Nine steps to build the essential business plan
January 16, 2024
Adam Wakefield

Are you looking for tangible business plan steps to take your idea from napkin to next-level success? You've come to the right place.

Despite the worldwide economic downturn, the African tech ecosystem secured an impressive $4.84b in investments in 2022. This marks a slight increase from the $4.5b raised in 2021. However, the 2023 global slowdown has cast a shadow of uncertainty over the future. Securing funding for your startup could be more challenging under the current circumstances.

Even though the road ahead looks rocky, it's still possible to persevere and succeed. To maximise your chances of success, you need to start with a well-crafted business plan. A business plan outlines your startup's goals, strategies, and financial projections. It's like a roadmap for your business, guiding you in attracting investors, partners, and customers.

Here, we'll dive into each element of a compelling business plan. But first, let's learn why a business plan is essential.

Why do you need a business plan?

Simply put, just like any other goal in life, you need a plan to succeed as a business owner. Here are a few reasons why you need a business plan:

  • Setting goals, prioritising them, and having a clear vision for success.
  • Studying the competition and showing why your product is unique.
  • Outlining effective marketing and sales strategies and financial projections.
  • Attracting investors by highlighting the clarity of your goals and the strength of your ideas.
  • Assessing the health of your business and finding areas for improvement.

Now let's explore how to create an effective business plan through a step-by-step guide.  

1. Write an executive summary

An executive summary outlines your business idea, highlighting how it addresses a specific problem or satisfies a demand. A one or two-page executive summary explains the essence of your business idea to busy investors and decision-makers. It helps them understand why they should invest in your startup, not someone else's.

What to include:

  • Overview of your company.
  • Details of your target market and potential customers (key demographics, size, etc.).
  • Explanation of what sets you apart from the competition.
  • Description of your marketing and sales plan.
  • Estimation of the target market size and growth potential.
  • Overview of your management team.
  • Details of your financial overview and future projections.
  • List of current achievements, milestones, or traction.
  • Explanation of how your business can impact jobs, economic development, and local communities.
  • A clear outline of your funding needs and how the investment will be used.

Let's implement these ideas by writing an executive summary for AfroInnoLab, an imaginary edtech startup in Nigeria. We'll also use this company's example for the rest of the sections in this article. 

Executive summary of AfroInnoLab

AfroInnoLab addresses the lack of physical laboratories and language barriers for African students in South Africa, Kenya, and Nigeria. We offer virtual laboratory solutions and localised virtual classes. Offering classes in local languages sets us apart and enables maximum engagement. Our state-of-the-art virtual labs are powered by AI and virtual reality. They can help with real-world experiments in subjects including Physics, Chemistry, and Engineering.

The booming EdTech industry in Africa presents exciting opportunities for us. We wish to impact local communities and contribute to economic development positively. With our dedicated team of experts, we've established partnerships with reputed schools and colleges. Our goal is to transform practical learning and unlock the potential of African students for a brighter future.

2. Provide company description, mission statement, and highlights 

A company description is a brief explanation of what your business is and what it does. Your mission statement describes your startup's purpose, long-term aspirations, and potential impact on the industry and community. The highlights summarise your startup's unique achievements and strengths. This step helps differentiate your business and shows potential investors why they should fund you.


  • Briefly explain what your startup does and the products it offers.
  • Outline your long-term goals, detailing the impact you want to make in your industry and community.
  • Showcase collaborations that have contributed to your company's growth.
  • Highlight any unique aspects that set your company apart.
  • Describe your company's key achievements and milestones.

AfrolnnoLab practical example: 

Founded in 2019, AfroInnoLab aims to reshape education in Africa. We provide cutting-edge Virtual Science Labs and Virtual Engineering Labs. Our interactive simulations offer hands-on learning experiences in Physics, Chemistry, Biology, and Engineering.

We believe every student deserves a high-quality education irrespective of economic background or location. To date, we've teamed up with 40 leading schools in Nigeria, South Africa, and Kenya. Our Virtual Science Labs and Virtual Engineering Labs have helped 50 000 African students. We wish to empower 500 000 students by 2025. To make all this happen, we're looking to secure $5m in investment over the next three years. This will help us improve our technology and hire more talented people.

3. Do your research

Market research is the collection of information about customers, competitors, and industry trends. Research allows you to identify what people want, create products they'll love, and guide strategic planning.


