Follow these tips for greater success finding funding with your new business plan:
Know Your Industry
During your research phase, take a good amount of time to research the industry your business will operate within, even if it is one you are already familiar with. Read articles, industry reports, and study competitors deeply. All of this information should better inform the industry analysis in your business plan which proves your understanding to funders. Furthermore, if you will operate within two industries, make sure to study both. For example, Edible Arrangements, a maker of fruit “bouquets” of flowers, competes within the floral industry in a sense, and is also part of the large gift industry.
Estimate Cost of Goods Sold Conservatively
If you find that an industry average cost of goods sold for your type of business is 50% of revenues, think twice before simply writing in your plan that your business “will have a 40% cost of goods sold because of additional efficiencies”. Generally, efficiencies are created over time through learning and also because of a company’s growth and additional scale. Businesses do not generally start out as more efficient than incumbent competitors. Unless you have a silver bullet operational or pricing method, assume your cost of good sold rate will be higher and not lower than the industry average as you start out.
Summarize Your Results
Within the financial plan, show a summary of the growth you expect over the next five years with more than just sales and net profit projections. Include metrics such as the number of customers or clients, the number of employees, the number of products sold or services rendered, or other statistics relevant to your type of business. These type of non-financial metrics will give readers a better understanding of what type of impact your business will have as it grows.
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