Just as the bitcoin market is continually growing to new heights, trading and exchanging with digital assets and tokens is also climbing. Specially, the fundraising model of the Initial Coin Offering (ICO) has become a hottest trend in the blockchain technology and cryptocurrency business world. In this business plan, you will find the financial projections and marketing strategies to operate a successful initial coin offering business.
Initial Coin Offering Business Plan
An ICO is an unregulated mode of crowdfunding via the use of cryptocurrencies or digital currencies. For Startups and enterprises, it has become a modern source of capital. It is based on a smart contract system where a percentage of a newly launched cryptocurrency will be sold to the investors in an exchange of legal tender or any other cryptocurrencies like bitcoin or ethereum. This section of the business plan will further describe the business model for an initial coin offering.
In an initial coin offering, investors are frequently interested to buy the cryptocoins in the hope that the project idea becomes successful after it launches. This could be transformed into a higher cryptocoin value than what they bought it for before the project was initiated. The market research given in this section will give you the strategies to position the business within its marketplace in order to run a successful initial coin offering business to get investor’s attention.
In this part of the plan the ICO operations plan will be explained. In summary, the business work like an intermediary for the initiative, ensuring transparency and reliability throughout the process. If the money raised does not meet the minimum funds required, the money is returned to the backers and the ICO is called to be unsuccessful. If the amount is met into the set period of time, the money raised is used to initiate the project. All of the steps of the process will be further described in this section.
The marketing plan section of the initial coin offering business plan clearly shows the approach to get into the industry and acquire new investors and companies interested in using the platform to obtain fresh capital for its business.
The business plan presents a market survey that helps to truly determine who the business target markets are, how to understand their needs and what they expect from the offering. From the results of the survey, the section will focus in describing and explaining the following targets: online-based and physical businesses.
In order to make the Initial Coin Offering business a successful venture, the business plan promotional strategy section will focus in these two things: attracting potential investors through a series of online advertising that educates them about the potentialities of investing in these operations and, attracting companies to educate them on the benefits of ICOs for their capital needs. As the business works through an online platform most strategies will be directed to digital marketing, but traditional market will also be featured.
The initial coin offering financial projections section will help you understand the financial dynamics of the business. The plan describes where the business gets it money from and how it will sustain itself during the next years. The financial projections section will include the major sources of revenues and expenses along with the balance sheet and cash flow forecasts.
The main source of revenue in an initial coin offering basically comes from charging companies and investors to use the online platform, along with advisory and other services.
The overhead for an ICO business is usually low as most of the company’s operations are conducted by computers. Nevertheless, major expenses would be licensing and fees for maintaining the platform, advertising, rent and utilities.