Most clients desire a copy of a business plan we wrote to verify credentials. The request puts us on the spot. Business plans contain privileged information on a company's products. It has operational information that competitors can learn from. The information could then be used to make strategic changes and secure a competitive advantage.
We have, therefore, created a sample business plan that draws various elements from other business plans. We have taken care to remove privileged information from this sample. We have picked a blockchain venture as an example.
Business Plan Structure
The E.U. Makeover tools outline the following structure for a typical business plan:
- Company Profile
- Market Analysis
- Products and Marketing
- Operations
- Planning
- Management and Staff
- Finance
- Management summary and Appendices
The business plan structure is flexible and is customized to the specific purpose for which it is being written. Business plans prepared to seek investor interest emphasize presenting facts that indicate the venture is unique. Its operational model gives it a competitive edge over others. It has the potential for sustained business growth with little likelihood of competitors disrupting the core concept quickly.
Company Profile
Company is a ledger-based blockchain network that people will power. Company is unique in that its users own it. It will equitably distribute the profit and potential to its user participants. Its users will be spread across the globe. The millions of independent user nodes spread worldwide will create this truly segmented network.
People earn in units named X. A user earns X by installing the app, choosing when to run it, and how much space they are willing to donate when in use.
People can earn bonus X by performing additional tasks like staying on the network, being reliable, and gaining seniority. Other features that form the core of the Company's products are kept out in this sample.
These unique features will help draw users to this network.
Company technology features
The product operates as a decentralized blockchain network.
The technology makes the network anonymous, safe, and secure. There are no large corporatized mining pools. No personal identifying information is stored, and personal identification will not be required.
All data is encrypted using an algorithm. The algorithm uses portions of the users' groups' location, time, and other details to create a unique key that is virtually un-hackable.
It can store files by breaking them into pieces, encrypting them, and storing them on user devices on the network. Files are cut up, encrypted, and distributed to devices. Only the key can re-assemble the file.
Each piece is copied to multiple devices to ensure redundancy. The network can process complex equations and provide other processing power needed for analysis through a distributed node network. It makes it a super-computing network.
The mobile networks of participant users will power the network. It is an always-on network. It is eco-friendly and energy-efficient and uses a small amount of energy. It can be configured to work only when the phone is not used.
The Company business modelThe blockchain network is coming at the very early stages of the growth cycle of this technology. There is a lot of growing and evolving space ahead for this technology. The business opportunity can be leveraged with an appropriate business model.
The Company has the option to choose from multiple business models. Various models were analyzed -Subscription, Licensing, cross-selling, Advertising, Business alliance, co-creation, and customer analytics. Finally, the following two business models were shortlisted:
- Platform model: Revenues accrue from advertising or a percentage of the transactions made on the platform.
- Business alliance business model: Blockchain technology has multiple use cases. A collaboration to achieve a common business goal can be developed. The alliance may focus on cost reductions and developing new products and services.
Business Model Canvas:
Based on the suggested business models, the business model canvas for Company Innovation is enclosed below:
Key features of the Company business model
The Company network will provide a platform for not just selling cryptocurrencies, NFTs, and other crypto assets. Alliance partners will also use it to sell innovative blockchain technology-based solutions. Revenue-sharing arrangements can be worked out between Company and alliance partners.
The Company model will have features of existing Bitfury and Bisq platforms.
The Company will be a blockchain solution provider fully compliant with U.S. regulations. Secure, near hack-proof documentation is a national security need. The Company will deploy its alliance partner capabilities to provide smart, cyber-secure document solutions to the U.S. government and states based on blockchain technology. It will also offer smart contract services and NFT contracts to private entities.
Business Model Stress Test:
The test is intended to understand if the Company business model is future-proof. Changes in markets, society, and technology could impact the business model in the future.
Who will buy Company products?
- Retail investors of cryptocurrencies and other crypto-assets like NFTs
- Institutional investors of cryptocurrencies and other crypto-assets like NFTs
- Smart contracts by public and private sector entities
- Alliance partners crypto-assets and services
The Company is positioning itself as a fully compliant U.S. government network that protects the privacy of investors and other network users. Genuine investors looking to buy crypto-assets in a transparent environment will find the Company, an attractive provider. The platform also offers a full range of innovative services and offerings of its alliance partners.
Customers will get the latest blockchain use cases on a single platform. Company service guides will help customers in the deployment of these services.
Its services and assets will be priced competitively and transparently. Alliance partners' services and implementation support costs will vary with the complexity of the proposed solution. It is a transparent offer to our customers, inclusive of implementation support.
The Company's biggest investments will be network development, platform integration of alliance services and assets, and customer advisory services.
We subjected Company to a PESTLE analysis to examine political, economic, social, technological, legal, and environmental risks. Here below are the analysis results. The sample's analysis has been withheld to protect the product features' confidentiality.
