Let's say I have a small team of technical and creative specialists but absolutely no one with any financial knowledge/skills, and I'm in the process of writing a business plan for an Internet-based startup, which is still in its idea phase (nothing has been actually developed and cannot be without first acquiring the necessary investment).
How vague can the business plan be in regards to financial requirements, expenses, etc.?
How vital are specific financial numbers?
Basically, can a startup business plan consist entirely of the technical and conceptual aspects of the project, or does it absolutely have to have specific numbers?
If the latter, does this mean every single startup ever absolutely has to have financial specialists on board when creating its business plan? How can technical/creative specialists alone go about creating a business plan with no financial expertise or knowledge?
Any advice would be much appreciated.
Experienced and smart angel investors:
So if we (or they - I have been both entrepreneur and investor) know the numbers are wrong, why ask for them? Look at them as an intelligence test. The types of things we are looking for are the following:
It is crucially important to do a financial model. Yourself. To answer these questions. Make it really simple: revenues up top. Expenses below. How much you need in investment to cover losses. Put basic categories. This is basic addition and subtraction. If you can graduate high school, you can do basic, specific, financial numbers.
It is possible, to hire someone who will ask you these questions and then will put it into a fancy spreadsheet. It's unnecessary. Do a basic one yourself, understand every number that goes into it. Explain that it is your best guess, and how you came to it.
I have run a 48 hour startup bootcamp, where we gave teams 1 hour to do their financials, and expected something reasonable. If you give your whole team one 8 hour day, you can get a very reasonable starting point.