The document discusses the key components of a successful business plan. It identifies the three primary functions of a business plan as an action plan, road map, and sales tool. It provides guidance on the essential elements that should be included in a business plan, such as an executive summary, company overview, product/service description, market analysis, marketing plan, financial plan, management plan, and funding requests. It emphasizes that a well-researched and comprehensive business plan is important for evaluating the feasibility of a new business idea, communicating the concept to potential investors or partners, and providing an operating plan to help ensure success.

1. Nimra zaman
BUSINESS PLAN

2. Functions of a Business Plan
A business plan describes the venture that you will create to exploit a concept. It has
traditionally three primary functions:
1. Action Plan
2. Road Map
3. Sales Tool

3. Action Plan
A business plan can help to move you to action.
You may have been thinking for years about starting a business or engaging in some
venture, but the process may seem too daunting, too large and too
complicated.
A business plan will help you to pull apart the pieces of starting a business and
examine each piece by itself. So instead of one large problem, you have a sequence of
smaller problems. And by solving the small problems, the large problem is
automatically solved.
So writing a business plan can help to move you to action by breaking down a
seemingly insurmountable task (starting a business) into many smaller, less
intimidating tasks

4. Road Map
Once you have started your business, a business plan can be an
invaluable tool to help keep you on track and moving in the
direction you want to go. In the hurly-burly of daily business, it is
very easy to lose sight of your objectives and goals -- a business plan
can help to keep you focused.
A business plan can also serve to help others to understand
your vision, including suppliers, customers, employees, friends,
and family.

5. Sales Tool
A business plan can serve as a sales tool.
You will probably need outside financing to start your business, and a business plan is the
tool you need to convince investors to come on board.
You may also want and need concessions from suppliers or customers -- a business plan
can help you get them.
Finally you may need to convince family members, or even yourself, that your ideas will
bear fruit.
A well-written business plan can serve to sell people close to you on the benefits of
proceeding with your concept.

6. Perhaps the most important reason to write a business plan is that it requires you to engage
in a rigorous, thoughtful and painful process that is essential before you start a viable
venture.
• It requires you to answer hard questions about your venture –
• why is there a need for your product/ service?
• Who is you target market?
• How is your product/service different than your competitor’s?
• What is your competitive advantage?
• How profitable is the business and what are the cash flows?
• How should you fund the business?
To be able to describe your business in a compelling manner and then to succinctly answer
questions from investors is a critical skill. You can do this well only when you have made the
venture a part of your soul. Writing a Successful Business Plan will help you do this.

7. WhyWriteaBusinessPlan?
A Business Plan helps you evaluate the feasibility of a new business idea in an objective,
critical, and unemotional way.
• Marketing – Is there a market? How much can you sell?
• Management – Does the management team have the skill?
• Financial – Can the business make a profit?

8. WhyWriteaBusinessPlan?
It communicates your idea to others, serves as a “selling tool,” and provides the basis for
your financing proposal.
• Determine the amount and type of financing needed
• Forecast profitability and investor return on investment
• Forecast cash flow, show liquidity and ability to repay debt

9. WhyWriteaBusinessPlan?
It provides an operating plan to assist you in running the business and
improves your probability of success.
• Identify opportunities and avoid mistakes
• Develop production, administrative, and marketing plans
• Create budgets and projections to show financial outcomes

10. Whowillusetheplan?
If you won't use the plan
to raise money,
your plan will be internal
and may be less formal.
If you are
presenting it to outsiders
as a financing proposal,
presentation
quality and thorough
financial analysis are very
important.

11. 6 Ways to Ruin Your Business Plan
These errors in business plan preparation and presentation will undermine the credibility of the
plan and hurt your chances to receive funding:
• Submitting a “rough copy,” (with coffee stains and typos) tells the reader that management
doesn’t take the planning process seriously.
• Outdated historical financial information or unrealistic industry comparisons will leave
doubts
about the entrepreneur’s planning abilities.
• Unsubstantiated assumptions can hurt a business plan; the business owner must be
prepared to explain the “why” of every point in the plan.