We expect the Company to generate revenues from selling crypto-assets and alliance partner services from the 2nd year onwards.
Market Analysis
A Gallup study surveyed 1000 adult Americans' investment habits in 2021. Ten percent of investors polled between 18 and 49 years hold Bitcoin as of June 2021. Older than 50 investors remain cautious, with only three percent buying crypto coins. The survey further reveals that male investors are nearly four times more likely to hold Bitcoin than female investors.
Public pension funds and other big investors, including insurance companies, have also begun exploring investing in crypto assets. The Houston Firefighters' Relief and Retirement Fund announced in October 2021 that it had invested first in Bitcoin and Ethereum.
NFTs: Institutional asset managers are watching this space closely. Andreessen Horowitz venture capital fund (a16z) invested into Meta4 Capital. This Miami-based firm wants to put L.P. dollars into NFT assets. NFTs are new assets, and early signs of investor interest in these assets are visible. Investor activity in this asset class is rising rapidly. DappRadar is a source for managing NFT and decentralized finance portfolios. It noted that investors are shifting focus to NFTs away from Bitcoin and other cryptocurrencies. In the third quarter of 2021, $10.7 billion was traded.
The business potential of cryptocurrencies and NFTs is still evolving. Technology improvements in regulatory certainty will make these increasingly acceptable to a widening pool of institutional and individual investors. As new use cases emerge, new blockchain technology products will be added to the portfolio of products that can ride on the Company network.
The global cryptocurrency market reached a value of $364.5 billion in 2020. It is projected to grow at a CAGR of 60.8 percent during 2021-2026. The transparency of the blockchain distributed ledger technology is driving the growth.
Venture capital investments are also driving this growth. Banks in the U.S. are creating blockchain-based systems. These are helping their customers transact in business-to-business cryptocurrency payments.
The first Crypto ETF debuted on the New York Stock Exchange. The Bitcoin ETF allows investors to buy in cryptocurrencies. Amazon and Walmart want to recruit crypto experts to oversee their blockchain strategy.
In October 2020, PayPal announced that its customers could buy, sell and hold cryptocurrencies using their PayPal accounts. The industry is still in its infancy. It is hugely volatile. Regulation and institutional adoption will help stabilize the market. China has banned cryptocurrencies. U.S. Fed chair Jerome Powel has stated that it has no intention of banning cryptocurrencies.
The business climate around cryptocurrencies is subject to volatility. Regulatory action is having an impact on crypto products, and this overhang is integrated into the risk models of the venture.
Products and marketing
The venture's product features and details, for confidentiality, have been deleted from the Sample Plan.
The marketing plan is also specific to the Company and has been removed from the sample.
Operations and Planning:
Company network and operations can be split into three phases:
- Designing Phase
- Build Phase
- Operations Phase
Company Work Plan
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Design Phase |
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Define Company business architecture |
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Design Company network |
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Build Phase |
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Build Company network |
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Build Application layer |
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Operations phase |
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Deploy network and application maintenance team |
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Prepare sales and marketing plan |
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Build Alliance Partner network |
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Building sales team |
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Deploy Company operations team |
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Review, monitor, and evaluate |
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Company Founder and his Blockchain operations partner are spearheading the conceptualization of the Company network. The Company network concept will initially be taken to investors for seed funding.
The design phase of the project will be completed using freelance resources. We expect the design phase to conclude in a month. The Build Phase will require blockchain network and application experts.
The network and applications layer will be built under the guidance and supervision of the Company's Blockchain partner.
Company does not require full-time technical staff during the build-out phase. The Company will leverage the GIG economy and complete the build-out phase using freelancers.
Full-time staff will be required from the operations phase onwards.
Competition Analysis:
PWC reported in a late 2020 report that blockchain technology can add $1.76 trillion to the global gross domestic product (GDP) by 2030. The bulk of this addition will come from firms using the technology to avoid counterfeit products and fraudulent transactions.
According to insidermonkey.com, the top five companies using blockchain technology are:
- Square is the leader, with an H1 2020 revenue of $6.2 billion. Sixty-four percent of revenue came from the Bitcoin market price.
- International Business Machines Corporation (IBM), with an H 1 2021 revenue of $3 billion, offers various services, including transaction processing platforms based on blockchain technology. It earned $3 billion from the sector during the first half of 2021.
- Coinbase offers cryptocurrencies and cryptocurrency-backed assets on its platform. Its H 1 2021 revenue was $4 billion.
- Bitfury Group Ltd is a blockchain firm that offers pre-built bitcoin blockchain software solutions that enable companies to record and verify their transactions securely. Its 2018 reported revenues were $500 million.
- VMWare Blockchain from VMWare offers a decentralized blockchain network. It reported a revenue of $741 million. It includes other blockchain and other software as a Service (SAAS) revenues for the quarter, which ended in April 2021.
