How to Write a Financial Plan for a Blockchain Startup?

Building a blockchain-based startup from scratch can be difficult without writing a whitepaper to use as a benchmark. Whether you already have secure financial sources or are about to present your start-up to investors and partners, consider drafting a financial plan beforehand. You will not only come across as more professional and objective, but also as someone with a clear vision for their startup. Here’s how blockchain startups can benefit from financial plans, as well as how to write your whitepaper more easily.

Reasons to Write Your Blockchain Startup’s Financial Plan

In many ways, your startup financial plan will serve as a digital marketing tool to sell investors 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 lofty dreams that are not grounded in reality. Writing a white paper to introduce your business model, products, revenue streams, and team to potential investors is a must in 2022. Here’s why writing it is a good idea:

  • Achieve your long-term business goals more easily
  • Objectively distribute each financial burden for your partners/investors
  • Make sure you don’t run out of resources due to poor planning
  • Recover operational costs faster after launch
  • Secure your team’s payroll and logistics expenses on time
  • Convince investors of your skills more easily

Break down your industry problem/solution

The most important element of any white paper is to explain exactly why your business is needed in the market. What product or service do you intend to market to customers and customers and why will they want to buy it? To answer this question, you would need to find an industry pain point that is left unanswered by other companies. You can use public information and statistics to back up your claims here or do your research to collect hard market data. Address this problem with your solution based on blockchain technology to convince third parties of the necessity of your business in the industry.

Describe your business model in detail

How exactly do you intend to monetize your blockchain start-up once launched? This is arguably the most important part of your financial plan, as funders will want to know how you intend to generate income. Recovering the initial costs of your blockchain startup should be your number one priority. Your business model will be different depending on the type of product or service you sell, as well as whether it requires recurring payments, one-time payments, etc. In the case of free applications or services, advertising and micro-transactions must also be taken into account. Be careful how you write this part of your financial plan white paper so that it is compelling.

Refer to several existing businesses as examples

A good way to prove your point in the financial white paper is to refer to companies whose models are already performing well in the market. These can be companies based on blockchain technology OR simply competing companies in which market you are about to enter. This is an important point to write about, as many of your investors will not be tech savvy enough to understand industry abbreviations or terminology. Here it is best to use concrete examples, data and benchmarks from the existing market.

Introduce your team to potential partners/investors

Your startup will only succeed if the team behind it. That’s why you should dedicate a section of your financial plan to detailing exactly who you’ve hired to join your team. Describe each member of your team in several short sentences and refer to their areas of expertise. A blockchain startup should at least have a financial expert, a developer, and a digital marketer/copywriter to handle advertising. Go from there and build your team however you see fit, depending on the type of product/service you’ll be developing and the scale at which you’ll be doing it.

Check spelling, 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 check the spelling. Having spelling or grammatical errors in your whitepaper is a huge red flag for investors and partners looking for blockchain startups to back. Use SchoolExtreme to have your white paper reviewed, along with any case studies or research papers you may have as supporting material. This will help your cause considerably, as your articles will not contain any glaring errors in writing or formatting once you send them for review. Create a shortlist of third parties to showcase your blockchain startup and be patient as it will take time to convince others of your plans.

Start your financial plan

Whether you’re funding your startup from your savings or enlisting the help of banks and investors, write a financial plan. You’ll have a better idea of ​​the resources you need to launch a blockchain startup in 2022 and ensure you don’t have to liquidate your business prematurely.

Once you have a financial plan in hand, you need to contact third parties who would be open to investing or partnering with you in the start-up. Not everyone will be willing to trust an up-and-coming CEO, but those who will are worth writing up your financial plan.

Authors biography. Jessica Fender is a writer and blogger at heroes of my college with a background in marketing and sales. She enjoys sharing her experience with like-minded professionals who aim to provide clients with high quality services.