Preparing for Government Support Programs Part 2, I will post about how to write a business plan.
If you haven't seen Part 1, click the URL below!
Before writing a business plan for government support programs, please check what you need to prepare.
0. How to Write a Business Plan for Government Support Programs by Category
Usually, a business plan for government support programs should be around 15 chapters long.
While the business plans for Leading University Startups or Startup Schools are around 8 chapters, R&D business plans are 15 chapters long. Try not to exceed 15 chapters if possible. You will lose points if you exceed the standard number of chapters.
Although the business plan sections vary slightly depending on the business, let's focus on the criteria for Innovative Projects (Startup Growth Technology Development Projects).
- Overview and necessity of the technology
- Technological readiness (preliminary research), technological development goals and content
- Commercialization goals, market analysis, competitor analysis
- Commercialization plan (sales outlets, overseas market entry plan)
Now, shall we go through them step by step?
1. Overview and Necessity of the Technology (Business)
In the necessity of the technology (business) section, you should appeal to 'why you are starting this, and why customers need it.'
There are problems in the market causing inconvenience to customers, and by doing this business, the problems can be solved! Oh? But I have the technology to develop this! You should naturally connect the existing problems in the world to yourself.
Mix your experience + current trends + market situation to create a story. Even if you say the same thing, people remember words with a 'story' better. Put yourself in that story.
- Personally experienced a certain problem (problem identification)
- Solved the problem using a certain method (problem-solving)
- Found out that many people are experiencing the same problem (statistics, evidence)
- People are solving it in their own way, but satisfaction is low (competitor products)
- I can solve it in a certain way, and people like it (survey)
- So, I want to commercialize (research and development) this
Writing about one chapter should be enough. If you prepare this part well, it will be helpful when explaining during face-to-face evaluations later on.
This is the first step to sway the minds of the judges.
2. Content and Feasibility of the Business (Technology)
This section is where you describe the content of the business (technology) in detail. It should be about 3 chapters long.
If it's in the idea stage, it's good to explain the structure. It's better to use tables or diagrams rather than text if possible.
Judges review hundreds of business plans day and night. They spend all day reviewing business plans, which is a very exhausting task.
Please make it easy to understand and express it in a simple way with diagrams. Attach detailed drawings, diagrams, 3D models, etc., separately. For platforms, attach flow charts, storyboards, etc. In other words, include only the essential primary content and separate the rest as an APPENDIX.
We expressed differentiation and expected effects in the table below.
3. Technological Development Goals and Content
The technological development goals section is unique to R&D business plans. You need to write down performance indicators for research and development, and if you write them vaguely, problems may arise later on. Since evaluation is based on quantitative goals after research and development is completed, judges pay the most attention to this section during actual evaluations.
You need to set goals related to the item's technology. It is recommended to consult with the voucher manager in advance to confirm strategic goals for similar items. You need to find evidence of official certification. Self-certification is not recognized.
We found this part difficult as we are in the software field. We also received feedback on the importance of the indicator part during face-to-face evaluations. It felt like attending a lecture on how to set indicators. Write down how you will measure what technology with what hardware. The calculation method of the results should be accurate, and only include indicators included in the scope of development.
If you have the time, it's good to have precise results from tests. (It acts as a positive point!)
Explain the technological development content with diagrams as much as possible! Understanding technological content through text alone is quite challenging. If it's not understood, there is a high chance of the business plan being rejected. We explained concepts of algorithms or technologies with diagrams.
The image below explains the data collection technology used in the actual business plan.
4. Market Analysis and Competitiveness
Describe how the market size, growth potential, competition, and risks are related and how they affect our service.
If it's a platform, please show how the distribution structure has changed, how prices have innovatively decreased, and what strengths you have in diagrams or tables.
In this section, you must clearly show the differences from competitors.
