Building a blockchain-based start-up from the ground up can be challenging without writing a white paper to use as a baseline for it. Whether you already have financial sources secured or are about to pitch your start-up to investors and partners, consider writing a financial plan beforehand. You will not only appear more professional and objective but also as someone with a clear vision for their start-up. Here’s how blockchain start-ups can benefit from financial plans, as well as how you can write your white paper more easily.
Reasons to Write your Blockchain Start-Up’s Financial Plan
In many ways, your start-up financial plan will act as a digital marketing tool to sell investors on your idea of running a blockchain-powered business. Think of it this way – no one will trust you with their funds based on empty promises and ambitious dreams which are not grounded in reality. Writing a white paper to introduce your business model, products, revenue sources, and team to would-be investors is a must in 2022. Here’s why writing it is a good idea:
- Achieve your long-term business goals more easily
- Break down each financial expense objectively for your partners/investors
- Ensure that you don’t run out of resources due to improper planning
- Recuperate operational costs more quickly post-launch
- Secure your team’s pay and logistical expenses on time
- Convince investors of your competence more easily
Steps to Write a Financial Plan Properly
Break Down your Industry Problem/Solution
The most important element of any white paper is to explain exactly why your business is necessary on the market. What product or service do you intend to market to customers and clients and why will they want to buy it? To answer that question, you should find an industry pain point that is left unanswered by other companies. You can use public information and statistics to back your claims here or conduct your research to collect concrete market data. Answer that problem with your solution based on blockchain technology to convince third parties of your business’ necessity in the industry.
Outline your Business Model in Detail
How exactly do you intend to monetize your blockchain start-up once it’s launched? This is arguably the most important element of your financial plan as financial backers will want to know how you intend to earn revenue. Recuperating the initial costs of your blockchain start-up should be your number one priority. Your business model will differ based on the type of product or service you’re selling, as well as whether it requires recurring payments, one-time payments, etc. In the case of free-to-use apps or services, advertisement and micro-transactions should be considered as well. Be mindful of how you write this part of your financial plan white paper so that it’s convincing.
Refer to Several Existing Business as Examples
A good way to prove your point in the financial plan white paper is to refer to businesses whose models already perform well on the market. These can be businesses based on blockchain technology OR simply competing businesses whose market you are about to push into. This is an important point to write about since many of your investors won’t be tech-savvy enough to understand industry abbreviations or terminology. Here, it’s best to use real-world examples, data, and points of reference from the existing market.
Introduce your Team to Potential Partners/Investors
Your start-up will only be as successful as the team behind it. That’s why you should dedicate a section of your financial plan to break down exactly who you hired to join your team. Outline each member of your team in several short sentences and refer to their areas of expertise. A blockchain start-up should at least have a financial expert, a developer, and a digital marketer/copywriter to handle advertisement. Start from there and build your team as you see fit, based on the type of product/service you will develop and the scale at which you’ll do it.
Spellcheck, Format, and Proofread your Financial Plan
Once you’ve collected all the data you planned to include in your financial plan, you should go ahead and spellcheck it. Having spelling or grammar errors in your white paper is a huge red flag for investors and partners looking for blockchain start-ups to back. Use SchoolExtreme to have your white paper proofread, as well as any case study or research paper you may have as ancillary materials. This will help your cause significantly, as your papers won’t have any glaring errors in writing or formatting once you send them for review. Create a shortlist of third parties to pitch your blockchain start-up to and be patient as it will take time to convince others of your plans.
Getting Started on your Financial Plan
Regardless of whether you’re financing your start-up from your savings or reaching out to banks and investors for help, write a financial plan. You will have a better idea of the resources you need to run a blockchain start-up in 2022 and ensure that you don’t have to liquidate your business prematurely.
Once you have a financial plan in hand, you should reach out to third parties who would be open to either investing or partnering with you on the start-up. Not all will be willing to trust an up-and-coming CEO but those that do will be worth the effort of writing your financial plan.
Author’s bio. Jessica Fender is a copywriter and blogger at https://mycollegehero.net/ with a background in marketing and sales. She enjoys sharing her experience with like-minded professionals who aim to provide customers with high-quality services.