Bitcoin Mining Business Plan Template
If you want to start a bitcoin mining business or expand your current bitcoin mining business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of bitcoin business plans.
The following bitcoin business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want
Bitcoin Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new bitcoin mining business located in [Location]. It is run by [Founder’s Name] who has been mining bitcoin for [X] years. He established this company after deciding to pool his resources with other miners to increase the chances of successfully mining bitcoin. [Company Name] currently has ten mining rigs and three miners in the pool. In the future, the company will be open to bringing in more miners for a membership fee.
Products Served
[Company Name]’s only goal is to mine bitcoin. All miners in the pool will work towards this goal and all profits earned will be divided equally amongst pool members. Future miners who wish to join the pool will have to pay a membership fee.
Customer Focus
As a bitcoin mining company, [Company Name] does not have a traditional customer base. The company only focuses on making sure the pool is mining enough bitcoin so everyone can make a profit. The pool currently has three miners but is open to expanding and bringing more on board.
Management Team
[Company Name] is led by [Founder’s Name] who has been bitcoin mining since 2015. He has made $100,000 in profit through mining bitcoin and is eager to expand his business. He recently connected with two other local bitcoin miners and they all decided to pool their resources together. [Founder’s Name] also holds an MBA from [University] which has given him the education and expertise to run a business.
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- Bitcoin mining is a very popular industry and there is incredible demand for more bitcoin mining pools.
- The management team has a track record of success with bitcoin mining.
- Bitcoin mining businesses have a proven track record of success throughout the world.
Financial Highlights
[Company Name] is currently seeking $400,000 to launch. Specifically, these funds will be used as follows:
- Location design/build: $50,000
- Equipment purchase and upkeep: $250,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new bitcoin mining business located in [Location]. It is run by [Founder’s Name] who has been mining bitcoin for [X] years. He established this company after deciding to pool his resources with other miners to increase the chances of successfully mining bitcoin. [Company Name] currently has ten mining rigs and three miners in the pool. In the future, the company will be open to bringing in more miners for a membership fee.
[Company Name]’s History
[Founder’s Name] incorporated [Company Name] on [date of incorporation] as an LLC. The business is currently being run out of [Founder’s Name]’s home, but once the lease on [Company Name]’s office location is finalized, all operations will be run from there.
Since incorporation, the company has achieved the following milestones:
- Found a business location and signed a Letter of Intent to lease it
- Developed the company’s name, logo, and website located at [website]
- Determined equipment requirements
[Company Name]’s Products/Services
[Company Name]’s only goal is to mine bitcoin. All miners in the pool will work towards this goal and all profits earned will be divided equally amongst pool members. Future miners who wish to join the pool will have to pay a membership fee.
III. Industry Analysis
Cryptocurrency has completely transformed the finance industry and economy in a very short amount of time. Just a decade ago, few people understood cryptocurrency and even fewer establishments accepted it as a form of payment. Now there are millions of crypto-miners around the world and cryptocurrency is a widely accepted form of currency.
However, while a few years ago a home computer was enough to mine bitcoin and other cryptocurrencies, today the market is too competitive for normal computers to generate a meaningful profit. Therefore, there is increasing demand for more powerful equipment and for bitcoin mining farms and pools to form so miners can pool their resources together.
Despite what the critics may say, bitcoin and other cryptocurrencies are here to stay. According to research the cryptocurrency industry was valued at $4.67 billion last year and is expected to expand at a compound annual growth rate (CAGR) of 12.5% over the next five years. This is a very high growth rate and shows that mining bitcoin is still a very profitable business.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the miners that join its pool to mine bitcoin.
Customer Segmentation
The only customer segmentation that [Company Name] will focus on is fellow bitcoin miners who are interested in joining our mining pool.
V. Competitive Analysis
Direct & Indirect Competitors
The following bitcoin mining companies offer direct competition to [Company Name].
Riot Blockchain
Riot Blockchain is one of the top bitcoin mining companies in the world. Located in Rockdale, Texas, the company operates over 30,000 mining rigs and had a total of 4,884 BTC tokens in reserve at the end of 2021. In addition to running its own facilities, it also offers services and support to other large-scale mining businesses so they can take advantage of Riot’s proprietary infrastructure and establish their own farms.
Marathon Digital Holdings
Marathon Digital Holdings is another major competitor in the world of bitcoin. A former uranium and vanadium exploration business, this bitcoin mining company reportedly had reserves of 8,115 BTC at the end of 2021. Marathon has facilities located in South Dakota, Nebraska, Montana, and Texas and is committed to powering its facilities with renewable energy in the near future.
Cipher Mining
Cipher is the third major competitor of [Company Name]. It is a fast-growing firm and has recently built its first facility in Alborz, Texas. It is expected to be a very successful firm, as it recently acquired 27,000 and 60,000 miners from Bitmain Technologies and SuperAcme Technologies respectively.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Management: The management team has extensive bitcoin mining experience which will be attractive to new bitcoin miners.
- Track record of success: [Founder’s Name]’s success with bitcoin has led to $100,000 in profits.
- Community: [Company Name] is a small bitcoin mining pool that offers community and support to new miners. This community is hard to find in larger firms that have thousands of miners.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the company’s unique value proposition:
- Extensive bitcoin experience
- A track record of success
- A welcoming community of fellow miners
Promotions Strategy
[Company Name] will target other miners interested in joining a bitcoin mining pool. [Company Name]’s promotion strategy to reach these potential miners includes:
Website/SEO
[Company Name] will invest in developing a professional website that displays all of the features offered by the company. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Social Media
[Company Name] will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographic.
Word of Mouth Marketing
[Company Name] will encourage word-of-mouth marketing from loyal and satisfied miners.
Advertisement
Advertisements in local print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their other miners. The company will advertise itself in popular magazines and news dailies.
Direct Mail
[Company Name] will blanket neighborhoods in the area with direct mail pieces. These pieces will provide general information on [Company Name].
Billboards
[Company Name] will secure a billboard in the area that captures the attention of residents. The billboard will draw attention to the new business and its service offerings.
Pricing Strategy
All profits made through mining will be shared equally amongst the pool members. New miners who sign up with the pool will pay a 2% fee.
VII. Operations Plan
Functional Roles
[Company Name] will need to fulfill the following functional roles to execute its business plan and ensure the company’s success:
Service Functions
- Mine bitcoin
- Purchase and maintain mining rigs
- Attract new miners
Administrative Functions
- Social media management
- Website management
- Bookkeeping
- Marketing
- Other general administrative functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been bitcoin mining since 2015. He has made $100,000 in profit through mining bitcoin and is eager to expand his business. He recently connected with two other local bitcoin miners and they all decided to pool their resources together. [Founder’s Name] also holds an MBA from [University] which has given him the education and expertise to run a business.
Hiring Plan
[Founder’s Name] will serve as the Owner and CEO of [Company Name]. He currently has two other employees that operate as bitcoin miners. [founder’s name] will hire another employee to help out with the administrative tasks. Over time, the pool will take on new miners that wish to join [Company Name].
IX. Financial Plan
Revenue and Cost Drivers
[Company Name] will gain its revenues from mining and selling bitcoin.
The primary cost drivers will include the cost of power consumption, the cost of equipment, employee salaries, and the lease.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $400,000 to launch. Specifically, these funds will be used as follows:
- Location design/build: $50,000
- Equipment purchase and upkeep: $250,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
