How to make a good startup business plan ?
Writing a good business plan is imperative when you want to raise funds to launch your business. Although having an idea is not enough, it is important to develop it in order to convince others.
What is the business plan ?
The business plan is the document that will allow you toexplain in detailtail your project to create your startup or your company. It contains all the information about your business model and the financial, strategic and business objectives. These are points to plan for at least the next 3 years. A 3 year business plan can seem like a long time.
Nevertheless, it is necessary for all entrepreneurs who start their own business.
It is a first visual that confirms the feasibility and profitability of your business. The business plan serves you as benchmark, for you and your employees. It can serve you well from time to time to take stock as a team.
For example, you can use it to compare your forecast with the actual result.
However, the business plan is also about convince partners and investors. Before investing in your business, all investors and financiers will ask you to send them your business plan. It must then highlight the credibility of the project and the business opportunity that is available to them.
When the financial strength of your project is reliable and convincing, you can be sure ofobtain financing from the investors of your choice. It is imperative that the potential ROI or return on investment be clearly detailed in the business plan.
Through your business plan, you must be able to explain that the profitability of your project is high. Enough, in any case, to compensate investors for the risks involved in investing in your startup !
What should the business plan contain ?
The content of a business plan is not exhaustive. It is presented according to the project to be designed. Traditionally, it includes two parts.
There is the editorial part which contains the’executive summary, and the one dedicated to finances.
The first part
The first part of the business plan must contain theexecutive summary. It includes the teaser the content of your business plan. Its length should not exceed no more than 2 pages.
Its purpose is to make investors want to discover the rest of your presentation and to accompany you in your adventure.
The first part of your business plan business plan must answer several questions. In particular, the one that consists in define the type of market on which you wish to position yourself. It must also highlight the expectations of your customers.
The knowledge of this one will allow to adhere to the project that you wish to carry out. Indeed, an idea that does not meet an unconscious need or a real need is unlikely to convince investors.
You must also specify your objectives and the benefits of launching and realizing your idea. Generally, these are points that are addressed in the business model which is part of the business plan. The first part should also contain the result of the market analysis that you have previously carried out.
It details your competitors (their strengths and weaknesses) and the environment in which your young company will operate. Without forgetting the necessary human resources, and those that are available to you.
The legal dimension of the project must also be mentioned in your business plan. That is to say, you should mention the capital distribution, the type of structure chosen, the legal representatives..
The second part
This last part is mainly reserved for key figures of the project. Among other things, you address the following projected results of the startup. It is an approach that will highlight the revenues generated by the company’s activity and the expenses that have weighed during an accounting period.
The difference between these two points gives the result of the exercise over a given period. It can be a loss or a profit.
The financial part of the business plan should present the projected balance sheet of the activity to be launched. It presents on one hand the assets of the company :
- of the stocks,
- of the capital
- and the availability of the establishment.
On the other hand, it sets out the liabilities of the company which includes :
- social and fiscal debts,
- the social capital,
- the debts of the suppliers,
- those of a financial nature,
The projected balance sheet is a representative of the company’s assets. It can also contain your cash flow budget which is all your revenues and expenses. The terms cash inflows and outflows are often used in such cases.
The design of an effective business plan for a startup
There are three main points to address in the design of a business plan business plan for it to be complete.
The action plan It includes the startup’s objectives translated into numbers and the key factors that lead to success, as well as the business plan’the investment plan and all the means necessary to carry out the project. Without forgetting the production (human resources, cost and production site). On the other hand, the marketing and communication strategy the product and/or service to be promoted.
Business goals and global development plan should also be part of the plan to grow your startup . For the financial forecasts, it is necessary to evaluate the estimated income, expenses and break-even point. That is, the precise moment when the activity will be at its peak. The financial section is not complete without the The balance sheet, cash flow plan and financing plan (share in equity, funding, aid…).
Last but not least, you have to present the investment opportunities that are available to you. This is a step where the capital needed for the success of the project is addressed. It also describes the risks to be faced and the strengths of your team.