12. 6 Ways to Ruin Your Business Plan
• Too much “blue sky” - a failure to consider prospective pitfalls - will lead the reader to
conclude that the idea is not realistic.
• A lack of understanding of financial information. Even if someone else prepares the
projections, the owner must be able to explain them.
• Lack of specific, detailed strategies. A plan that includes only general statements of
strategy (“We will provide world class service and the lowest possible price.”) without
important details will be dismissed as fluff.

13. Elements Of A
Successful Business
Plan
1. Executive Summary (~1 page)
2. Company Overview (~1 page)
a) Business structure
b) Nature of the business
c) Industry
d) Vision, mission, and values
e) Background information
f) Business objectives
3. Product and Service (~1 page)
a) Features
b) Benefits
c) Proprietary Rights
d) Stage of Development
4. Market and industry Analysis (~3pages)
a) Market size and growth
b) SWOT analysis
c) Competitive analysis
d) Opportunity
5. Customer segmentation

14. Elements Of A
Successful Business
Plan
5. Marketing Plan (~4 pages)
a) Price
b) Product
c) Promotion
d) Place
6. Logistics and Operations Plan (~2 pages)
a) Suppliers
b) Production
c) Facilities
d) Equipment
e) Shipping and fulfilment
f) Inventory
7. Financial plan (~2-3 pages)
a) Income statement
b) Balance sheet
c) Cash-flow statement

15. Elements Of A
Successful Business
Plan
8. Management Plan (~2 page)
a) Company Organization
b) Management Team
9. Funding (1 page)
a) • Funding Requirements
b) • Funding Strategies
c) • Sources and Uses of Funds Statement
d) • Offering
10. Appendices (15 pages max)

16. 1. Executive Summary
The Executive Summary of a Business Plan is a one-page distillation
of your entire plan, and often is the last section to be written.
Despite the title, it is not written for executives, nor is it a summary of the
plan.
Its objective is to capture the reader’s interest, so that they want to
read the entire plan; even better to call you to arrange a meeting.
It should be considered a chance to “sell” the reader on the business
opportunity.

17. Here’s what your business plan’s executive summary should include:
Business concept.
What does your business do?
Business goals and vision. What does your business want to do?
Opportunity Why is this a good opportunity? What evidence do you have to support the demand? What is the size
of your market? What are the critical trends and how will your company exploit them? What is the
compelling need?
Product description and
differentiation.
What do you sell, and why is it different?
Competitive Advantage Who is the competition? What is your competitive advantage?
Target market..
Who do you sell to?
Marketing strategy How do you plan on reaching your customers?
Current financial state. What do you currently make in revenue?
Projected financial state.
What you foresee making in revenue?
Funding How much funding is required?
The team. Who’s involved in the business?
Management Who is the management team and why will they make a success of the venture?

18. 2. Company overview
This section of your business plan will answer two fundamental questions:
Who are you and what do you plan to do?
Answering these questions provides an introduction to
• why you’re in business,
• why you’re different,
• what you have going for you,
• What are your ambitions for the company?
• Will it always be a small company, or do you want to grow it into an
international giant? and
• why you’re a good bet if you’re asking for investment

19. • Here are some of the components you should include in your company overview:
a) Business structure
b) Industry
c) Vision, mission, and values
d) Business objectives
e) Background information
Business structure
• Are you a sole proprietorship, general partnership, limited partnership, or an incorporated
company?
• Nature of the business
• What do you sell? Include a short overview of all products or services you offer.
Industry
Think of the broad category of products you sell to identify your industry. Some examples could
include “women’s fitness” or “independently published books.”

20. Vision, mission, and values
• To define your values, think about all the people your company is accountable to, including
owners, employees, suppliers, customers, and investors.
• Mission statement should state why your business exists in a convincing manner, and it
should be no longer than a single sentence.
• craft your vision statement. What impact do you envision your business having on the world
once you’ve achieved your vision?

21. • Background information
If you have relevant experience or other information that is pertinent
to your business or your plans, include it here.
• Business objectives
You’ll want to include both short- and long-term goals in the company
overview section of your plan.
In the context of a business, short-term goals are generally ones you plan
to achieve in the next year, while long-term goals are ones you’re aiming
for in the next 1-5 years.
When including them, make sure your goals are all S.M.A.R.T.: Specific,
measurable, attainable, realistic, and time-bound.