Leading companies using blockchain technology are offering crypto asset-based solutions. However, as use cases on Blockchain technology get discovered, and the capability to implement and deploy these solutions develops, the offering base of leading companies is likely to change.
There are 44 Million cryptocurrency wallet users around the globe. The number is small because of the obstacles in the path of high cryptocurrency adoption volatility, which scares the common investor away. The growth in market capitalization of crypto assets has been dizzy. These have shown an annual CAGR of over 150 percent, rising from $500 million in 2012 to $782 billion by the end of 2020.
Investopedia has analyzed the existing exchanges and has developed its preference list.
Best Overall – Coinbase and Coinbase Pro have been ranked as the best overall exchange by Investopedia. It is a Centralized Exchange. The exchange has a low fee structure simple user interface. Customers can choose to invest in a large number of altcoins. Investopedia states that Coinbase has been largely free of any controversy that has plagued many exchanges selling fraudulent coins.
Coinbase offers custodial wallets for investors and traders to store their investments. The wallets carry insurance against data breaches and hacking. Investor cash is stored in Federal Deposit Insurance Corporation (FDIC) insured bank accounts. The private keys to the account are owned by Coinbase and not by the investor.
Cash App is a peer-to-peer money transfer system. It allows users to split food, pay rent to a roommate, and shop online at a retailer that supports Cash App. It accounts like a bank account. Users can have their own Cash App debit cards. It is an easy-to-use platform that gives flexible options to use other cryptocurrency wallets. Users can invest in stocks, exchange-traded funds (ETFs), and Bitcoin. It has a mobile-first interface. Its main feature is money transfers.
It has a basic cryptocurrency investment feature. These investments can be withdrawn to their wallets. It is a feature similar to that offered by Robinhood. In the case of Robinhood, you can invest and trade in cryptocurrency, but you cannot withdraw and spend it how you wish. Wallet keys remain held by Cash App and not by the investor. Cash App only supports Bitcoin and no other cryptocurrency.
Bisq is a decentralized, open-source exchange with no Know Your Customer (KYC) requirements like Cash App. The exchange has no central point of failure and cannot be taken down. It is non-custodial, meaning only the user touches or controls their funds. It is accessible with a computer or smartphone. It offers trading in different fiat currencies like USD, Bitcoin, and several other cryptocurrencies.
The decentralized peer-to-peer characteristics lead to low trading volumes and slower transactions. People like the exchange because of privacy and freedom from government regulatory control.
Binance US: has a long list of currencies beyond the most popular digital coins. It has a strong focus on altcoin trading. The exchange was banned in the U.S. in 2019, but the Company spun off Binance US. Binance dominates the global exchange space. It makes up a significant portion of cryptocurrency trading volume daily. Binance only allows for U.S. dollar deposits by global users.
Investors can buy several cryptocurrencies with a debit and credit card. Deposits using 12 fiat currencies, including the Euro, are permitted.
Here below is a list of the most popular exchanges.
Top Cryptocurrency Exchanges
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Binance, US |
Buy and sell nearly 60 cryptocurrencies |
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Coinbase |
Buy and sell nearly 100 cryptocurrencies |
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eToro |
Trading Platform with access to 17 cryptocurrencies |
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Gemini |
Buy and sell more than 50 cryptocurrencies |
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Robinhood |
Buy and sell 7 cryptocurrencies |
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SoFi Active Investing |
Buy and sell 20 cryptocurrencies |
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TradeStation |
Buy and sell 5 cryptocurrencies |
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Webull |
Buy and sell 19 cryptocurrencies |
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Kraken |
Buy and sell 90 cryptocurrencies |
Source: NerdWallet
These exchanges offer retailers, hedge funds, money managers, and other platforms to trade in cryptocurrencies. Other services are also provided. Coinbase, for instance, offers its platform to developers, merchants, and asset issuers to build applications that leverage crypto-protocols, participate in crypto networks, and accept cryptocurrencies as payment. A majority of the exchanges are decentralized exchanges. It clearly indicates investor preference for privacy and desire to operate freely without government control.
Management and Staffing
It is a critical feature of the business plan. The information is withheld because it is sensitive and company-specific.
Finance and budget
The information is company specific and has been deleted from the sample.
References
https://www.investopedia.com/best-crypto-exchanges-5071855
https://www.sofi.com/learn/content/decentralized-exchange/
https://www.insidermonkey.com/blog/5-most-valuable-blockchain-companies-in-the-world-975048/5/
https://fortune.com/2021/07/22/average-bitcoin-investor-risk-june-2021/
https://time.com/nextadvisor/investing/cryptocurrency/future-of-cryptocurrency/
https://www.marketsandmarkets.com/Market-Reports/cryptocurrency-market-158061641.html#:~:text=%5B188%20Pages%20Report%5D%20The%20cryptocurrency,the%20growth%20of%20the%20market.