Seed Business Plan: What it is and How to Write it

A seed business plan is a type of business plan that is written to venture capitalists or angel investors to convince them to provide seed capital for your business. Seed capital is the initial funding for a startup that fuels it to kick start its operations. Writing a seed business plan starts with  writing the executive summary and ends with including a risk analysis for your startup.

A seed business plan is important to startups as it conveys its goals and objectives acting as a roadmap for potential investors. The cost of a seed business plan is between $2,000 and $25,000 and a business plan writer helps startups create it. It takes three to four weeks to complete a writing a seed business plan which is typically 15 to 20 pages long.

What is a seed business plan?

A seed business plan is a comprehensive document that helps you access seed capital for your business to kick start its operations. Seed capital is a type of financing used in the formation of a startup and is  provided by private investors in exchange for equity stake  in your business. A seed business plan is therefore written when your business requires initial capital injection and acts as a roadmap for potential investors.

The main purpose of a seed business plan is to offer insights into the vision, market analysis, revenue model and growth strategy of your business to potential investors. The elements of a seed business plan include an executive summary, business description, market analysis, revenue model, marketing strategy, operational plan,financial projections and risk analysis.

What is the purpose of a seed business plan?

The main purpose of a seed business plan is to help you raise seed capital providing you with the initial capital to get your business off the ground. A strong  seed business plan conveys the viability of your business in a compelling manner to investors resulting in you getting funded in a very competitive arena of seed funding.

A seed business plan answers questions about your target market, competitive landscape as well as your revenue model painting a picture of how your startup intends to achieve its goals. Potential investors look for evidence of scalability and feasibility hence, your seed business plan details how your products and services will be developed to meet market demands.

A thorough market analysis in your seed business plan demonstrates that you have a deep understanding of the market. The market analysis reveals insights  such as the size of the market, growth trends and customer segments to your investors. Through financial projections, a seed business plan convinces investors of your business’ potential. A seed business plan helps you to articulate your vision with clarity and to the point. A clearly defined vision shows  potential investors that you are likely to achieve it. 

How to write a seed business plan

Writing a seed business plan is a process that entails various steps just like the normal business plan writing process. Clarity is paramount in a seed business plan as it makes the plan understandable by potential investors. Tailor your seed business plan to different investors emphasizing aspects that align with their interests. Include visual elements like graphs and tables to enhance the appealing of the business plan. Ensure that you include elements of a seed business plan such as the executive summary, business description, market analysis and revenue model. Additional elements are a marketing and sales strategy, operational plan, financial projections and a risk analysis. 

Components of a seed business plan

Components of a seed business plan refer to sections that must be included in the plan. They represent a format that investors expect when they read your seed business plan.  Detailing all the key elements creates a proper format allowing readers to quickly get information they want. Common elements of a business plan include an executive summary, business description, market analysis, marketing and sales strategy and financial projections.

Executive Summary

The executive summary is the gateway to your seed business plan which provides an overview of your business model, competitive advantage and target market. It summarizes the entire business plan in a short, clear and concise manner. An executive summary should include your mission statement, a brief introduction of your products and services and a summary of your financial plans. It is the first thing that potential investors will read but should be written last so that you can highlight information you have identified while writing other sections of your business plan.

Business Description

Your business description should include basic details such as your registered business name, address of your business location, names of key people in your business together with their qualifications. Define your business structure such as sole proprietorship, partnership, company or corporation. Include the percentage of ownership that you have in the business and write a little of your business history.  Business description should be short and to the point.

Market Analysis

Market analysis entails an extensive analysis on your target market, competitors and market trends. It gives the reader an understanding of your industry and the audience your business serves. Detail how your business plans to capture the market share from its competitors.  The goal of the market analysis section is to define your target market clearly so that you estimate how your products and services will perform with the audience.

Revenue Model

A revenue model outlines how your business plans to generate income. A robust revenue model signifies your business’ potential for high returns on investment. Be transparent about your strategies to monetize your offerings such as subscriptions, product sales or partnerships. Demonstrate multiple revenue streams for your business as relying on a single stream is risky. This shows investors that your startup business  has multiple paths to profitability.

