A startup represents the beginning of the development of a new company. Which at the time of launch may not even be a registered legal entity. These firms begin to develop from scratch. The term also applies to companies that are only at the stage of their creation. To startup, it is important to make a startup business plan.
The realization of the business plan is an essential step for any entrepreneur. Its importance is even more accentuated in the case of a start-up. Since it will have to convince investors in order to complete the financing of the project.
The Usefulness of the Startup Business plan
The business plan allows startups to materialize, structure and present their project, as well as their financial objectives. It must be carried out at the start of the project and then updated. Here are three essential uses:
- First, the business plan allows you to build your business creation project. Then study its financial feasibility and profitability, and then serve as a steering tool when the activity starts.
- Then, as part of a start-up, the business plan is an essential document to convince investors to make their contribution to the project.
- Finally, when the founders of the start-up plan request help for creation and/or take part in business creation contests. A well-constructed business plan is essential to attract investors.
What are key element of business plan of a start-up?
A business plan is made up of two main parts. First presents the project and the second translates it financially. It should not be too long. It should be about thirty pages or less, and not have too many appendices.
Following are the main elements of business plan:
- The executive summary,
- Presentation of products and services,
- Market and the business model,
- The presentation of the project leaders and the mobilized teams,
- Financial, legal and tax package,
- The presentation of the progress of the project and the timetable,
- The provisional income statement,
- The forecast balance sheet,
- The financing plan,
- The cash flow statement,
- Important financial indicators.
The executive summary
The business plan begins with the executive summary, which consists of a summary of the project. It must be short and arouse the interest of the reader so that the reader discovers the project in detail.
The Presentation of the Market and the Business Model
The study of the market is an essential element of the business plan. In this part, particularly should be a description of the target market. And the analysis of the competition and the study of the trends.
After presenting the market, the business plan explains the business model. That is to say how the start-up intends to sell its products or services. And how it intends to earn money.
Presentation of Project Leaders and Mobilized Teams
The presentation of the founders and the teams is important. It is carefully scrutinized by the investors who need to ensure that the team has the skills and experience necessary to carry out the project.
Presentation of the Financial, Legal and Tax Package
This part is devoted to the technical presentation of the start-up set-up. What is the legal status chosen? what is the applicable taxation? How is the share capital distributed? and what funding has been mobilized?
Presentation of Project Progress and Timetable
The Provisional Income Statement
We generally start the financial part of the business plan with the provisional income statement. Which highlights the result of the activities of the start-up over the forecast period. How rich was the business over the period and where did it come from?
This financial statement includes all of the income and expenses by financial year, then leads to the calculation of the result (profit or loss).
The Forecast Balance Sheet
The forecast balance sheet shows the state of the company’s assets at the end of each financial year over the forecast period. A balance sheet contains all of the assets, which correspond to what the company owns (investments, stocks, receivables, cash, etc.). And all of the liabilities, which correspond to what belongs to third parties (share capital, reserves, financial debts, supplier debts, tax, and social debts, etc.)
The Financial Plan
The financial plan is a financial statement that presents the financial balance of the project. It includes all of the needs to be funded and in return all of the financial resources allocated to the project.
Cash Flow Statement
The cash flow statement, preferably drawn up month by month. It measures the evolution of the cash flow of the start-up according to the assumptions adopted. This financial statement includes all receipts including customer payments, capital contributions, current account contributions, etc. And all disbursements, for example, supplier payments, credit repayments, payment of salaries, etc.
Important Financial Indicators
Finally, the financial part of a start-up business plan generally includes several important financial indicators.
First, there are the classic elements, for example, working capital, the working capital requirement and self-financing capacity, and then other ratios more specific to the sector activity of the start-up. For example for web projects, the average basket, the cost of customer acquisition, the margin rate and the conversion rate.
Budget tax and social assistance for innovative start-ups
Start-ups with innovative projects, especially those involving research and development expenses, can claim tax and social measures in favor of innovation, such as the research tax credit, the innovation tax credit or the status of a young innovative company
We recommend integrating these tax and social assistance into the startup business plan only when you are sure you can benefit from it. Also, the support of an accountant is important to understand these complex systems, both in their eligibility and in their calculation
Startup Business plan Solutions
There are several possible solutions for building a business plan:
- The presentation and description of the project can be done on a word. Many models can be downloaded from the internet. Then there are applications specially designed to build a business plan.
- The financial part can be constructed using a table as an excel or using an application specially designed to establish financial forecasts. This last solution is to be preferred to facilitate the task and to avoid errors.
Also, the founders of the start-up can count on their chartered accountant for the construction of the business plan. As well as on certain organizations that support the creation of companies that can make applications available.