How are business plans with low investment different from those that seek a substantial capital infusion? On the surface of things, they are very much the same. Showing how you plan to allocate the capital, the theoretical percentage of the company you'll relinquish in exchange for it, and the prevailing P/E ratios that apply in your industry are all "standard fare" and should be included no matter how modest an investment you intend. An investor giving up $75k for your business won't necessarily have different expectations about ideal performance, governance, or return than one investing $10M. Knowing that, any business plan you create should have cogent answers to questions like the following:
• How will the seed capital be applied, by category?
• What is the projected break-even point?
• How much money will you allot for ongoing OpEx and how does that run as a percent of sales?
• Who are the businesses most similar to yours?
• The marketing plan is also important; how will you use investors' dollars to get exposure?
These questions are not the only germane ones but they are some of the points that an investor is sure to look for. You need to have an analysis underway of the competitive comparables and their sales and expense metrics as best as you can estimate them. Use this information to inform your own market analysis and financial pro forma. The latter should be a five-year model that shows your estimates revenues and includes a profit and loss statement, balance sheet, and cash flow snapshot for each year. A monthly breakdown of the first year is also important, no matter how low an investment you seek. MasterPlans can assist with the business plan for any level of investment. Call a consultant today at 877-453-2011.
