Follow these hints to achieve success in finding financing for your new business plan:
Know Your Business
In the course of the research phase, allocate a significant period of time to find out more about the business, industry or market your company will be competing in. It is recommended to do so even if you are currently very knowledgeable about these important elements. Read articles, business reports, and examine competitors deeply. Further, if you will be competing under two industries, be certain that you study both. As an example, Edible Arrangements, a manufacturer of edible flower bouquets, competes within the floral goods industry, and can also be part of the larger “gifts” industry.
Estimate Cost of Goods Sold Conservatively
If you discover that the industry average cost of products offered by similar companies is 50% of earnings, think twice before writing that your company “will have a 40% cost of goods sold due to extra efficiencies”. Normally, efficiencies are made over time through research and because of an organization’s expansion to larger scales. Firms do not normally begin as more cost-efficient compared to incumbent competitors. Unless you have a silver bullet pricing or operational process, assume that your cost of goods sold will be higher instead of lower than the market average as you begin.
Summarize Your Results
Within the financial plan, show a summary of the expansion you anticipate over the next five years, apart from only having revenue and net profit projections. Include metrics like the number of consumers or customers, the number of workers, the amount of merchandise sold or services rendered, as well as other data applicable to your kind of business. These kinds of non-financial metrics will provide readers with better comprehension of the value that your company will have as it develops.