The whitepaper is becoming old news. Nowadays, blockchain startups require a bulletproof business plan to succeed in raising funds.

Here are the blockchain business plan best practices that you and your startup should follow when trying to raise funds from blockchain investors. We have also attached a template that you can use to help you get started with your blockchain business plan today.

The Business Plan Versus the Whitepaper

Popularized in the cryptocurrency sector following its use by Satoshi Nakamoto in his introduction of Bitcoin to the world, the whitepaper has become one of the many distinctive aspects of the blockchain industry. Now, all developers looking to build a credible reputation will publish a whitepaper before conducting a token sale or reaching out to VCs for funding.

In contrast, the business plan is rarely seen in the cryptocurrency sector. As a result, it may be easy to conflate or equate the two documents. The distinction between whitepapers and business plans is further muddled because at first glance it seems like they both provide information relevant to the project in a similar manner.

However, it is important to make a distinction between the two documents.

A whitepaper focuses on the technical details of the innovation being developed by the team while a business plan focuses on the plans and financial projections for the project as a whole.

Overlapping Information, But a Different Focus

Another way to look at it is that a conventional business plan is designed to focus on the market conditions in which the project will be operating. Additionally, the document also explores how garnered knowledge can be leveraged in the most advantageous manner. A business plan also efficiently explains the gap in the market, focusing mainly on the principles of the company, and how it will support the industry by covering specific requirements of a particular market.

The whitepaper hones in on the technical attributes of the platform in development. The whitepaper explains why the platform is being created and how it aims to solve an existing problem. The whitepaper will likely involve the mathematical proofs of the technology in question, as well as a thorough breakdown of the crypto economic rationale of the network. It is important to note that a whitepaper is specific to a platform or DApp, whereas a business plan covers an entire company and its interests or holdings in their entirety.

As mentioned earlier both the business plan and the whitepaper may cover similar topics. Examples of these include the problem statement, the proposed solution and a look into the market. However, the two papers will take on different scopes due to their focus.

To better explain the difference, consider the blockchain software development firm Block One that is developing the EOS platform. A whitepaper created for the EOS platform would focus on the network while the business plan for Block One would involve EOS but would also include other projects being developed by the company.

How to Write a Good Business Plan

Blockchain ventures differ in many ways from traditional businesses. As a result, a blockchain business plan will deviate from a traditional business plan and require additional content pillars. A strong blockchain business plan needs the following eight sections:

  1. Executive summary
  2. Business description
  3. Market
  4. Competitive advantage
  5. Management team
  6. Token mechanics
  7. User adoption
  8. Funding and financial projections

The executive summary helps the reader quickly understand the position of your company and what it needs to achieve its projections. This section also mentions the most important or unique innovations belonging to the firm. It is best to write this part last as you will have a realistic view of the business as a whole at that point.

The business description is the portion of the plan that covers company information. It serves to instill confidence in your readers as it shows dedication to the business. If your firm plans to develop a number of platforms or DApps that fall in different industries, such as gaming and finance, then it may serve you to briefly explore the essential facts about the relevant industries.

Remember to keep this portion as concise and to the point as possible. You are more likely to lose your reader or would-be investor with long-winding sentences. Conversely, if you fail to provide all the necessary information required in this segment, you run the risk of appearing unprepared and careless. Therefore, it is important to strike the right balance.

A good guideline is to make sure to include data on the industry, how your company aims to address a certain problem, and areas where you see the potential for growth. It is also important to delve into any factors that may affect your company, either positively or negatively. Other details to be covered in this portion are the mission and vision of the company and the history of its creation.

The market section follows the business description. In this part, it is important to delve deeply into the market. While you may have touched on the market conditions briefly under the business description, this segment is best suited to thoroughly cover all relevant aspects of the market. This includes the value proposition of your company, a look at your competition, and the purchasing habits of your ideal customer.

The market analysis helps the business (and potential investors) understand the cost of getting and keeping a customer. This section is important for uncovering how to optimize profits. The market analysis is also the best place to make a case for how your company is superior to the competition.

In the competitive advantage section, you need to highlight the quality of your technology and how it improves on or is superior to existing offerings. Additionally, you need to share what lead time advantage your business has over your competitors.

