Why Bother Building a 2021 Startup Sales Plan?
At Allied Legal, we have pioneered the Startup Sales Service. “We help Startups to Sell. We Sell for Startups”.
Why do we need a startup sales plan?
There has been an ongoing debate as to whether early-stage startups should bother performing the annual ritual of putting sales numbers on a page, especially after the year we’ve just had. Wouldn’t time be better spent in building the product or platform, taking it to market versus hypothetical planning with numbers that become a wish-list.
There is power in numbers, there is power in math, there is power in writing it down, and there is power in yelling it out loudly. Didier Elzinga, People Geek and CEO/Co-Founder of Culture Amp said in his starting business plan “10,000 times $10K equals $100 Million”. Culture Amp set out to build a business where 10,000 organizations were willing to spend $10,000 a year. In 2019, Culture Amp raised $82M and was valued at $700M on its way to being a $1B unicorn.
In this article, we will cover:
- What is the difference between a business plan, pitch deck, startup sales plan and marketing plan?
- Should you have one?
- What is included?
What is a business plan?
Most people think a business plan is just used by traditional businesses to inform a lender such as a bank, that the business is viable, and able to repay. However, that is not correct. A business plan is a wide overview of the business and what you need to achieve and provides you a roadmap to get there.
- Company profile (including staff, operations and location).
- Marketing and financial aspects.
- Clearly outlined mission and goals.
- Business structures.
What is a pitch deck?
The pitch deck is used by founders of startups to present your company to prospective investors, when you are looking to raise money for your startup.
Investors such as Angel Investors, Family Offices, VC’s or Venture Capital firms receive hundreds if not thousands of pitch decks a year. They typically expect the following information in the pitch deck:
- Company Overview.
- Mission/Vision of the Company.
- The Team (Co-Founders and their background), Key Members).
- The Problem being solved.
- The Solution and how is it different.
- The Market Opportunity.
- The Product.
- The Target Customers.
- The Technology.
- The Competition.
- Traction, and an early customers, adopters or key partnerships.
- Business Model to generate revenue.
- The Marketing Plan (including Customer acquisition costs, and Customer Lifetime Value).
- Financials (actual and projected).
- The Ask (How much are you raising, and what help do you need).
What is a startup sales plan?
The Startup Sales Plan lays out your sales strategy for achieving sales revenue in a fixed time period. For example, a Sales Plan would lay out the objectives for next year, which could then be broken down further to set quarterly and monthly objectives.
As an early stage start-up that has no sales or few sales, you may decide to use a LEAN approach to develop your sales plan. You may set an objective of having your first or next paying client, and then set a plan and timeframe for the next. In essence, doubling your client acquisition within a specific time period.
The Startup Sales Plan will also take into account your pricing strategy, and therefore from which you can make assumptions on average deal size, that form user or revenue projections or revenue forecasts.
The quicker you adopt your sales plan will in turn also help with extending runway through revenue, versus burning through cash reserves. It’s the achievement of the Sales Plan that could provide the lift you need.
Scenario: Starting your LEAN Startup Sales Plan for a Service
The average service deal size is $5K
- In Year 1, It took about 4 months for the first sale, then 2 to 3 months for the next few. You have 4 clients for a total of $20K in Sales.
- In Year 2, as part of your Starup Sales Plan you are forecasting $100K of Sales Revenue based on pipeline, repeat customers, assumptions, additional investments and resources.
- $100K translates to 15 clients as some are now also repeat.
- In Year 3, from some of your marketing investments and opening up channels you are projecting $300K. There are assumptions on loyalty for repeat clients, and growth in new clients through client acquisition strategies.
2021: LEAN Startup Sales Plan for a B2B Services startup
Year 1: 2020
Year 2: 2021
Year 3: 2022
|# New Clients
|# Repeat Clients
Scenario: Starting your LEAN Startup Sales Plan for a SaaS
In a B2B SaaS Startup, getting new clients and new users that are not only signing up, but are engaging the platform are key. SaaS sales cycles can vary depending on price, customers, and complexity of the product. A product that is $100/month will likely have a faster sale cycle than a product costing $10,000/year.
In a Transactional or Enterprise SaaS, how you will interact with your customers and how you’ll close business could also be included in your sales plan. This could include # demo’s, # trial’s, and conversion rates such as Demo-to-Trial ratio. The mix of registrations including tracking and forecasting Monthly and Annual Subscriptions can also be included as part of the Sales Planning process.
There are a number of financial models available on-line for SaaS Startups. Building the financial model is a good start, especially so you are capturing new users and those churning and using that build your Sales Plan.
2021: LEAN Financial Model for a B2B SaaS Startup
|Year 1: 2020
||Year 2: 2021
|Additions / Growth Rate
|Monthly Subscription Fee
What is a marketing plan?
Whether a SaaS startup, or services startups having a marketing plan will tell the market who you are and what you offer. A well-executed Marketing Plan will also be a source of Marketing Qualified Leads for your sales team.
A LEAN Marketing Plan to drive sales revenue should also include:
- Web Traffic: How to get it.
- Email Marketing: How email can be an engine for growth.
- Leads: How to nurture your audience into leads for your sales team.
Need help to build or review your Sales Plan. Book a complimentary 30 minute consult. Allied Legal now offers Startup Sales Service. We help startups Sell. We sell for startups.
Need help? Contact us
Please contact our team should you need assistance with your Sales Plan and. Remember, we offer legal and startup sales services and would be pleased to assist with the legal and / or commercial aspects of such transactions. You can give us a call on 03 8638 0888 or email us at email@example.com.