Posts Tagged ‘Starting new business’
How to Make a Good Business Plan That Draws in Investors
Monday, July 27th, 2009It has been proved that the recession is the best time to start a business due to myriad reasons. The main advantage is that it won’t get worse than the prevailing situation and the expenses to start up a new venture is low compared to boom. For starting a new business or improving an existing one, the entrepreneur should have a good business plan. So, what makes a business plan that stays near to perfect and attracts equity? Here are the important ingredients which makes a perfect business plan.
The Executive Summary
Write this summary last, and make sure it contains the highlights of your plan. Assume your most important readers will read only this section.
The Company
A plan for a startup describes your strategy for creating the legal entity and how the initial ownership will be divided among the founders. It should also include a table that lists startup costs and initial funding. A plan for an ongoing or already existing company should describe the legal form of the business, the company history and the business’s past performance.
What You Sell
Describe the products or services you offer. Emphasize why buyers purchase those things, what benefits they get, and what pain points they have before they buy. Show how much it costs to deliver what you’re selling.
Your Market
Describe your target market, including market demographics, market growth and trends. Include a table that shows a market forecast. Describe the nature of your industry and the competition you have.
Strategy and Implementation
Strategy is all about focus. So focus on certain target market segments, certain products or services, and specific distribution avenues. Forecast your sales and the cost of sales. Define your milestones with dates, budgets and specific responsibilities.
Management Team
Name and describe the key members on your team. Include a table that shows personnel costs. List the gaps in the management team–if any–and show how they’re being addressed.
Financial Projections
Describe your financial strategy and how it supports your projected growth. Include a break-even analysis that shows risk as a matter of fixed vs. variable costs. Include projected profit or loss, cash flow and balance sheets.
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