In this section, you can also share information about the contacts and networks you have that you can leverage to ensure that your business is on the best possible path to success. Having an “in” with the right people can go far in the digital asset industry given its relatively small size.

The management team section allows you to flaunt your team. A good team conveys seriousness and lets your potential investors know they can trust you with their money. While it does help if your team has prior experience on blockchain projects, a fairly green team can still instill confidence. If your team is fairly new, consider bringing in advisors who can contribute with insights or advice. The advisors are best suited if they come with significant experience in a project with good standing in the market.


Additionally, it is important to show your team is adequately suited to handle all aspects of a business. Show that your team is varied in terms of human resources. Demonstrate that you have good developers to handle the technical aspects of the business while also showing you have professionals with the business acumen and experience to help your business optimize profits and avoid any legal issues.

The token mechanics section is the part of the blockchain business plan that is not present in “traditional” business plans. In this section, you need to explain how your token will work, what value-add it will bring and how the token supply will be managed. Additionally, you need to showcase how you will ensure that the network will become decentralized. It is important to reach a degree of decentralization if you want your blockchain network to succeed. Also, you will need to highlight how you plan to succeed at listing your token on reputable exchanges.

The next section is user adoption. This segment is heavily informed by the market. Once you have all the relevant data and statistics, then you are able to devise a workable sales and marketing strategy targeted at generating user adoption. In traditional business plans, this section will include the price point for the product or service in question. However, because the profit model in many blockchain-based platforms or applications varies widely, it is important to specifically include how the business plans to make money.

The user adoption strategy should also cover how the business plans to onboard new customers. One of the major challenges facing blockchain-based businesses is the lack of users. The technology is fairly new and as a result, many would-be customers are yet to interact with it. As such, it is important to lay down a well-thought-out marketing strategy. Consider an extensive online advertisement and PR strategy as it is likely to get you the most eyeballs with a diverse background.

The funding requirements and financial projections portion of your business plan is essential. It is here where you quantify how much capital you would need to bring your idea to fruition. It is important to give hard numbers, backed up by the relevant calculations, of course. If you are unsure of the exact figures, then you can leave a little leeway by providing a range of figures.

It is important to mention that your funding is obviously heavily affected by the method you chose to utilize. In the blockchain and cryptocurrency space, there are three main funding avenues. These are:

  1. Venture capitalists
  2. Self-funding
  3. Token sales

If you are looking to engage with VCs, then this section is very important. If you are looking to conduct a token sale, then it is important to put together an exhaustive whitepaper that is best suited for the crowdsale space.

Self-funded projects also need to create a good funding section. While you may not be looking for external capital, you will benefit from creating a plan for the funds you do have. Additionally, having a thorough funding section ready in your business plan means you can present the paper to potential investors if you do decide to seek externally sourced funds.

Also, the development timeline should be included in the funding section. It is important to show your investors that you have time-bound plans for the money you are looking to get. Things to include in the timeline include:

  • Acquiring working space
  • Applying for patents
  • Hiring human resources
  • Developing technologies

Lastly, a business plan requires financial projections. It is arguable that this is one of the most essential portions of a business plan. Here, you must use all available data relevant to the blockchain industry and your product/s to build models of what the future of your company may look like.

To build these models, use any past success your firm may have had. You can also use testimonials from the market testing you have conducted during your market analysis. If your business plan is able to show a clear trajectory for growth using financial projections, it may propel your project to greater heights.

Is It Worth the Effort?

Writing a plan for your blockchain-based business will be a time-consuming affair. Additionally, you may have to incur extra costs to get a professional who can help you draft one. As a result, it is easy to question the importance of the document, especially if you are concurrently working on the whitepaper.

A Babson College study found that good business plans did not necessarily correlate to the most successful companies. Moreover, Babson researchers also found that business plans are essential only when the project is actively looking for funding.

If you are looking for VC funding, then it seems like a no brainer to create a good business plan.

However, a business plan is important to focus the business and hone in on the niche that is most likely to bring success. These conclusions that can only be reached through the in-depth business-focused introspection that happens when creating a business plan.

Fill out the form below for an easy-to-follow template for creating an effective and persuasive business plan for your blockchain company.


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