Marketing and Sales Strategy

Marketing strategy outlines how your business plans to attract and retain customers such as advertising or marketing campaigns. Explain the distribution channels to be used to deliver products and services to consumers. A sales strategy outlines how you will convert prospective customers  to paying customers. Your marketing and sales strategy should revolve around the value proposition of your business communicating what the business stands for, how it operates and why it deserves the customer.

Operational Plan

An operational plan provides insights into the day to day operations of your business such as staffing, logistics and production. A well structured operational plan shows your readiness for growth. An operational plan ensures that you have organized steps in place for production of your products or services. It proves to  investors that you know what you are doing and back you up to make the plan happen.

Financial Projections

Financial projections project your financial performance over the next three to five years. Present revenue, expenses and profitability projections. Financial projections should be realistic to give an unbiased view of the economic status of your business and the path it is likely to take in future. Investors will carefully evaluate your financial projections before deciding whether to invest in your company or not. 

Risk Analysis

Risk analysis is the process of identifying and analyzing potential threats or events that may adversely affect your business in future. Risk analysis is performed to understand the financial implications of the event occurring and come up with measures to mitigate or eliminate the risk. It guides decision making in your business and helps safeguard your assets. Addressing risks beforehand demonstrates a proactive approach to investors. 

Why is seed business plan important to startups?

A seed business plan defines your business goals before seeking seed capital which is essential for startups as it allows them to get off the ground. A startup uses seed funding to test their business model and make sure that it is viable. A startup is able to test its hypothesis about the market, product and customer base and if the model is viable, it can then begin to scale the business.

A strong team is essential for startups hence, a seed business plan helps attract top talent. Employees want to work for an entity whose objectives and goals are clearly spelt out. The products and service section of a business plan presents what a startup is presenting to the market. It demonstrates that your business offers something valuable that addresses a real need because potential investors require evidence to show that your offerings are demanded in the market.

A robust marketing and sales strategy is essential to have in a seed business plan for a startup and requires in-depth understanding of the market, customer feedback and continuous innovation. With such a marketing and sales strategy, startups will not only attract investors but also build a loyal customer base.

The operational plan in a seed business plan provides clarity on resource allocation for a startup be it human, financial or technological resources. It is a crucial indicator to investors of your business venture’s sustainability, reassuring them that you are able to manage critical aspects of your business.

What is the difference between seed and pre-seed business plans?

A preseed business plan is a plan that facilitates the funding of  a startup’s business idea. Pre Seed funding comes  from family, friends, personal savings and finances the very first steps of starting a business. A preseed business plan facilitates capital for validating a business idea and  building a prototype of a product while a seed business plan is created for validating a business model and building a product.

A preseed business plan is written for family or friends to persuade them to  support your startup while a seed business plan is written  for venture capitalists. Preseed business plan will contain a pitch deck outlining your business idea, market research and financial projections and explains how the funds will be used so that your business reaches the seed funding stage. 

Who helps in writing a seed business plan for a startup?

Professional business plan writers help in writing a seed business plan. They possess the expertise, knowledge and skills required to write a plan that is attractive to investors. A business plan writer is objective hence will help you critically evaluate your business model.

Launching a startup entails numerous responsibilities and therefore a professional business plan writer will save you the time by taking care of research and business planning. This will enable you to focus on other core startup business activities.

What is the cost for writing a seed business plan?

A seed business plan costs between $2,000 and $25,000. The cost depends on the quality required, length, and complexity of your business plan. Other factors that impact the cost of a seed business plan are the level of expertise of the business plan writer, size of the business as well as turnaround time. Longer seed business plans will cost more than shorter ones while a seed business plan for a large company is expensive to write because of its complexity. Shorter turnaround time means that you will have to pay more. Highly skilled business plan experts will charge a higher price than less skilled writers.

How long is a seed business plan?

A seed business plan is between 15 to 20 pages long. The length of a seed business plan is influenced by factors such as the size and type of your business. A seed business plan for a large business will be longer than that of a small business. The more complex your business is, the longer your seed business plan will be. The purpose may increase the length of the business plan.

How long does it take to write a business plan?

It takes between three to four weeks to write a seed business plan. The time taken to write a seed business plan depends on factors such as the level of detail required, the complexity of your business as well as the experience of the business plan writer. A heavily detailed seed business plan and a plan for a complex business will take long to write. A highly experienced writer will take shorter time to write than a less experienced one.