop software for general purposes and for specific purposes to our various clients. We have in place training services and we also offer technical support in line with our business.
Our location is very strategic in the sense that we are close to manufacturing firms as well as technology giants and other big businesses here in California that will ensure that we have an edge over other software companies in other parts of California.
We are in business to not only make profit but to also compete favorably against other software development companies in the industry and attain our vision of being the preferred software development company for clients all over the United States of America.
We intend to ensure that we demonstrate fair business ethics in every point of our business. We hold ourselves accountable for our high standards and ensure that all our employees are not only attuned to but display this standards at all times in order to positively promote the company.
As a result of this, we are willing to go the extra mile by putting in structures, processes and planes in place to ensure that we get the best professionals who not only have the expertise but are also competent and know how to take our company from where we are to where we intend to be.
Our employees have welfare packages that are currently amongst the best in the whole industry amongst similar startups such as ours. We have also provided a conducive environment for all our employees in order to ensure that they remain productive at all times in order to improve the bottom line of the company.
We offer excellent customer services that have been known to retain a high number of our clients. All our customer service executives have been trained to know how to respond to customers and are also updated as regards the industry trends in order to ensure that reliable information is passed to our clients.
Finally, the expertise of both our owners, Jack Taylor and Christopher Warden in software development and business management is a great plus as both are not only Harvard graduates but also have more than 30 years of combined experience that will ensure that Doodle Tech Inc. attains its goals and objectives in time.
3. Our Products and Services
Doodle Tech Inc. intends to deal in several services whilst also generating revenue that would boost our bottom line tremendously. These several services will be added to our core service and should keep us favorably disposed to compete against our competitors.
We however intend to ensure that all our multiple sources of income which include training and technical support are in line with what is obtainable in the industry and accordingly to the laws of the United States of America. Therefore some of the services and products we will engage in are;
- Developing of software according to clients’ specifications
- Sale of software
- Offering of subscriptions for our software
- Charging of license fees for our software
- Charging by transaction
- Advertisements on our software
- Training services
- Technical support
4. Our Mission and Vision Statement
- Our vision at Doodle Tech Inc. is to be distinct from other software development companies by creating software that suits the diverse needs of our end users, and to be the preferred software firm for users in the United States of America.
- In order to achieve our vision, we have on hand the best software developers that will ensure that we attain our goal of being the preferred software company and in meeting all the diverse software needs of our customers here in the United States of America.
Our Business Structure
We know how important it is to have the right business structure for our software development company as getting it right from the start will eliminate most hitches that will crop up relating to our structure during the course of running the business. For this purpose, we intend to hire only competent and professionals in the available positions in our company.
Due also to the fact that we intend to run a wide range of services, we intend to ensure that we employ those that are capable of filling in these different positions. All our employees are those who understand the industry well and who are attuned with our vision and are committed to ensuring that we attain these goals and objectives.
We are also prepared to ensure that our workers are well paid and have welfare packages that are the best in similar categories across start-ups such as ours in the industry. We will also ensure that the working environment is not only conducive but is one that will enhance their skills and make them more productive.
Below is the intended business structure for Doodle Tech Inc.;
Chief Executive Officer
Software Development Manager
Business Development Manager
Human Resources and Admin Manager
Customer Service Executives
5. Job Roles and Responsibilities
- Develop overall policies that would provide the right direction for the company
- Ensures that strategies are implemented and weak strategies are removed
- Meets and negotiate with high powered clients on behalf of the company
- Ensures that new software is developed and tested for bugs before being released to the public
- Develops new software for existing software so that clients can upgrade without running into hitches
- Carries out constant tests on software released to find out weak points and work on it.
- Researches on new businesses that will generate more revenue for the company
- Reviews company’s current products and services and decides how to make them better
- Works with the software development manager to give feedback on what the market trends are
- Prepares the budget on behalf of the firm and liaises with the owners to ensure that budget is reviewed and correctly implemented
- Prepares all the financial information and statement on behalf of the firm
- Ensures that tax is prepared and filed correctly to the correct authorities
- Ensures that the company’s books balances with that of the bank at the end of every month and accounting period
- Ensures that the right employees are recruited on behalf of the company
- Carries out orientation and ensures that employees are assigned the right tasks for their responsibilities
- Ensures that all the administrative functions of the company are performed smoothly without any hitches
- Ensures that all customers enquiries as well as complaints are well attended to and promptly resolved
- Keeps an accurate customer database on behalf of the company and ensures that it is regularly updated
- Carries out other duties as determined by the human resources and admin manager
- Conducts a marketing research on the software development industry to identify new markets for Doodle Tech Inc.
- Drafts strategies and reviews weak strategies to ensure that ineffective ones are removed
- Conducts direct marketing on behalf of the firm
- Meets and negotiates with high level clients on behalf of the firm
- Ensures that the premises and all the properties are secured after work hours by conducting patrols
- Monitors the surveillance cameras in line with securing people and property of Doodle Tech Inc.
