Any business is a mechanism to generate wealth; it's the subtle way of utilizing investment to develop an extra return. This wealth creation mechanism needs a well-thought strategy covering all the areas of operation and confirming the proper execution of the planned system.
The business model or plan should be convincing enough for the investors to invest with confidence; it's natural for an investor to invest in a business model where they feel all the risks are covered and there is a certainty in the return of investment as they desire. The quick test of a business model is to answer all the questions and address the reservations of the investor so that they feel they are making an intelligent choice.
The main areas an investor focuses on are the product's mission statement and the services the model is providing. The probability percentage of success depends on the leadership team, employees and the location – the business model/plan must have convincing data on the finance and the growth plan logical enough to eradicate any hesitation of the investor.
Introduction
Describe the company with profuse details, where all the risk factors are considered with the plan to take care of the risk with practical solutions. The business plan must be precise about the organization, supply chain, and interest of its consumers/customers. It must have minute details of how the company will have the edge over its competitor, listing the advantages in the field of expertise, location, and network, highlighting the business model's strengths.
Market Analysis
The business model must reflect thorough research on the trends of the industry and the competitor activities with a complete SWOT analysis, which includes identifying the successful business houses, imbibing their practices, and addressing consumer needs.
Organization and Management
A clear description of the company's structure is devised. The working assembly of an organization and management decides the company's legal form, whether the company would be a sole proprietorship, limited liability company or a partnership firm.
The management may further specify the organization chart identifying the person and their unique contribution to the company's common goal.
Service or product line
The logical explanation of the product or services- how it makes a difference to the consumer, forms a potential feature in a business plan; It enhances the product's life expectancy. They should share the plan for intellectual properties like copyrights and patents.
Funding request
The funding request should include:
The cash requirement.
The means of finance like debts or equity.
The applicable terms and conditions.
The above should be followed by details describing the utilization of the funds- specifying the portion to be used for capital assets and other establishment expenses. It is advised to include a description of future strategies, financial plans such as paying off debts or making an exit.
Financial Projections
It represents the business' success with actual numbers, convincing the reader to feel enthusiastic about the business' future. If it is an existing business, this may include the statements such as balance sheets, cash flow statements of the last three to five years, which will provide the reader with insight into the past performance and the projected figures for the next five years. The reader will find it more prudent to invest in the said model. This part of the entire business model is essential and should be represented with graphs and figures.
This is just the major aspects of a business plan. The devil lies in the details.
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