A good startup plan helps you as a founder make informed decisions. It gives structure to your thinking, highlights your assumptions and helps you identify the next steps that matter the most.

Think of your plan as a guide rather than a guarantee. It should provide you with enough information that you know what you’re building, who you’re building it for and how you’re going to build it.

As markets change, customers behaviour evolves and unexpected challenges appear, this is a document that helps you stay aligned to the purpose of your startup and the actions you are going to take.

First things first, don’t start with a 50-page business document. Start by answering a few simple questions for example: what problems are you solving? Who are you solving it for? What solution are you offering? Why would customers choose you? how will you reach customers? How will you make money? how will you measure success?

Before I go ahead and take you through a step-by-step process, I want you to understand that the purpose of this plan isn’t to impress investors, advisors or other founders. Its purpose is to help you make better decisions and understand what to do next. So, let’s begin.

This is a question, every founder should answer very strongly – “What specific problem are you solving?” The stronger and more painful the problem, there is a possibility that it’ll be easier to attract your ideal customers.

One thing I’ve learnt speaking to a few successful founders is that startups tend to perform better when their ideas are rooted in real problems [how to get startup ideas] than when they’re purely based on trends.

The more specific you are in the problem you’re trying to solve, the better it is for you to attract your idea customers. So, when you’re defining the problem, try to go beyond broader statements.

For example, “small businesses struggle with marketing” is too vague and broad. A clearer problem might be, “local restaurants struggle to consistently attract repeat customers because they don’t have an affordable way to stay connected with existing customers”

The more specific you are, the easier it becomes to build a solution that people actually way. When trying to figure out the problem to solve, you want to ask yourself, “what is frustrating my customer enough that they would actively look for a solution?”

If the answer isn’t clear, you should consider spending more time talking for potential customers. To share an example of this – when I wanted to enter into the startup ecosystem, I spend nearly 2 years talking to almost five hundred founders and then wrote a book for founders which is called “Don’t build a business. Build a slightlybetter one instead” for founders, where I share my experiences about building businesses.

Once you defined the problem you want to solve, the next step is to figure out who has this problem? Your answer cannot be “everyone.” So, you’ll have to be as specific as possible. Which means you literally want to go around and ask people whether have they faced this problem or similar kind of problem.

Define the exact type of customers you’re targeting. This includes the demographics, psychographics as well as the geographics of your customer.

I’ve seen many startups fail because they’re trying to serve too many people from the beginning. Instead of targeting all businesses, target a specific type of business. Instead of targeting everyone, target a specific group of people.

For example, “small businesses struggle with marketing” is too vague and broad. A clearer problem might be, “local restaurants struggle to consistently attract repeat customers because they don’t have an affordable way to stay connected with existing customers”

The narrower your focus initially, the easier it becomes to understand customer needs, create relevant messaging and acquire your first users. While figuring out your target audience, answer 1. Who experiences the problem most frequently? 2. Who feels the pain most strongly? 3. Who is most likely to pay for a solution?

Your first customer segment doesn’t have to be your only customer segment forever. It simply gives you a starting point.

What is the product or service you are offering? And how does your product or service solve the problem? These are the 2 question we are answering here. Your focus when answering these should be on the outcome rather than a long list of features.

Please read this carefully, “customers do not care about the features of the product or service that they’re never going to buy”

Customers, however, care about results. For example: No one wants a project management software, they want their projects to be completed on time. Second, no one wants an accounting software, they want less financial stress and better visibility into their finances.

When describing your solution, explain how life becomes easier, faster, cheaper or better for the customer. That’s what drives buying decisions.

This one’s my personal favourite. Why should customers choose you instead of existing alternatives. You proposition could be better pricing, better experience, faster delivery, specialised expertise or a unique approach.

I’ve seen with some startup founders when they’ve assumed that they have no competitors. They’d literally say, “no one is doing this.” whereas in reality, customers are almost always solving the problem somehow already.

What I’m trying to say is that your advantage doesn’t need to be revolutionary. It simply needs to give customers a compelling reason to switch or try something new.

Ask this, “why would someone choose us instead of continuing with what they already have?” if you can answer that clearly, you’re moving in the right direction.

How will people discover your startup? What channels will you use to generate inbound or outbound leads? Will you use content marketing? Social media? SEO? Paid ads? Partnerships? Direct outreach? How will you make people buy your product or service?

I’ve also met founders who spend months building products without thinking about the customer or distribution and when they launch, they realise nobody knows they exist. A good startup plan includes at least a basic strategy for getting in front of potential customers.

In my experience, you don’t need to be on every channel to begin with. Start with one or two. Choose channels based on where your customers already spend time. For example: B2B founders may benefit from LinkedIn or email outreach or partnerships or events; consumer startups may benefit more from social media, communities and influencer marketing or local businesses may benefit from local SEO and local referrals.

How will the business make money? will it make money by selling products or services? Will it make money through subscriptions? Will it make money through affiliate or commissions? There’s are lots of ways a business can make money, you need to figure out the one for you.

Someone founders I have interacted with have given very little or no thought on how they will price their product or service and how will they make money. But pricing affects everything from profitability to customer perception.

In my experience, you simply need a reasonable starting point that allows you to test whether customers are willing to pay.

A useful exercise is to ask yourself, what value am I creating? How much is that value worth to the customer I am targeting? And what are my competitors charging for similar outcomes?

Your pricing will definitely evolve over time, there’s no doubt. But having a clear revenue model from the beginning help you understand how will you build a sustainable business.

This one’s very important for you as a founder to understand whether you’re making progress or not. There are a lot of metrics for you to track as a founder, however, the one important metric is revenue and profit.

Along with that there are some other metrics such as number of customers, conversion rate, retention rate, etc which helps you optimise your progress from time to time.

The metrics directly reflect the health of your business. For example: if customers sign up but never return, retention matters more than signups. If people visit your website but don’t buy, conversion rate matters more than traffic.

The right metrics depend on your business model but the principle remains the same. Therefore, it is important to measure outcomes, not just activity.

Early-stage startup founders don’t need a detailed business plan. A one-page plan is often enough because the goal like I said earlier is not to impress anyone but to create clarity.

You can build an MVP, spend talking to customers and test your assumptions, so, you can learn more about the problem, the product and the customers. This is more valuable than any detailed plan you try to create.

There are many challenges founder don’t see coming and the mistakes that cause startups to fail because founders spend too little time validating their ideas and too much time making assumptions.