- Keeps updated about the security information in the locality and pass along important security tips to staff
- Ensures that the premises is kept clean before work resumes
- Keeps the staff and guest conveniences clean at all times
- Ensures that cleaning supplies are always in stock
- Carries out any other duties as directed by the admin manager
6. SWOT Analysis
In order to determine if we were engaging in the right concept for our business, we hired the services of brand consultants who were not only reputable but the best here in San Francisco – California to let us know if it was worthwhile going into the business now.
The business consultants took a deep look at our strengths, weaknesses, opportunities and threats to allow the know what we were likely to face starting and running our business here in San Francisco – California, and in the United States of America as a whole. The results of the SWOT analysis that was conducted on our behalf are as follows;
Our strengths are numerous and lie in the fact that we have the right business structure that will ensure that we conquer this industry. Our software developers are the best there is and have the expertise and experience to enable us attain our goals and objectives.
We are also involved in ensuring that our software pass through quality process, reason we have external testers who run several tests on any of our software before it is released. Finally, our owners have the necessary experience that would make our being at the top a piece of cake, as both have more than 30 years experience in the software industry both as developers and in managerial positions.
There are few weaknesses that we identified for Doodle Tech Inc. and they include the fact that we were going to develop software that were not really different from what our competitors were offering. Also, there is the other fact that we are located in an area where there are other software companies, making our location a bit saturated.
We are however confident that we would be able to battle whatever weaknesses might crop up during the course of running or starting the business.
There are so many opportunities available to us as there are new market segments that we have identified which would likely generate money for us. There are so many strategic alliances which we would engage in so as to have a foot into other target markets and generate more revenue for our bottom line.
We also have the opportunity of moving into the international market as our software is such that has no boundary limits. Finally, we would fully tap into the internet in order to promote and increase awareness for our brand.
Threats are external factors that cannot be controlled by a business; however any serious business should not only be prepared for threats but also have ways by which these threats will not be allowed to totally affect the business.
Some of the threats we would likely face at Doodle Tech Inc. are; the arrival of a new competitor into our location, engaging in price wars with competitors, dealing with government policies that might have an effect on our industry. We are fully prepared for any threats we are likely to face, as we have strategies on ground to battle such threats.
7. MARKET ANALYSIS
- Market Trends
The trend in the software industry is that most software firms or companies are located in clusters in identifiable locations.
This is due to certain facts such as these companies wanting to be close for competitive and industry purposes and also most software companies depend on one another to be able to carry out certain functions or complete certain specific tasks for clients.
This does not however mean that there aren’t software companies in other locations or that software companies in these other locations can’t still get jobs done. To however remain relevant, software companies must always remain innovative and unique in their offerings and services. Another trend with software companies is in its publicity and promotion activities.
To be able to attract the much needed awareness and also attract clients that would pay money for the firms’ products, software companies have engaged in strong promotional activities either by hiring brand consultants or getting an in-house team or deploying both methods to draft the strategies that would enable it be recognized in the industry. Intense promotional activities will also help in getting a huge share of the market.
Lastly, software cannot work without any device and so goes hand in hand with new or existing technology; which is why most software companies try to partner with technology firms so as to create new software or upgrade existing software for these firms.
This goes to show that software industry is dependent on the technology and manufacturing industry in order to survive or thrive.
8. Our Target Market
Almost everyone makes use of software and have either bought directly from the developers or indirectly via owning a device. This means that the target market for any software development company is wide. We however have mapped out a strategy that would allow us gain a vital share of the target market.
One of our first strategies is in conducting a thorough market research that would enable us understand the market we are to go into and know what they expect from us and what our obligations are towards them. The result of the market research of the market research showed that we were in business to develop software or offer other kinds of related services to the following people;
- Corporate organizations
- entertainment industry
- Educational institutions
- Accounting firms
- Financial institutions
- Small businesses
- Agricultural sector
- Military and defense sector
- Other software companies
Our competitive advantage
Just like any other business that is established to make profit, we hope to be able to compete favorably against our competitors in the same industry.
Our vision is to be the preferred software development company for our clients all over the United States of America and to achieve this, we intend to come up with competitive strategies that would enable us attain our goals and objectives.
We intend to ensure that the software developed for general purposes will come in different categories that will be convenient for all our users.
We have assembled a high team of software developers as well as management team who are not only highly experienced and who understand how to handle a start-up and make it become a force to be reckoned with nationally. Our staffs are also attuned to our core values and principles and understand the importance of projecting the image of the company positively to our customers – potential and existing.
