A Business Plan (BP) is essential and should be viewed as a tool that serves your business. At Super Capital, we know that a BP is highly technical and vital for project founders. If you are looking to build your Business Plan, you have come to the right place.
What is a BP?
A "Business Plan" allows you to lay out a company's commercial and financial strategy—past, present, and future. Its mission?
To convince the reader of a company's financial health and the project's profitability over a set period. It is created when starting a business with one goal: to allow entrepreneurs to present and steer their project's ambition.
When do you present a BP? Generally, when raising funds from investors or banks. To convince them, a BP must be clear and concise. It contains a massive amount of data, so the goal isn't to drown your audience in it. On the contrary, it’s about guiding them step-by-step to show them the ins and outs of your company!
You will therefore need to be able to adapt it to your audience:
1. For yourself and managing your operations:
For this type of BP, you need to adopt a balanced scenario that is as close to reality as possible. This will be your go-to management and steering tool to gain clarity, track your activity, and anticipate your needs. It should provide you with clear visibility on the following points:
- Your invoiced vs. collected revenue for the current fiscal year;
- Your projected expenses and cash outflows;
- Your projected cash position;
- The calculation of your cash runway (the point at which you will run out of cash).
- Your key KPIs to track: ARR, MRR, CAC, LTV, etc.
With a good operational BP, you won't have any surprises, especially regarding cash flow. In fact, the second most common reason for startup failure is poor cash management and, consequently, unanticipated cash needs... Convinced of its usefulness?
2. For raising equity from investors:
In a fundraising BP, you must present an optimistic, growth-oriented vision that reflects your ambitions. As they read through it, VCs should be able to quickly understand and analyze your business model and strategy. The goal is to make investors want to join your journey! Be careful, however, not to include unrealistic figures, as they will be challenged. For example, if you state in your deck that your market is worth 100 million euros and you aim to generate 50 million in revenue within 5 years, you will need to justify how you will become the undisputed leader in your market.
3. For non-dilutive fundraising from banks:
This is the exact opposite! You need to present a conservative vision, often called a "prudent" or "safe" approach. A BP for non-dilutive fundraising is more focused on profitability (ideally within 24 months). Why? The bank will stress-test your figures to ensure you are capable of repaying the loan under any scenario.
Stress-testing your BP? This is an exercise that involves simulating ultra-pessimistic economic and financial conditions (no revenue growth, fixed costs maintained). This test is designed to study the consequences on your cash flow and the resilience of your business model (in this scenario, pay particular attention to your cash flow!).
How do you build a BP?
The recipe for a well-structured business plan:
A good business plan always starts with precise, pre-established assumptions.
- Set up your revenue assumptions in a dedicated tab:
- Customer acquisition strategy: Marketing budget and CAC, sales hiring and conversion rates, etc.
- Pricing assumptions.
- Assumptions regarding your active customer base: commitment period, churn, etc.
- Set up your business model-specific expense assumptions (OPEX):
- Direct or indirect costs: Marketing, R&D, Sales, etc.
- Fixed costs: rent, subcontracting, subscriptions.
- Build your revenue by compiling the assumptions you established first.
- Create a tab where you project your OPEX (operating expenses).
- Define your HR hiring plan (current staff, planned hires, training costs, etc.).
- List the planned investments (CAPEX): office purchases, computers, etc.
- Outline your financing strategy: loans (to calculate the debt repayment schedule), shareholder current accounts, grants, etc.
- Compile this information into your P&L (pro forma income statement) and your cash flow statement.
- Project your pro forma balance sheet.
- Create an executive summary: a synthesis of your business plan with key metrics and a financing plan.
The business plan: a series of dominoes
Think of it as a narrative: there must be a common thread and a logical sequence between each section.
Everything starts with (1) setting up the assumptions tab, which (2) feeds into the revenue, OPEX, and HR tabs... to finally (3) result in a summary within the financial statement tabs (P&L, cash flow, balance sheet). You must, of course, keep in mind that the goal of all this is to convince your audience that you are capable of repaying a loan or growing their investment. Therefore, the more credible and well-justified your business plan is, the easier it will be for your audience to envision the future with you.
A few tips
To wrap things up, here are a few tips for building a solid business plan:
- Keep in mind that there isn't just one business plan for a single project. While the structure may be the same, there are different scenarios to consider!
- Your company's financial history must be included and up to date in your business plan. Make sure it aligns with your actuals (revenue, cash flow, clients, etc.).
- The most common mistake is presenting only a P&L or a cash flow statement without explaining the underlying assumptions. Bankers and investors need to be able to visualize your projections and feel secure.
- Check that your projected cash level provides a sufficient safety buffer. To do this, you need to build a cash flow statement with a monthly view of your cash.
- Anticipate your company's future payroll and adapt it to your audience. If the business plan is for a bank, avoid projecting too many hires too quickly. Conversely, you can be more ambitious for a fundraising business plan.
- Track the company's results on a monthly basis. It’s a smart move ! This allows investors and banks to follow the project clearly, which helps build their trust.
- A good business plan already involves a lot of pages and numbers, so it needs to be simple and readable. Think: S-Y-N-T-H-E-T-I-C!
We’ve given you some keys and valuable advice for building your business plan. If you aren't familiar with this process, you can reach out to experts like Super Capital. Don't hesitate to contact us.
/Plus de ressources en
Part-time CFO
.jpg)
/Let's talk about your needs
