Entrepreneurship: how to write a good business plan?

This article is from Management magazine

Let’s be frank: no one will ever read your business plan from A to Z. Neither bankers, nor funds, anyone. “Investors get so much that they can’t study them all. At best, they fly over them ”, assures a young designer. But that’s no reason to skip this step. “At the start of a creation project, writing one is even essential”, insists Jérôme Masurel, director of the Parisian accelerators 50 Partners.

Indeed, working several months on this thirty-page document allows entrepreneurs to properly measure the business they are embarking on: after rigorous analysis, will the turnover of their company be closer to 1 million or 10 million euros? And is it worth spending insane energy just for a million? Before reaching the conclusion, the dossier is structured around five parts, each detailing one of the ingredients of your success.

The market

This is the first point to be addressed. Catering, household products or funeral directors, outline in a precise way 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 expenditure per burial (3,815 euros), annual growth (3%), etc. In the sector, the data available are abundant. It helps build solid assumptions, ”she says. Quite 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 its exact scope of activity ”, continues Jérôme Masurel.

The strategy

This is the paragraph where the founder makes investors want to finance him. “In Great Britain, Denmark and Portugal, new types of places dedicated to catering are exploding, but not yet in France. However, it will not be long. So there are places to take now, ”says Geoffroy Marticou, co-founder of Grand Scène, a food court in Lille. An argument that hit the mark since between fundraising, loans and subsidies, 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 matters a lot because the financiers rely on a duo or a trio of complementary profiles”, underlines Agathe Chapelais, director of incubator within the accelerator EuraTechnologies. Write a text in which 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 led large-scale projects; and your shoulders are strong enough not to give up in six months.

Thus, Marie Salmon is completely legitimate at the head of Alanna because, before launching her start-up, she managed 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 one who raised 200,000 euros in pre-seed, partly thanks to her CV.

The production

On 4 or 5 pages, describe your product. Is it a good or a service, is it offered for sale in stores or by subscription on the Net? Give details. “If you deliver, say for example how much logistics cost you each time and how you finance it”, advises Agathe Chapelais. Also plan a paragraph on your competitors.

All in all, this painstaking work will allow you to see 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 his skin, in 2016, if it had measured that it would suffer as many thefts ”, swears Jérôme Masurel.

The forecast

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

To do this, list all of your costs (fees, rents, salaries, taxes, etc.) and determine your “breakeven point”, that is to say the turnover beyond which you start to earn money. Above all, “the income statement is an essential management tool, underlines Nicolas Simon, the co-founder of La Marque en Minus (household products sold online). Updated every week, it indicates the minimum number of sales to be made to avoid falling into the red. It’s invaluable for managing cash. ”

With Maxime Deguine, his partner, they added two tables: an annual income statement and an Excel file detailing 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 verify that we understood our subject. ” And be confident enough to grant them 2 million euros. To the best of my mind …

Marianne Barbier and Geoffroy Marticou, founders of Grand Scène

“Before opening our food court bringing together 10 restaurants and 2 bars in the former premises of Galeries Lafayette, in downtown Lille, we spent six months drafting our“ data room. ”This electronic document of 50 pages includes our strategic vision, our cost estimate, our architecture which carried out the work, the commercial lease and the administrative documents of the company, the logo, etc. All these elements allow our interlocutors to imagine our activity in a very concrete way. This data room helped us convince banks and investors to bring us 4 million euros. “

grand-scene.com

The 8 key points

Your forward-looking business plan should include at least the following elements.

• A presentation of your course and your motivations.
• The company’s resources: its buildings, its equipment, future investments.
• Human resources: the amount of remuneration and social charges for the manager and employees.
• WCR (working capital requirement): the expenses to be carried out while awaiting the receipt of money.
• The needs to be financed: investments, stocks, start-up costs (advertising, training, etc.), WCR.
• Resources: your contribution, aid received, bank loans.
• The result: turnover less purchases, overheads, 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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