An interesting possibility for professionals who want to operate as freelance is the role of business planning for startups.
Why the need for a business consultant for startups?
Startups are small innovative companies with high potential *. However, these companies require careful management, and because they are small, they rarely possess all the necessary internal resources regarding managerial expertise.
A professional with significant experience in strategic functions such as marketing & sales, finance, or strategic consulting, can offer himself on the market as a valid support for these entrepreneurs. Certainly, the greater the affinity between the sector in which the entrepreneur operates (e.g., information technology, engineering, textile fashion) and the expertise gained by freelancers, the greater the appeal of the service offered by the latter. They are welcome for professional technology companies with a technical base. As far as the financial aspect is concerned, specialization certainly has less weight.
What does a business consultant do for startups?
The business plan consultant is very useful in the startup phase and can provide later support to improve the company’s management.
Intervention in the initial phase of the startup.
The business consultant helps the entrepreneur refine the business plan * to maximize the startup’s potential. The business plan is essentially an analysis of the feasibility and profitability of the business strategy and the possible risks. This assessment is initially made by the entrepreneur when conceiving the startup. However, the skills and experience of the business consultant can provide greater concreteness and a more realistic picture of the potential of the new company.
Feasibility, profitability, and strategic analysis.
Resources:
Material / financial/professional resources needed: particularly accessible financing mechanisms (banks, venture capital, crowdfunding).
Strategy and market:
What is the strategy with which the company places itself on the market, and what is the economic return that can be expected: the competitors and the potential market of the new idea (product/service/business model) are then evaluated, and the one accessible. Risk analysis: different scenarios and profits associated with different scenarios.
Intervention on an already consolidated activity.
The business consultant can help the entrepreneur even when the activity is already consolidated in terms of strategy and business model: in this case, the intervention is made on organizational aspects (for example, internal procedures and human resources, selection of suppliers for outsourcing). In addition, the company may need to review its strategy or evaluate a strategic investment, such as a major product change.
On what basis is the business consultant paid, and what is its real added value for the company?
Like all consultants, the business consultant who works for a startup is paid based on the projects implemented. There will be an initial deposit plus a balance agreed upon at the end of the collaboration. Salaries vary depending on the service’s sector, complexity, and specialization. The professional can also become a partner and therefore share the business risk.
In practice, the business consultant carries out an assessment based on widely known and shared criteria in the business world, with a concrete added value that largely depends on the specific knowledge of the sector.
Insights
* Startup companies
These companies are born from ideas that are often radically innovative, on the individual initiative of an entrepreneur or a few partners. Initially, they are very small in size, but simultaneously, due to the originality that distinguishes them, they promise rapid and profitable growth. Therefore a startup can be defined as a bet the entrepreneur makes on an idea (a technology, an innovative service, etc.) and his managerial skills.
The business plan
The business plan, as already discussed, is a preliminary assessment of feasibility and profitability.
Here we see in more detail the points that make it up:
1) Description of the activity:
What is the “value chain,” the added value created to suppliers, and what are the characteristics of the product/service?
2) Vision and mission of the company:
What is the idea behind the company, the founding values of the activity undertaken, and the objectives set?
Once the objectives have been set, an analysis of the external environment (competitors, suppliers, customers, etc.) and internal (resources and skills) is carried out: in practice, the competitive advantages are highlighted.
3) Marketing plan:
Analysis and evaluation of the total potential market and the market available for the product/service, forecast future demand.
4) Operational plan:
What are the key processes of the company, evaluation of making or buying options in the value chain, and general organization of the company? What are the resources in terms of tangible assets and intangible assets, raw materials, and key suppliers?
Approximate assessment of the initial investment required.
5) Human resources:
Personnel management and different roles.
6) Financial plan:
What are the resources needed over time, the sources of funding, and how to obtain funding? Possible sources:
a) Debt: banks, subsidized government funds.
b) “Financing in kind” through sector incubators.
c) Investments: venture capital and business angels participate in the company.
What is the profitability expectation for the future:
a) Cash-flow projections in the future.
b) Sensitivity analysis: quantitative analysis of the variables that influence profitability. It is, therefore, possible to elaborate on various more or less optimistic scenarios.
If you are looking for the perfect consultant for your idea, here are our best business plan writers.
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