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Business Plan Start Up – How to convince a financial partner?

The start-up business plan is a synthetic document that 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. The business plan will also allow potential financial partners (investors, bankers, etc.) to determine the feasibility of the project before granting you financing.

Advimotion is a financial consulting firm that assists startups and SMEs in obtaining non-dilutive financing and equity fundraising. We also act as advisors in corporate divestiture transactions to best represent the interests of sellers.

We offer strategic consulting and outsourced CFO services to ensure the financial and operational monitoring of your business. Finally, we take care of the drafting of investor documentation : business plan, pitch deck, creation of reporting files and valuation calculations.

For more information, please contact us.

Understanding the start-up business plan process in a bank

If you go to a bank to get financing, keep in mind that the business plan will go through several stakeholders (business manager, branch manager). Therefore, your file must be simple, precise, complete 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 assert 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 that you have mentioned. It should be written last. It is also called the executive summary. This summary will address the strengths of your project in terms of market, team, product/service, metrics and differentiation from the competition.

Presentation of the project in the start-up business plan

In this part you will have to present the product or service, the legal status of the company as well as the capital invested by the shareholders to date.

The product or service should be presented as a whole and, if so, you can describe and mention the features you plan to add over time and the new features to come.

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) goals. This is to indicate the problem you will try to solve by creating your company.

The market within the start-up business plan

Describe your ideal customer and estimate the size of the potential market. For the market potential to be complete, it is necessary to present it in France but also in Europe and/or internationally according to your strategy. Do not forget to mention the competitors and the value proposition that separates your company from those of the competitors. Above all, take care of your market study because the information collected will be useful for the financial forecast. Including reference sources such as articles from the trade press, industry trade associations or press releases from major companies will ensure that your figures and statements are reliable.

Financial projections within the start-up business plan

This is an important part on which the financial partner will spend time in order to probe the feasibility and viability of the business model. Several essential elements must be included in the financial projections in order to allow a complete study of your project:

(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 various expenses can be covered by the income generated by the company’s planned activity. Finding the most accurate estimate is the key to success.

Above all, do not be too optimistic in the evaluation of the turnover. It is sometimes even prudent to minimize it and maximize costs to avoid unpleasant surprises. Don’t create a “worst case” 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 expect 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 but beneficial exercise for you, for the stakeholders and for the company. If writing the business plan is something that scares you or you simply don’t have the time to do it, don’t be left alone and call Advimotion. We would be delighted to help you move forward with your project.

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