Entrepreneurship: how do you write a good business plan?

Let’s face it: no one will ever read your business plan from A to Z. Neither the bankers nor the funds, nobody. “Investors get so many that they can’t study them all. At most, they fly over it,” assures a young designer. But that’s no reason to skip this step. “In fact, at the start of a creative project, it is essential to write one,” emphasizes Jérôme Masurel, director of the Paris accelerators 50 Partners.

By working on this thirty-page document for several months, entrepreneurs can indeed make a good estimate of the business they are starting: will the turnover of their box after a thorough analysis be closer to 1 million or 10 million euros? And is it worth spending crazy energy for just a million? Before coming to the conclusion, the dossier is structured around five parts, each describing one of the ingredients of your success.

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The market

This is the first point to address. Hospitality, household goods or funeral directors, carefully outline your market segment and its size. For example, Marie Salmon started this year with Alanna, a social platform for bereaved relatives in the funeral industry, estimated at 2.5 billion euros. “Number of deaths (600,000 per year), average expenses per funeral (3,815 euros), annual growth (3%), etc. The data available in the sector is abundant. It helps to build strong hypotheses,” she says. Very often, however, “the indicators do not exist. It is up to the creator to collect information from its future competitors, suppliers and partners, and to calculate the exact scope of the activity,” continues Jérôme Masurel.

The strategy

This is the section where the founder makes investors want to fund him. “New types of catering establishments are exploding in Great Britain, Denmark and Portugal, but not yet in France. But it won’t be long. So there are now places to go,” says Geoffroy Marticou, co-founder of Grand Scène, a food court in Lille. A bull’s eye because between fundraising, loans and grants, the young CEO who wants to open several other addresses in France has raised 4 million euros.

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The team

“This passage counts a lot because the funders rely on a duo or a trio of complementary profiles,” underlines Agathe Chapelais, incubator director within the EuraTechnologies accelerator. Write a text showing how your experience gives you credibility: you have already worked in the industry or in a company with the same model; you have successfully completed large-scale projects; and you have strong enough shoulders not to give up in six months.

Marie Salmon is thus perfectly legitimate at the head of Alanna, because before launching her fledgling shoot, she ran the French subsidiary of two British scale-ups: Made.com (furniture) and Bloom & Wild (flowers). Nothing to do with funerals, but they are digital platforms. “I’m used to these companies”, assures the person who, thanks to her resume, raised 200,000 euros pre-seed

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The production

Describe your product on 4 or 5 pages. Is it a good or a service, is it offered for sale in a store or through an internet subscription? Please provide details. “If you deliver, say, for example, how much the logistics cost you each time and how you finance it,” advises Agathe Chapelais. Also include a paragraph about your competitors.

Overall, this meticulous work allows you to present your activity in a concrete way. “By projecting yourself into reality, any problem can be anticipated. For example, Chic Types (men’s clothing) could have saved its skin in 2016 if it had measured that it would undergo so many thefts,” swears Jérôme Masurel.

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The prognosis

This is the quantified part of your business plan. It occupies 4 pages and as many tables. “If your market is stable, like that of catering, with known margins and growth rates, your revenue assumptions in three years will be realistic,” explains Jérôme Ledig, chartered accountant and president of In Extenso Côte of Azure. But if it’s recent, or even new, as is the case with start-ups, your projections will sound like science fiction. In this case, it is better to present a forecast at the break-even point.”

To do this, list all your expenses (expenses, rent, salaries, taxes, etc.) and determine your “break-even point”, ie the turnover above which you start making money. Above all, “the income statement is an essential management tool,” emphasizes Nicolas Simon, co-founder of La Marque en less (household products sold online). It is updated weekly and specifies the minimum number of sales that must be made to avoid falling into the red. This is valuable for managing cash.”

With Maxime Deguine, his partner, they added two tables: a financial statement and an Excel file with the cost price and profit margin of each product. “Our business plan has mainly served to reassure investors. Thanks to him, they were able to check whether we had mastered our craft.” And be confident enough to award them 2 million euros. On good terms…

Marianne Barbier and Geoffroy Marticou, founders of Grand Scène

“For the opening of our food court with 10 restaurants and 2 bars in the former building of Galeries Lafayette, in the city center of Lille, we spent six months writing our “data room”. This 50-page electronic document contains our strategic vision, our cost estimate, our architecture that carried out the works, the commercial lease and the company’s administrative documents, the logo, etc. All these elements allow our interlocutors to present our activity very concretely. helped convince banks and investors to provide us with 4 million euros.”

grand-scene.com

The 8 most important points

Your preliminary business plan must in any case contain the following elements.

  • A presentation of your education and your motivations.
  • The company’s resources: its buildings, its equipment, future investments.
  • Human resources: the amount of compensation and social charges for the manager and employees.
  • WCR (Working Capital Requirement): Expenses to be incurred while awaiting cash inflow.
  • To be financed: investments, stocks, start-up costs (advertising, training, etc.), WCR.
  • Resources: your contribution, assistance received, bank loans.
  • The result: sales minus purchases, overheads, personnel costs, depreciation and interest on debt.
  • The three-year financing plan. It’s the summary document and final verdict that confirms – or doesn’t – your forecasts in terms of free cash flow.

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