Entrepreneurship: how to write a good business plan?

Let’s be honest: nobody will ever read your business plan from A to Z. Neither the bankers nor the funds, nobody. “Investors get so many that they cannot study them all. At best, they fly over them”, assures a young designer. But there is no reason to skip this step. “At the start of a creative project, it is even important to write one,” insists Jérôme Masurel, director of the Parisian accelerators 50 Partners.

Working for several months on this 30-page document allows entrepreneurs to correctly assess the business they are starting: will the turnover of their box, after thorough analysis, be closer to 1 million or 10 million euros? And is it worth spending crazy energy just for a million? Before we get to the conclusion, the file is structured around five parts, each detailing one of the ingredients for your success.

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The market

This is the first point to address. Catering, household products or undertakers, accurately outline your market segment and its size. Thus, with Alanna, a social platform for bereaved families, Marie Salmon launched this year in the funeral business, estimated at 2.5 billion euros. “Number of deaths (600,000 per year), average costs per funeral (3,815 euros), annual growth (3%), etc. In the sector, the available data is abundant. It helps build strong hypotheses,” she says. Very often “the indicators are not found.” It is up to the creator to collect information from its future competitors, suppliers and partners, and to calculate its exact scope of activity”, resumes Jérôme Masurel.

The strategy

This is the section where the founder gets the investors to want to fund him. “In Great Britain, Denmark, Portugal, new types of places dedicated to catering are exploding, but not yet in France. But it doesn’t last long. So there are places to go right now,” says Geoffroy Marticou, co-founder of Grand Scène, a food court in Lille. An argument that hit the spot when, between fundraising, loans and grants, the young CEO, who aims 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 financiers depend on a duo or a trio of complementary profiles”, emphasizes Agathe Chapelais, incubator director of the EuraTechnologies accelerator. Write a text where you show how your experience gives you credibility: you have already worked in the sector or in a company with the same model; you have successfully completed large projects; and you have strong enough shoulders not to give up in six months.

Marie Salmon is thus perfectly legitimate at the helm of Alanna because, before launching her young recording, she managed the French subsidiary of two UK 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 one who raised 200,000 euros in pre-seed, among other things thanks to her CV

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The production

Describe your product on 4 or 5 pages. Is it a product or a service, is it offered for sale in a store or by subscription online? Give 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 section about your competitors.

All in all, this meticulous work will allow you to imagine your activity in a concrete way. “By projecting oneself into reality, any problem can be foreseen. For example, Chic Types (menswear) could have saved its skin, in 2016, if it had measured that it would be exposed to so many thefts”, swears Jérôme Masurel.

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the forecast

This is the quantified part of your business plan. It takes up 4 pages and as many tables. “If your market is stable, like that of catering, with known margins and growth rates, your revenue assumptions over 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 costs (expenses, rents, salaries, taxes, etc.) and determine your “breakeven point”, i.e. the turnover on 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). Updated weekly and indicates the minimum number of sales that must be made to avoid going into the red. This is valuable for handling cash.”

Together with Maxime Deguine, his partner, they added two tables: an annual income statement and an Excel file detailing the cost price and profit margin for each product. “Our business plan has primarily served to reassure investors. Thanks to him, they were able to verify that we had mastered our subject.” And be confident enough to give them 2 million euros. On good terms…

Marianne Barbier and Geoffroy Marticou, founders of Grand Scène

“Before we opened our food court, which brings together 10 restaurants and 2 bars in the former premises of Galeries Lafayette, in the center of Lille, we spent six months writing our “data room”. This electronic document of 50 pages contains our strategic vision, our cost estimates, our architecture that carried out the work, the business lease and the company’s administrative documents, the logo, etc. All these elements allow our interlocutors to imagine our activity in a very concrete way. This data room helped us to convince banks and investors to give us 4 million euros.”

grand-scene.com

The 8 key points

Your preliminary business plan must contain at least the following elements.

  • A presentation of your course and your motivations.
  • The company’s assets: its buildings, its equipment, future investments.
  • Human resources: the amount of compensation and social costs for the manager and employees.
  • WCR (working capital requirements): expenses that must be incurred while waiting for cash to come in.
  • Must be financed: investments, inventory, start-up costs (advertising, training, etc.), WCR.
  • Resources: your contribution, support received, bank loan.
  • The result: Revenue minus purchases, fixed costs, personnel costs, depreciation and interest on debt.
  • The three-year financing plan. It is the summary document and the final verdict that confirms – or not – your forecasts in terms of free cash flow.

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