On April 29, 2020, my team was selected as the 2020 Preliminary Start-up Package supported by Korea Institute of Startup and
Entrepreneurship Development There’s still a long way to go, but I think it’s a good idea to write down my current experience from a scratch, so let’s create a category called “Somehow, start-up”.
How did I become a founding member? I quit the job in March to prepare for my master’s degree in Germany, and i was preparing for a master’s degree and studying German while taking a course at KNOU(Korea National Open University). The offer was abrupt.
It wasn’t a bad proposal to do as a side hussels (i think i could do it as a side job, at the time), and i decided to go ahead with the expectation that if I worked as a founding member, I would be able to increase a lot of things I didn’t experience. With the spirit of ‘JUST DO IT’.
■ Challenge! Preliminary Start-up Package
Preliminary Start-up Package is one of the few programs for prospective founders who are not currently in business – that is, they are not registered. It is also true that the war between teams before starting anything seems a little easier, as the resources poured in to compete with teams that have already started.
Nevertheless, the recruitment industry is diverse and large in size. There are around 1,100 people selected and up to 100 million won (51 million won on average) is a very attractive program. (If you are preparing to start a business, I recommend you to check out the recruitment announcement (click) and apply for it!)
The documents are relatively brief, if you complete a 10-chapter or so business plan, you are all ready to go. In this article, I will share some tips that you might want to think about when writing a business plan.
■ The Start of The Business Plan – General Status
The business plan for the preliminary start-up package begins with the general status.
1. When selecting a host organization / What to consider the location of the business
Based on remote work, we were relatively free to locate the host organization and the business site. If you’re going to work in the office, you’ll probably choose the organizer depending on the location of the office, but consider that the competition rate will vary by region.
In addition, there is also a tax reduction for small and medium-sized businesses, depending on their location, so if you haven’t yet decided on a business location, you might think about it(if you’re founded outside of the metropolitan area, you’ll be asked to reduce the tax amount on income tax or corporate tax for five years from the tax year in which your initial income occurred – click on the detailed information link).
2. Business Name and Items
The name of the start-up item which is easy to overlook, but it is very important. The names of our products and services should be envisioned at this stage. Brand naming is like the first impression of a product, so make it easy to remember while implying the meaning of your business. If you think about the trademark application in the future… In our case, we didn’t search trademark yet because we made a new word putting two words together.
■ Flower of business plan – start-up item summary
It’s time to introduce start-up items. Let’s be prepared to explain everything on this summary page. There is an opportunity to give details later on, but will there be physical and psychological time for judges to scrutinize so many business plans? Just like writing a letter of self-introduction, we should revise it and make a “self-introduction” of our business.
1. Write a subheading / within 3 pages / Insert the image properly
Good looking rice cake is also good to eat. If you want people to read your business plan, you need to write easily. Write with the sub-titles with ,and do not write too long.
2. Introduction – Why/What/How, give your answer.
Why – Let’s explain why this project is important. The market is getting bigger and bigger, or the general part of how important this field is should be solved at the beginning. If you write a professional-big-words right away, the reader may not be able to understand what it is. Therefore, we need to start at a point where everyone can understand it, and specifically point out the importance of the business.
What – Write what your business want to do in this important field. Picture the current market’s problem. Pain point must be clearly showed at this step. The essence of a startup should not be a vitamin (better to have) but a pain killer(must have item to kill pain).
How – A brief explanation of how to solve existing problems. Summarize the outline characteristics and strengths of the service.
3. Differentiation of start-up items – competitor analysis and customer benefits
Analysis of the current market is needed. If there is no certain data on who the competitors are and what market share is, then you need to take a logical approach and estimate the market by yourself. For example, we estimated the software market in the lab by looking up published papers in the last five years by Google Scholar.
And we focused on the benefits that our future customers will get compared to the competitors. Instead of ending with ‘There is such a function’, try further like ‘These functions allow customers to do research faster/more accurately’. Let’s continue to touch the pain points.