- Compare and analyze existing products/services in the market with our service (market analysis)
- Identify our target market (positioning)
- Select two leading competitors in the market and compare them with our service (competitor analysis)
- Compare our service with theirs (competitiveness)
Extract competitiveness in the above order and appeal. You can show the main service process or diagram the before and after introduction of technology. When conducting a competitor analysis, remember that the same startup companies are not competitors. It is recommended to compare with about two leading companies like large corporations.
The image below is a comparison table of key competitor technologies/services actually used in the business plan.
Hashscraper's strengths are 'price' and 'convenience,' so we emphasized providing maintenance services at low prices and an easy user experience. We grabbed too many competing companies, but we do not recommend this approach.
As mentioned earlier, focus on one or two potential competitors and compare based on your strengths.
5. Growth Strategy
This part is where you write about financial requirements, export plans, etc., but it is a less important section compared to other items.
Write about how you plan to systematically use the business funds.
R&D business expenses are particularly challenging, but in the early stages of startup business plans, it is sufficient to describe them roughly.
When writing down R&D business expenses, it is recommended to allocate them to personnel expenses if possible. It is best to include personnel expenses, outsourcing expenses, equipment purchase expenses, intangible assets, payment fees, travel expenses, education and training expenses, advertising and publicity expenses as much as possible.
Write it in Excel, separate cash and non-cash items, and make sure the amounts match. Be sure to include patent application fees. (It is almost mandatory)
The initial market entry strategy needs to be described in detail. Rather than catching a cloud, it is essential to write as realistically as possible.
Write about how you will enter the market with which company and what strategy. If you plan to do online marketing, don't just say you will use Instagram. Instead of saying you will do Instagram, say you will recruit over 100 influencers with over 10,000 followers and promote for 100 days. Specific plans like this are needed.
If you have data from past promotions, it's even better. If you have run Facebook ads, show what results you got, the age group of users, and what percentage of users made a purchase.
When writing about plans to enter foreign markets, write about one country only. Avoid impossible plans like entering multiple countries without capital (we got in trouble for writing that way haha)
Some people may skip writing about plans to enter foreign markets, but don't do that. Government policy moves based on exportability and job creation, so leaving this part blank may result in a low evaluation score. This is a section that cannot be left blank.
Describe how you are preparing and divide it into first and second market entry strategies realistically.
Since direct export may be difficult, it is good to indirectly enter through agencies or collaborate with similar companies. Write that you will enter the market indirectly through exhibitions, KOTRA, trade associations, etc. (However, KOTRA is said not to be very helpful.)
The exit strategy (Exit) should include goals, timing of achievement, desired amount, and fundraising method in one sentence.
It is better to plan the exit strategy towards M&A rather than IPO. It is better to find a more realistic method to write. In the initial startup package business plan, a section on practicing social values has been added. It was not there before, but the added section is important.
It's not just about social values, but write about how you will maintain good personnel. Write about introducing stock option systems, compensation systems, the 52-hour workweek policy, etc.
6. Other Tips
- If you keep the item name ambiguous, it will cause confusion from the beginning. Keep it clear. Avoid ambiguous expressions!
- There should be no blank spaces in the business plan. It will be scored as zero.
- On the first page (overview), include all the key words to make it possible to predict what the item is.
- In written evaluations, a business plan that stands out is the best. Use tables, diagrams, and confine long texts to tables.
- After reading the business plan, there should be a lingering thought of 'Ah, this is the differentiation.' Consistently make your point.
- Avoid technologies/services that people are not aware of. If it's not an area of interest, people won't listen or read well.
- Choosing the right school is important for the initial startup package. Going to a school with low competition will increase your chances. The competition ratio in low-competition places is about 10:1.
- Writing an R&D business plan should be given about a minimum of 2 months. And it needs to be continuously upgraded.
We have shared the know-how of writing a business plan like this.
Writing a good business plan is important, but there is actually something more important.
It's the entrepreneur and team members. Even if you write a good business plan, it's useless if you don't have the ability to implement it.
Therefore, judges carefully examine the business execution capabilities of the entrepreneur and team members.
Work with good people and comfortably grow your business with government support programs.
Also, read this article together:
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