Some keys to create a fundraising-oriented business plan :
- Define the market problem : What problem does your startup solve ?
- Conducting market research : Are many people affected by the problem you are trying to solve ? How big is the market you are targeting ?
- Conduct the competitive analysis: Who are your competitors and how do you differentiate yourself from them?
- Write the body of the business plan :
– The presentation of the management team and its collaborators
– Detailed presentation of your products and/or services
– The description of your value chain, i.e. what are the steps until the final product
– Your financial projections and activity indicators.
- Pay attention to the content and the form: the business plan must be pleasant to read
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.
The business plan is an essential document for entrepreneurs. It is used at different stages of a company’s life : first to evaluate the viability of a project, to obtain bank financing, to raise funds from private investors, etc.
Advimotion gives here some keys to create a fundraising-oriented business plan.
1. Define the market problem
The market problem is the main thread of a project: it is about defining the problem you want to solve with your new product or service. It does not necessarily have to be something very innovative. However, bringing differentiating elements, responding to a defined sub-problem, can be a good strategy for startups.
For example, if Uber addresses urban mobility issues, the Kolett application, a women-only “Uber” addresses a dual issue : mobility and women’s safety.
Thus, the way you approach the subject will have an impact on your persona, i.e. the target to which you will sell your product or service.
2. Market research and competitors
The market study is a preliminary step to writing the business plan. First of all, it is necessary to look for relevant information to guide the decision making process. Such a study makes it possible to analyze the factors of success and vulnerability, and to study the different variables that influence the market in order to position oneself.
The next step is segmentation : this involves dividing the market into several segments and associating each segment with a given group of customers. The last step in targeting consists of studying the market-product pairing on which you will devote your resources and knowledge.
All these steps allow you to see if a market is saturated, mature or promising and how to differentiate yourself.
Market research is also an important step in identifying and analyzing competitors and their different value propositions.
Thus, market research plays an essential role in a business plan for fundraising.
3. The body of the fundraising-oriented business plan
The business plan must reflect your activity in a complete way. After the presentation of the previous steps, the points addressed are :
- The presentation of the management team and its collaborators. In this part, it is important to show the expertise of each member.
- The presentation of your products and/or services and how they are different from the competition. As mentioned before, the difference can be a price change, a feature or a different treatment of customers. In all cases, you need to find your unique value proposition.
- The description of your value chain, i.e. the steps to the end customer. Having an overview of the value chain helps streamline it when too many intermediaries are involved.
- Your financial projections and business indicators. What will be the monthly and annual turnover ? When will the company be profitable ? So many questions that are important to clarify so that an investor wants to take the risk to accompany you.
If it is a business plan for a fundraising or a bank loan, it is important to detail the need for financing and the use that will be made of the funds.
4. The management team must adhere to the fundraising business plan
Even if it is often the founder who presents the business plan to potential financial partners, it is important that the operational partners and shareholders adhere to the project. They must be able to “pitch” it.
It is therefore interesting to involve the whole team in the elaboration of the business plan (with different levels of participation).
5. The Executive Summary
The Executive Summary is the summary of your business plan and plays the same role as the back cover of a book, except that here your summary must be more solid and convincing. Given the impressive number of files that banks and investors receive every month, the objective is to sell your project as briefly and effectively as possible.
In the Executive Summary you should segment this part in a clear and structured way. You should avoid using too technical terms that the investor will not understand.
This part must allow the investors to know quickly why you are soliciting them: how the budget will be distributed and if it is sufficient to achieve the objectives set.
6. Form counts as much as substance
Investors will prefer a clear and well-structured presentation rather than a long Word document with no graphs or diagrams to illustrate your points. Methods and tools have evolved: We advise you to use the powerpoint format rather than the word format.
The investor must want to read your business plan thanks to a logical and attractive organization.
Business plan for fundraising : in conclusion
Give priority to quality over quantity of information in your business plan and don’t be afraid to be commercial : You must convince investors that you have the best product or service on your market.
After a first draft, it is very advantageous to have a professional help you write a business plan. To raise funds or obtain a loan, there are specific codes that must be anticipated (rates of return expected by investors, preference on financing certain types of expenses by banks and public organizations, specific ratios to respect, etc.).
Asking for help from a professional can therefore be a serious asset. At Advimotion, we prepare your business plan and accompany you through the fundraising process. For people who are starting their project, adopting the CANVAS form for the business model can be interesting.
Find us on Medium if you want to keep reading. Advimotion, your growth partner.