4. Size of target markets – scalibility, prospects, and approach to the market
Let’s estimate the size of the market with TAM-SAM-SOM analysis. In addition, the expected sales figures for achieving a share of X% along with the pricing policy were written. If I went back and revised the business plan, I would like to put a graph of the market on this part.
In addition, define who the primary target of the service. We simply tabled their demographics, the purchasing process, their needs, the current problems they were facing, and how to approach them.
Next step is marketing. We wrote about which channels to promote. If there is a clear definition of the target segment, it will be relatively easy to find and promote the customers.
Simply image the expected appearance of the service. So the judges can imagine what it looks like on the web/app. We also added a second image to compare before and after when we used our feature.
■ Problem Awareness – Motivation for Start-ups and The Need for Start-Up Items
This part was relatively easier to write than the outline part, because there was no restrictions on the volumn(within 5 pages are good). The motivation for the development of the start-up items was divided into technical and social/economic issues.
Technical problems include the lack of such programs, which describe in detail how researchers are doing their research by hand, and pointed out that in socio-economic issues, the cost of commercial programs specialized for the study costs approximately KRW 100 million. It is difficult to use the program in a lab with weak capital, such as a small lab, which will result in a difference in research results and speed.
Finally, we have written that we will solve these problems with our start-up items. We concluded this part by suggesting how to solve the technical and social/economic problems we have written earlier.
■ Feasibility – BM/Business Strategy and Scalibility Analysis
In the feasibility section, we tabled the current service development situation. Which algorithms has been developed now and write about the future direction of the project.
The business strategy is something that I am still working on. We decided to use a subscription economic model, so wrote price plan.
The scalibility analysis explains how the TAM-SAM-SOM was estimated in the summary page, and inserted a table comparing the players in the current market. Compared something like prices, key features, convenience, awareness, and market share. We also inserted one swot analysis, the simplest framework(personally I think swot analysis is meaningless).
■ Growth Strategy – Budget and Prospects
Budget stipulated to promote the current project. I wrote it down according to the amount I applied for, but when I looked at the presentation materials later, there were a lot of ridiculous items…
In fact, labor costs are the most expensive, but when it is written, it is held in the name of development/investment (after passing, the item itself is not significant, and all it needs to do is to show a plan to spend roughly the amount requested). I’ll talk about it again later, but I didn’t know that the labor costs were so scary… This is one of the few moments when i have experienced that the difference between the employee and the employee’s position is so different.
The market entry and performance creation strategy wrote about the channel and direction of how to conduct marketing. This is also a point of constant concern for me. Our target is bio-experimental researchers, so where should we access them the most efficiently… It’s a very tight budget, so you’ll need to find it quickly!
■ Teaming up
It is a description of the history of the representative and team members. In addition to team’s simple history, we emphasized such like “startup career”, “have knowledge related to XX” and “writing papers on XX.” to show our experiences are met with our business
The plan to hire additional personnel was also written (even if not at the moment). This is because to show that we look far ahead and we thought it is important to have such mind when doing a business.
Cooperation agencies were also filled with plans for cooperation, although we did not have an “agreement” at the time. We are now working with the agency after we passed this program.
■ Other references – make sure you have any points to get
We need a mindset to fill everything that can be filled with a business plan. In our case, we could earn extra points for ‘team-building’. It seems to be the easiest item to fill, so don’t miss it. However, if a person who is hired as a team member has a history of benefiting from the previous year’s project, he or she may not be able to hire as an employee, and family member may be included as a team member, but there may be restrictions on paying wages, so check carefully on the rules.
To sum it up – it seems important to focus on the outline in the business plan and to visualize the image/table/graph appropriately. Honestly, there were some things we didn’t think about at all but the document asks to prepare. So we talked a lot to write this document.
Because there are parts that we need to be persuaded to persuade others – and i believe this document exists for that purpose. Don’t think of it as a formality, but if you think of it as a step of checking and preparing for the project in advance, it’s not that difficult to pass the document! Good luck to all prospective entrepreneurs 🙂