  • Read industry reports, news articles, and expert opinions to understand the current and future market trends.
  • Figure out characteristics of your potential customer base, including their age, where they live, and how much money they make.
  • Dive deep into their interests, preferences, and problems.
  • Find out how big your market and potential customer base are and if there's enough demand for your product to make a profit.
  • Check out what your competitors are up to see where there's a gap for you to differentiate yourself.

AfrolnnoLab practical example: 

AfroInnoLab's research found an alarming lack of science labs in African schools. Students are missing out on hands-on learning and practical experiments, making it harder to grasp scientific concepts. Language barriers also hinder many students' progress. We talked to teachers, students, and policymakers, who agreed that practical learning is lacking. We are entering into strategic partnerships with schools and colleges to fix this.

4. Set financial goals and projections

Financial predictions give your team direction and help you to spot challenges and opportunities early on. Investors trust solid predictions, making it easier to get funding. Once operational, these predictions allow you to evaluate how well you're doing and make necessary adjustments. You’ll then be able to create detailed financial forecasts that match the economic realities of your market.


  • Look at past financial statements to identify trends and strengths/weaknesses.
  • Understand what factors influenced previous results, including market conditions and challenges. 
  • Set financial goals that align with your overall business plan. Then, implement a series of actions, such as revenue growth strategies and cost management measures, to work towards achieving these goals.
  • Make a sales forecast for three to five years, considering demand, pricing, and growth.
  • Estimate future expenses based on past data and industry standards.
  • Create financial statements (like cash flow statements, income statements, and balance sheets) based on your projections.
  • Consider the financial impact of getting business loans.
  • Look for potential funding sources.
  • Update your financial goals regularly as conditions change.

AfrolnnoLab practical example: 

AfroInnoLab's financial predictions for the South African, Nigerian, and Kenyan markets look promising. Understanding each country's edtech landscape allows us to customise our approach to ensure maximum growth potential. Thanks to local marketing and school partnerships, our sales are expected to expand in all three markets. Partnerships in different markets also diversify our revenue streams to minimise the risk of losses.

Our predictions show we'll make a profit within two to three years. Our solutions are scalable providing opportunities for expansion into other African countries. We have a financial track record of being honest, compliant, and responsible with money management.

5. Describe your products/services

Use details about your core offerings, features, and benefits to clarify what you offer. It shows how your unique value proposition sets you apart from competitors. A comprehensive product description helps you identify your target audience and tailor marketing strategies accordingly.


  • Clearly explain the features, benefits, and USP of your product.
  • Include pricing details and any special offers.
  • Include intellectual property protections or patents associated with your product.
  • Use customer testimonials and success stories to build trust.
  • Discuss scalability and future growth plans.

AfrolnnoLab practical example: 

AfroInnoLab's flagship offerings include Virtual Science Labs and Virtual Engineering Labs. These solutions use virtual reality for physics, chemistry, biology, and engineering experiments.

To break down language barriers, we make learning more accessible by offering virtual classes in native languages. Our solutions include computer science, maths, and technology to ensure students gain practical skills for the real world. We have special training programs to teach educators how to use our virtual labs and classes effectively.

6. Outline your sales and marketing plan 

This section outlines how you plan to enter the market and create awareness about your offerings. Investors are strongly interested in this, as it directly impacts your company's ability to attract and retain customers.


  • Select the best platforms to reach your potential customers, including social media and content marketing.
  • Develop clear and persuasive messaging that highlights the benefits of your product.
  • Set clear goals for your marketing plans, including increasing brand awareness or driving sales.
  • Outline a sales plan of how you plan to convert leads into customers.
  • Regularly track your marketing and sales efforts performance.

AfrolnnoLab practical example: 

AfroInnoLab targets educational institutions, teachers, and students across Nigeria, Kenya, and South Africa. We'll use social media, email, and content marketing to spread the word about our virtual labs. AfroInnoLab emphasises how virtual labs save money, are easy to access, and are safe.

We'll offer free trials, demos, and workshops to our target customers. Our referral programs will reward customers for bringing in new clients. Through our science competitions, students can experience our simulations firsthand. The sales team will offer flexible subscription plans to schools and students.

7. Include ownership structure and financing requirements

This section spotlights ownership, management, your financial needs, and how the capital you're asking for will be allocated. This helps build trust and confidence among potential investors by showing them you have a well-defined plan.