Another competitive advantage that we have to our favor is our excellent customer service culture which is already resounding across the industry as one of the best of start-ups of our size. Our customer executives are highly trained and are always updated on industry trends so as to be able to give our customers the correct information at all times.
Finally, because we know how important it is for our employees to be happy always, we are committed to treating them right. Our management team has a stake in the company’s profits and our lower cadre employees have incentives built into their welfare packages. All this is to enable our employees remain happy and productive.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Doodle Tech Inc. just like any other business has been established with the aim of generating revenue and making profit in the technology and software industry, and we are going to ensure that we make software that will help us accomplish this purpose, as well as engage in other services as well.
Doodle Tech Inc. therefore intends to generate income by engaging in the following services;
10. Sales Forecast
The software industry has come to stay and can only keep evolving into something bigger and stronger, as there will always be gadgets, devices and templates that would require the use of a new software or an upgrade.
Our strategic location in San Francisco – California has afforded us the opportunity to be close to many technological giants and businesses and this will see us generating and meeting our set revenue in no time, thereby growing our business tremendously.
After conducting a thorough analysis on the software industry and analyzing our chances in the industry, we were able to come up with a sales forecast that has shown strong positives in how we are likely to far in the market.
The sales projections were based on several assumptions and facts garnered across similar start-ups in the industry and across the United States of America as a whole. Therefore, the sales projection that Doodle Tech Inc. conducted to analyze its chances are as follows;
- First Fiscal Year-: $400,000
- Second Fiscal Year-: $800,000
- Third Fiscal Year-: $1,600,000
N.B : The above sales projections were done based on major assumptions that some factors that were used in making these assumptions would remain the same. However, should there be any change either positively or negatively, it would likely increase or decrease the above figures.
- Marketing Strategy and Sales Strategy
Marketing is a very important aspect of any business because it is not only a way to generate revenue for a business; it is also a way of garnering publicity to attract new customers whilst retaining the old ones. Every business no matter its level or life cycle of needs marketing in order to thrive, which is why any entrepreneur or business person starting or running a business usually sets money aside for marketing.
Asides creating funds for marketing, it is also important to ensure that effective strategies are created. Creating effective marketing strategies are essential as they would ensure that the funds are channeled the right way. In marketing Doodle Tech Inc., we would ensure that we leverage on all conventional and unconventional means of making sure that our brand and products are marketed to all our existing and potential customers.
We would conduct a market survey that would allow us understand the right strategies to draft and how effective they would be depending on the target market. To conduct a thorough market survey, we would make use of accurate available data so that we would be effectively able to compete with all our competitors all over the United States of America.
We also intend to hire a reputable marketing consultant who should be able to draft the right marketing strategies that would allow Doodle Tech Inc. penetrate the market. Also, our marketing team would be empowered in ensuring that the marketing strategies created are in tune with our corporate goals and objectives as a business.
Therefore, the following are the marketing strategies we hope to adopt at Doodle Tech Inc. in order to sell our products and services;
- Ensure that we introduce our software development business by sending out introductory letters to technology and manufacturing companies as well as other big software companies and other stakeholders in the industry.
- Network with other software companies by attending software developer conferences
- Advertise our software development business in local newspapers, technology related magazines, and in local radio and television stations
- Ensure that Doodle Tech Inc. is listed in online and offline directories
- Engage in direct marketing and sales
- Ensure that we are actively involved in forums and blogs in marketing our company
11. Publicity and Advertising Strategy
Carrying out the right publicity and advertisement for our software development business is very essential as it is not enough to just penetrate the market and also create awareness, but to ensure that the strategy will result in Doodle Tech Inc.’s products becoming generic terms for similar products in the same category.
Due to this vision, we have hired a reputable publicity consultant who has the industry knowledge and expertise and who will help in ensuring that our company gets to the top by drafting out strategies that are in line with the core policies of the company and will boost our brand and allow us compete favorably against our competitors.
Below are some of the platforms we intend to leverage on in order to promote Doodle Tech Inc.;
- Develop a free version of our software and give users an opportunity to upgrade at a cost
- Leverage on relevant social media platforms such as Facebook, Twitter, and LinkedIn. Google Hangout and other developers’ forum in order to create awareness about Doodle Tech Inc.
- Engage in pay per click advertisement on popular software development forums
- Create contests on social media and via our website to generate more publicity
- Distribute our handbills and fliers in strategic locations
- Install our flexi banners in conspicuous and strategic locations all over San Francisco
12. Our Pricing Strategy
Determining the right price for our various software’s will depend on a number of factors, such as how much the market will willingly pay for such software, how much that category of software is being charged for by competitors, and how unique the software is.
Other factors that will determine the prices are if we intend to charge a licensing fee for our software, or enable a pay per transaction or a subscription that is time-limited for the end user.
In view of all the above based factors, we will offer our software at prices that are at the prevailing market conditions. However, because this is a competitive market, we will however lower our prices in the first two months of business so as to attract more customers to our business, and also increase the awareness for our products.
