Business models must not remain fixed

The business model – with its concrete declension, the business plan – forms the road map for every business creator, but it must under no circumstances remain fixed. “The implementation of the business model rarely goes as originally planned by managers, warns Fabrice Imbaultmanaging director ofA Plus Finance, a management company specializing in investments in SMEs. Development can happen faster or slower than expected.”

Invite investors

Therefore, adjustments are likely to occur a year or two after creation. “In some cases, after the start-up phase, the company does not get a positive return from the market”, says Fabrice Imbault. Major changes are then necessary: ​​modify and/or rethink the product and service offering, redirect the target customer(s)…

But more generally, changes of business model rather, they are associated with a slower increase in the production of goods or services and/or delays in marketing. A new round of the table is often necessary. “If the business plan is respected, but if delays have occurred, it is possible to encourage historical investors or new investors to take their time to bring in revenue”, elaborates Fabrice Imbault. On the other hand, if the market reaction is very positive, new funding may also be needed to speed up marketing, to produce more.

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And this all the more as the young shoots have to go faster and faster in their development. “Digital and Internet-related projects often have fewer technological entry barriers. The initial stakes can be quite low, however, young shoots must very quickly saturate the market, go international to prevent the “emergence of competitors”, notes Michael of Lempdesventure capital managing partner at Omne’s capital. This again assumes that new collections are called for.

A determined management team

In all these scenarios, the incumbents are generally ready to kick back. “The first criterion for selecting a project is the management team, which generally must be of good quality, motivated and deliver a new product and/or service”, continues Fabrice Imbault. Capital providers therefore rely on it. “Investors know when they commit to a project, a team, that they may be asked for several consecutive border rounds”, says Fabrice Imbault.

Know how to anticipate

If, finally, the question and/or the adjustment of the business model is part of the mandatory passages of the creation of a company, it is a fact that the entrepreneur must be prepared for it. The latter must show relative flexibility. For this he can be accompanied. “The role of a company like ours, which finances start-ups, is precisely to write the various possible changes to the business model. In our discussions with the management teams, we anticipate that action will have to be taken in case of delays linked to commercialization and/or marketing”, explains Fabrice Imbault.

These discussions are shared with all the investors attending the various fundraising events and are likely to reassure them. “Investments in start-ups are made in several stages; they validate the strategy of the management team, regardless of whether it fits into the original business plan or not. This progressiveness is likely to reassure all stakeholders”, concludes Michel de Lempdes.



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