  • Name the founders and key stakeholders and explain their roles in the business.
  • Describe how ownership is divided among the founders and other shareholders, including the legal structure of the business (sole proprietorship, partnership, etc.)
  • Highlight the management team and their roles in the decision-making process.
  • State the amount of capital needed to support your business goals.
  • Provide reasons why you need funding, such as expansion, product development, or marketing.
  • Supply realistic evidence to support your financial needs.
  • Include a timeline for utilising financial resources. 

AfrolnnoLab practical example: 

AfroInnoLab is led by our visionary CEO, Mr. John Doe, and a talented management team handling crucial responsibilities. Our Board of Directors includes industry experts. Key stakeholders play an integral role in operations, finance, and technology, ensuring effective execution. To speed up our expansion in Nigeria, South Africa, and Kenya, we need $2.5m in funding.

  • Nearly 40% of the investment will improve and scale our virtual lab technology.
  • 30% will be spent on expanding our localised content and virtual classes.
  • We'll use 20% for marketing and building brand awareness.
  • The remaining 10% will cover administrative and operational expenses.

8. Lay out your operations and management plans

The operations plan outlines the tasks needed to bring a product to life, deliver it to customers, and keep the business running smoothly.  The management plan highlights your leadership team's structure and role in business operations.  This section demonstrates your business’s preparedness while increasing your likelihood of success with investors. 



  • Outline the steps to create and deliver your products.
  • Describe tasks related to content creation, platform maintenance, and customer support.
  • Set timelines to track progress.
  • Introduce your leadership team and their roles in decision-making.
  • Highlight plans to attract and retain top talent in critical areas.
  • Describe any external partnerships.

AfrolnnoLab practical example: 

At AfroInnoLab, we have a skilled team of educational technologists, virtual reality specialists, software developers, and subject matter experts. We also partner with technology providers to offer cutting-edge solutions. 

Our virtual labs are thoroughly tested for accuracy, reliability, and safety before release. Our scalable cloud-based infrastructure is accessible to users across Africa. Our management team encourages open communication and collaboration. This attracts top talent in education, technology, content, and support.

9. Provide a risk analysis 

A risk analysis assesses and prepares you for possible challenges that may impact your startup. Being transparent about risks boosts investor confidence in your business.


  • List possible challenges that could impact your business. These may include political instability, currency devaluation, and regulatory uncertainties.
  • Determine how severe each risk is and how likely it is to occur.
  • Plan actions to minimise or avoid risks.
  • Outline backup plans in case risks materialise.
  • Present the risks to stakeholders, illustrating how you plan to handle them.

AfrolnnoLab practical example: 

We at AfroInnoLab performed a detailed risk analysis to ensure a successful market entry. We follow regulations and have marketing plans for diverse student and educator preferences. To handle operational and infrastructure risks, we invest in scalable cloud solutions and work with various suppliers. We use financial hedging and plan investments carefully for positive returns. 

Hiring and managing talent is essential to us. We stand out from the competition through innovation and partnerships. Gathering customer feedback helps us improve and ensure our virtual labs and classes are well-received.

Take control of your future by mastering these business plan steps

The task of creating a business plan may seem daunting at first. But it's a crucial step toward achieving your entrepreneurial goals. With a well-structured plan, your business vision and dreams become clearer.

A well-rounded and compelling business plan improves your chances of getting funded. Remember that a business plan is not set in stone. It's a dynamic document that evolves alongside your business. As your startup grows and circumstances change, you can adapt and refine your plan to stay on track. 

Founders Factory Africa can help you with your tech startup's business plan. Beyond that, our team connects you with experts in areas including tech, products, and investments. Apply today to join our portfolio and bring your tech startup to life. 


How to write a business plan?

 To write a solid business plan:

  • Brainstorm about what you want your company to achieve.
  • Explain what makes your products unique and who your customers will be.
  • Illustrate how you'll sell your products and how much money you expect to make.
  • Discuss any problems you might face.

What are the common mistakes to avoid in a business plan?

To write a winning business plan, avoid these mistakes:

  • Absence of achievable goals or clear vision statement.
  • Insufficient market analysis or understanding of who your ideal customer is. 
  • Submitting an incomplete financial plan.
  • Unclear marketing or selling strategy.
  • Ignoring the risks or your action plan to handle them.

What’s the difference between a traditional and a lean startup business plan?

There are two types of business plans. Traditional business plans are thorough and include all the details about the business. A lean startup plan is shorter and more flexible. It's great for testing new ideas fast and adjusting to any changes. Securing funding in Africa with a lean startup plan might be difficult.