The Business Plan is a synthetic document which aims to present the activity of a company and its potential. It traces the genesis of the project, presents the project owner(s), describes the human resources, marketing and sales strategy and the financial forecasts for the next 3 to 5 years.
A real way to project yourself, the Business Plan of your start-up allows you to have a clear vision of the means of future development. It is also this document that will allow potential financial partners (investors, bankers) to determine if it is possible to grant you financing.
Understand the path of the Business Plan of a start up within a bank
If you go to a bank to obtain financing, keep in mind that the business plan will go through several stakeholders (business manager, branch manager). Therefore, your file must be simple, precise and well written because you will not always have the opportunity to comment on it to your contact person. Finally, it must be realistic and state verifiable things, which is why you must cite the sources of all the information and figures in the business plan.
But “What should be written in a start-up business plan?
The operational summary
The operational summary is an overview of your business plan in one or two pages summarizing all the important points you have mentioned. It should be written last. It is also called the executive summary.
Presentation of the project
In this part you should present the product or service, the legal status of the company as well as the capital invested by the shareholders to date.
You should also talk about your vision, the “why” of the company’s existence, as well as your short-term (achievable in 1 year) and long-term (achievable in 3 years or more) objectives.
Describe your ideal customer and estimate the size of the potential market. Don’t forget to mention competitors and the value proposition that separates your company from the competition. Above all, take care of your market research, as the information gathered will be useful for your financial projections.
This is an important part on which the financial partner will spend time to probe the feasibility and viability of the business model. Here is what should be included:
(a) The projected income statement: it presents your EBITDA and the elements (expenses and income) that allowed you to calculate it. This will allow you to see if the company’s projected activity will generate enough revenue to cover the various expenses.
Above all, do not be too optimistic in your evaluation of the turnover. It is sometimes even prudent to minimize it and maximize costs to avoid unpleasant surprises. Do not create a “disaster” scenario either. Remember that the financial partner will not finance a project that is not profitable.
(b) The break-even point: this indicator gives us the threshold at which the project is profitable. It is also called the “break-even point”.
(c) The cash flow plan: presented monthly, this document shows the cash inflows and outflows that you anticipate during the course of your business.
(d) The 3-year financing plan: You must indicate your financing needs and the sources of this financing (loans, grants, etc.).
A time-consuming but essential document
Writing a business plan is time-consuming but essential. This step will allow you to have a clear vision of the company’s current needs as well as its growth perspectives. It will also allow your financial partners to understand your business idea and your financing needs. Writing the business plan is therefore a tedious exercise but beneficial for you, for the stakeholders and for the company. If you are afraid of writing a business plan or simply don’t have the time to do it, don’t be alone and call Advimotion. We would be delighted to help you with your project.
Advimotion, your partner in growth.