Let’s be honest: no one will ever read your business plan from A to Z. Neither the bankers, nor the funds, no one. “Investors get so many that they can’t study all of them. At best they fly over it ”, assures a young designer. But that’s no reason to skip this step. “At the beginning of a creative project, writing one is even essential”, insists Jérôme Masurel, director of the Parisian accelerators 50 Partners.
Indeed, working for several months on this thirty-page document allows entrepreneurs to correctly evaluate the business they are undertaking: after a rigorous analysis, will the turnover of their box approach 1 million or 10 million euros? And is it worth spending crazy energy for just a million? Before reaching the conclusion, the file is structured in five parts, each of which details one of the ingredients of your success.
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This is the first point to address. Catering, household products or funeral directors, precisely delineate your market segment and its size. Thus, with Alanna, a social platform for bereaved families, Marie Salmon has launched this year in the funeral sector, estimated at 2.5 billion euros. “Number of deaths (600,000 per year), average cost per funeral (3,815 euros), annual growth (3%), etc. In the sector, the data available are abundant. It helps to build strong hypotheses “, he says. Very often, however,” the indicators do not exist. It is up to the creator to gather information from his future competitors, suppliers and partners and calculate their exact scope of activity “, continues Jérôme Masurel.
This is the paragraph where the founder makes investors want to finance him. “In Great Britain, Denmark, Portugal, new types of restaurants are exploding, but not yet in France. But it won’t take long. So there are places to visit right now “, says Geoffroy Marticou, co-founder of Grand Scène, a food court in Lille. A topic that has hit the mark since between fundraising, loans and grants, the young CEO who aims to open several other addresses in France has raised € 4 million.
“This step matters a lot because lenders rely on a duo or trio of complementary profiles,” says Agathe Chapelais, director of the incubator within the EuraTechnologies accelerator. 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 conducted large-scale projects; and you have strong enough shoulders not to give up in six months.
Thus, Marie Salmon is quite legitimate at the helm of Alanna because, before launching her young shoot, she managed the French branch 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”, she assures her that she has raised 200,000 euros in pre-seed, also thanks to her curriculum vitae
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On 4 or 5 pages, describe your product. Is it a good or a service, is it offered for sale in a shop or by subscription on the Net? Give details. “If you make deliveries, say for example how much the logistics cost you each time and how it finances it,” advises Agathe Chapelais. Also include a paragraph about your competitors.
In total, this meticulous work will allow you to imagine your business in a concrete way. “By projecting oneself into reality, any problem can be anticipated. For example, Chic Types (men’s clothing) could have saved his skin in 2016 if he had measured that it would have suffered so many thefts ”, Jérôme Masurel swears.
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This is the quantified part of your business plan. It occupies 4 pages and as many tables. “If your market is stable, like the catering market, with known margins and growth rates, your three-year revenue assumptions will be realistic,” explains Jérôme Ledig, chartered accountant and president of Azure’s In Extenso Côte. 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 breakeven point ”.
To do this, list all your costs (expenses, rents, salaries, taxes, etc.) and determine your “break-even point”, which is the turnover beyond which you start earning. 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, it indicates the minimum number of sales to be made in order not to fall into the red. This is valuable for cash management. “
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 had learned our subject ”. And be sure enough to give them 2 million euros. On good terms …
Marianne Barbier and Geoffroy Marticou, founders of Grand Scène
“Before opening our food court which brings together 10 restaurants and 2 bars in the former premises of the Galeries Lafayette, in the center of Lille, we spent six months writing our” data room “. This 50 page electronic document includes our vision. strategic, our budget, our architecture that carried out the work, the commercial lease and administrative documentation of the company, the logo, etc. banks and investors to provide us with 4 million euros “.
The 8 key points
Your interim business plan must include at least the following elements.
- A presentation of your course and your motivations.
- The means of the company: its buildings, its equipment, future investments.
- Human resources: the amount of salary and social security contributions for the manager and employees.
- WCR (working capital requirement): expenses to be incurred pending the arrival of cash.
- Need for financing: investments, inventories, 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 does not – your forecasts, in terms of free cash flow.
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