Blockchain services are used by companies in almost every industry and niche. They’re used to help companies organize and store their data, manage their projects and finances, and take charge of all the information that runs through their company.
This is why running a blockchain business is considered highly profitable, and more and more entrepreneurs and startups are focusing their attention on it. A study even showed that the global blockchain market size will be “worth upward of $60 billion in 2025, representing a 69.4% compound annual growth rate.”
A blockchain startup can be a success, but only if it’s well thought out. A strategic approach to launching a blockchain business requires writing a solid business plan that will have all the essential elements. One of those key elements is a financial plan.
If you’re not sure why you need a financial plan for your startup or how to write it, this article will teach you.
What is a Financial Plan for a Start-up?
To be able to start a business and run it successfully, you need to be well-prepared for the challenges ahead of you. Naturally, one of the biggest challenges is handling your finances and making sure your business is stable and profitable from day one.
But, this is something you can’t just hope for.
Instead, you need a well-researched and written financial plan. This plan will help you make major decisions and use data to predict how your business will develop over time. It needs to cover essential issues such as:
- Initial investment and funding
- Your sources of income
- Sales and profit predictions
- Expenses
- Sustainability
That means that a financial plan is a written document that provides a detailed financial analysis and summarizes all the aspects of a start-ups financial stability during the initial stages of its existence.
You’ll use it to see whether your start-up idea is viable and whether you should do it or not.
How to Write a Financial Plan for a Blockchain Start-up?
Now that you understand that you need a financial plan for any type of start-up, including blockchain, it’s time to learn how to write it.
We’ve put together a list of all the elements you need to include, chronologically, to make your financial plan credible and reliable. Here’s how to write a financial plan for a blockchain start-up.
1. Initial Set-up Costs
The first thing to consider and cover in your financial plan is the set-up cost for your blockchain start-up. You need to think and calculate what’s the initial budget you’ll need to cover to get everything you need for launching the business.
That includes:
- Registration, licenses, permits, and fees
- Equipment and tools
- Renting a workspace
- Advertising
- Day-to-day expenses before making a profit
- An emergency fund for unexpected situations
Do the math and calculate a rough prediction of what the initial set-up cost will be.
2. Fixed & Variable Costs
Once your blockchain business is up and running, you’ll be facing different types of expenses every month. Some will be fixed while others will vary depending on your monthly goals or activity.
Those costs may include:
- Salaries and benefits
- Taxes
- Rent
- Insurance
- Website hosting
- Utilities
- Office supplies
List them all to calculate how much money you’ll need to keep your business up and running.
3. Sales & Earnings
Now you need to focus on the profit you’ll be making by offering different types of blockchain services to your target audience. This is the trickiest part of writing your financial plan since you don’t have any previous data to rely on.
You could research other businesses, and try and attain their business information concerning sales and earnings. Otherwise, you’ll just be making an optimistic assumption about:
- The pricing for your services
- Sales forecast and targets
- Profit margin
- Estimated gross margin
So, do your best to research your competitors, Then, determine what’s your position on the market and how you’ll fit the existing picture. If you need help with doing research, check out GetGoodGrade. They’re a writing company where you can hire writers who can do this job for you.
The more information you gather, the better sales and earnings forecast you’ll write.
4. Funds & Start-up Capital
Once you get the idea of the amount of money you’ll need to have and earn as your business grows, you’ll be able to discuss the initial start-up capital and funding. This section will help you provide funds for your business and convince investors to invest.
So, define how much money you’ll need or get from:
- Personal savings or loans from family members
- Banks
- Investors
They need to see you believe in your idea and are taking risks just as they are.
5. Sustainability
Finally, you need to predict when your blockchain business is going to hit a break-even point and start earning more than what it’s spending.
You’ll show this in your financial plan by explaining:
- Your unique value proposition
- Your business goals and objectives
- Your strategies for acquiring and retaining customers
Explain your expansion strategy and provide the facts and data to support it.
Final Thoughts
It’s clear that you need a financial plan if you want your blockchain start-up to set off to a great start. It will help you analyze your situation, prepare for all the challenges, and make the right steps along the way.
So, use the guide we’ve shared above to write an informative and reliable financial plan for your blockchain start-up.
