Wondering how to treat the business plan timetable? The timeline that a business will follow, particularly in start-up mode, is largely conjecture. You can set forth a rough estimate for how long you'll spend getting set up so that your start-up summary is solid, but most bankers and investors will understand that there are variables in the timeline that you cannot control. For instance, if you can't begin shipping a product until a production run finishes, but it's unclear how many months that first run will take, you will have to guess at the number of numbers your business is pre-revenue. The important factor is that you account for this potential lag in your financial model – you shouldn't be at risk of running out of cash no matter how long a development stage takes. Also for your timeline, consider these points:
• How long will start-up last?
• How long will it be before your first products sell?
• At what point will the business break-even?
• What are new employees required?
• When can you repay your loans in full and/or offer your investors an appealing exit?
The question of employees should be outlined in a personnel plan that shows who you need to hire, when they come aboard, and the rate you intend to pay them (factoring in raises and/or cost of living adjustments over time). You should also make sure that part of your financial model pinpoints the break-even moment, as investors and bankers alike will look for this information. Above all, remember that the timeline is flexible – just ensure that you've budgeted for enough cash on hand to survive the fluctuations you expect to encounter. Want to bounce these scenarios off a professional, or have your plan written by experts? Call MasterPlans today at 877-453-2011.