- Payment Options
Doodle Tech Inc. realizes that due to improving technology, customers now have different payment options that they can use in paying for services; and so we have different payment policy that is intended to suit all our different customers and their diverse needs.
The payment options we have for our clients are;
- Cash payment
- Payment via check
- Payment via online payment portal
- Payment via Point of Sale (POS) Machine
- Payment via credit card
The above payment platforms were carefully chosen for us by our bank and we have been told that our customers will not experience any hitches or inconvenience whilst using the above platforms.
13. Startup Expenditure (Budget)
Even though some of the equipment that can be used to start and run a software development company can be gotten for fairly used, thereby lowering the costs of start-up, it will however be vital to stress that setting up a standard software development company would require the equipment used to be standard so as to be able to withstand the heavy workload that it might have to carry out.
Also, the bulk of capital in these circumstances usually goes to paying workers and utility bills that the business will incur during the course of its operation. Therefore, the key areas where we intend to spend our start-up capital on are;
- Total fee for registering Doodle Tech Inc. in the United States of America – $750
- Licenses, permits as well as accounting software – $1250
- Insurance policy (general liability, workers’ compensation) – $2,000
- Leasing and renovating of a facility for use for at least a year – $20,000
- Cost of hiring a business consultant – $2,000
- Operational cost for the first 3 months (salaries of employees and payment of bills) – $200,000
- Other start-up expenses which includes (windows hosting, Linux hosting, bug tracking, graphics design, software subscription and cable broadband) – $15,000
- Marketing promotion expenses (general marketing expenses and promotion activities for grand opening ceremony) – $5,000
- Administrative expenses (stationeries, phone, computers, printers, furniture business cards, office supplies, and stamps) – $10,000
- Cost of purchasing an official vehicle – $30,000
- Cost of launching a website – $1,000
- Cost of throwing a grand opening party – $5,000
- Miscellaneous – $8,000
From the following report, we would need an estimate of $300,000 to be able to start and successfully set up a software development company in San Francisco – California. IT should be noted the bulk of the capital (90%) went towards payment of salaries for employees for a period of three months.
Generating Funding / Startup Capital for Doodle Tech Inc. Business
Doodle Tech Inc. is a business owned by two geeks and businessmen, Jack Taylor and Christopher Warden. We realize our financing is important for our company if we intend to successfully start, run and become a force to be reckoned with in the industry.
We are however going to be careful in where we source for money so as not to lose a part of our company or get locked in repaying a loan that might hinder the progress of our company. This is why we have decided to limit our sources for income to just 5 sources; The following are sources where we intend to get our start-up capital from;
- Generate part capital from our personal savings and sale of stocks
- Get soft loans from family members and friends
- Apply for research grants at the state and federal level
- Source for part capital from online crowdfunding sites like kickstarter
- Apply for loan from commercial bank
N.B: from our personal savings and the sale of some of our stocks, we were able to generate the sum of $30,000. The soft loans from our family members and friends amounted to $20,000. We applied for a grant of $50,000 at the state level and have been considered.
We were able to generate the sum of $70,000 from sourcing for funds from kick starter, and we are at the final stages of getting our loan of $130,000 approved for us by the bank. All the necessary documents have been signed and we have been assured by our banker that the amount will soon be credited to our account within two weeks.
14. Sustainability and Expansion Strategy
Doodle Tech Inc. is established with the aim of making profit and competing amongst others here in the software industry. We are however concerned about the future of our company and so we intend to ensure that we deploy sustainability and expansion strategies so as to keep our business running for a long time.
One of the sustainability strategies which we intend to deploy is in having the right business structure on ground. This we intend to do by hiring competent and professional employees to handle the various tasks that we will assign to them.
We will employ those who understand what businesses such as ours will need to thrive in the industry and the know-how to ensure that we attain our desired goals and objectives. Our employees will not only be well paid and have attractive incentives, they will also continually be trained so that their skills would be enhanced thereby increasing productivity for the company.
We would draft effective publicity and promotional strategies that would ensure that the awareness for our brand and its products are increased to potential and even existing customers. Our promotional efforts will be geared into ensuring that our brand is positively communicated to even our rivals in the industry.
Most of our publicity strategies would be geared towards the millennials by throwing up contests especially on social media as these have the potential to ensure that awareness about our brand is effectively spread even to the baby boomers.
Finally, we take our customers very seriously and to this effect we intend to ensure that we have effective customer service programs which will see our loyal customers getting incentives.
We also would ensure that we attend to all customer enquiries whilst also making sure that all their complaints are resolved speedily depending on the problem. We know that if we carry out these strategies effectively, we would not only push forth our brand but also sustain our business whilst also expanding it at our own pace.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed
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