business-planWe are starting small startup. Our investor is asking us to show him all the calculations how much money do we need, all revenues predictions etc.
I don’t understand much in calculating finance but I believe there are some templates which can help me.
Do you know any?
For a small startup, typical business plan templates don’t really help you - where they come into their own is in larger operations, where the fact you have to fill in lots of numbers is genuinely useful.
If you’re pre-revenue and pre-validation, then unless you’re in a very well-defined space, all of your value creation is speculative right now. So understanding the journey to revenue is more useful than any figures you put in on the revenue side. Especially as lots of startups can’t harvest anything like the value they create as revenue until there’s traction.
The cost side is another story. And it’s typically made up of two parts: burn rate, and ignition costs.
Burn rate is the essential month-on-month cost of existing and pressing forward with your project. For most startups, this is either dominated by a set of third party costs, or by the (starvation) rations you’re paying the team. Of course, you can always make trade-offs, but some kind of baseline budget is essential.
Ignition costs are the cash outlays you make each time you push out into the market.
In the early days, these are likely to be relatively easy to quantify: e.g. what will it cost to get 1,000 people to your site so you can gather data? What you don’t know in advance is how many times you’re going to be doing these explorations before you are ready to push out hard and fast.
At that later stage, while you need to be realistic that assumptions are piling up, at this early stage you should at least have in mind metrics for the business you have in mind, plus time and cost characterizations for “big push” marketing to move the needle, together with indicators that you’re ready for another investment round.
So there’s a lot of subjectivity here, a lot of room for interpretation, and an unavoidable interplay between what you are looking for in an investor, and what your investor is looking for from an investment. This has very little to do with Excel!
So now you’re armed with, on the cost side, a burn rate and a set of ignition costs. minimum funding you should be looking for is enough to get you through time to validation (i.e. including early stage ignition), plus 3-6 months of burn rate. A pitch for a plan like that is essentially, “here’s the cost to discover the potential value in our project and team.” That’s what seed capital is all about.
However, a lot of people are going to advise that your first ask should include room for the first handful of second stage ignition activities. On the plus side of that approach is that in the significant success case, where there’s both traction and a business model that doesn’t consume cash for organic growth, the win for the investor can be huge. Against it, all other cases the additional cash will typically have yielded zero additional realisable value - that is, later stage investment could be painful for the seed investor, who may be squeezed out or locked in on poor terms.
So preparing figures in this way isn’t just helpful for you, it’s a very good way of having a “same side of the table” discussion with your investor. Having a plan is essential, though so is the insight that no plan survives first contact with the market.
To answer your question directly, a quick google search for "excel business plan template" will give you lots of options to explore.
I'd also check out Live Plan. Palo Alto Software has been providing this kind of software for as long as I can remember.
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