22. 2. Product and Service
Guidelines for Preparing This Section
Be sure to explain and describe product/service.
Generate some excitement about your product/service.
Be factual, but be enthusiastic.
• Sources of Information
• Technical specification and
drawings
• Prototype
• Competitor product/service
matrix
• Interviews - talk to experts
in the marketplace,
including buyers, suppliers,
sales representatives,
wholesalers, distributors,
and retailers.
• Customer surveys
• Interviews
• SWOT analysis

23. A. Features
• Describe the attributes of your product/service, e.g. speed, innovativeness, ease of use, etc.?
• What evidence do you have to support the demand for these features?
• Is there a range of product/services being offered at the beginning of the venture? What will be
introduced over the next 3 to 5 years?
• What are the prices?
• Write a one-paragraph description that evocatively describes the. experience of customers using
your service
• What is unique about our product/service? What is the benchmark?
• How will the product/service be produced and delivered? How will it be packaged?

24. B. Benefits
Describe the benefits to the target market. When considering the benefits of a
product/service, remember that features are not the same as benefits.
Your new bicycle may be fast and red but these are not benefits.
The benefit is that you can win competitions and look cool.
Think about the impact on the target market’s feelings (emotions) and pocketbook
(financial)

25. Describe the major benefits of the product/service. How do the benefits address the needs of
the target market? Think beyond a generic description of benefits, e.g.
o Best quality: do you mean appearance, durability, reliability, etc.?
o Good service: do you mean on-time delivery, maintenance, tech support, etc.?
o Efficiency: do you mean less time, easier to use, greater output, fewer resources, etc.?
o Save time: to do what? It may not always be important to save time.
o Convenience, for what?
Are the benefits well understood by the target market? What evidence do you have to support
this?
Prepare a features and benefits table. For each of the important features, describe the
corresponding benefits.

26. C. Proprietary Rights
What proprietary rights do you have to the product/service?
(For many products, there are no proprietary rights and this subsection can be deleted.)

27. D. Stage of Development
Briefly describe the current status of your product or service:
• Where is the product in its lifecycle (early, growing, mature, declining)?
• Is it ready for the market, or is it in development?
• If in development, how far along is it?
• What obstacles remain?

28. 3. Market and industry analysis
It’s no exaggeration to say that your market can make or break
your business.
Choose the right market for your products—one with plenty of
customers who understand and need your product—and you’ll
have a head start on success.
On the other hand, with the wrong market, or the wrong timing in a
previously-right market, you may find yourself trying to offload
products to customers who are only lukewarm about them.
This is why your market analysis a key section of your plan, whether
or not you ever intend for anyone else to read it. It should include an
overview of how many customers you estimate there are for your
products, an analysis of your business’ position in the market, as
well as an overview of the competitive landscape.

29. Guidelines for Preparing This Section
This section dispassionately describes the
market you will enter and the industry in which
you will compete.
When finished with this section, you and your
readers should understand the dynamics,
problems, and opportunities driving your
marketplace.
Thorough research to support your conclusions
will be important both to persuade investors and to
validate your own assumptions as you work
through the plan.
Sources of information
• Secondary research - internet, library,
trade associations and journals.
• Interviews - talk to experts in the
marketplace, including buyers,
suppliers, sales representatives,
wholesalers, distributors, and retailers.
• Customer surveys
• Supply chain analysis
• Samples of competitor products
• Competitor brochures, catalogs,
specifications, literature, websites,
advertising and promotion materials

30. A. Market Size and Growth
A market consists of a group of customers who are willing to buy products or
services to satisfy a need.
For example, people need shoes to wear to work, go dancing, play sports and
climb mountains.
This is the footwear market and each of these examples represents a different
segment.
Within these segments there may be sub-segments, e.g. in the sports market
there are different segments for running, cycling, dancing etc.

31. • Define the market in which you are competing, e.g. cycling footwear,
dental care, industrial water purification, etc.
• Determine the size of the market you are considering in numbers of
customers, units sold (or transactions) and dollar value of purchases.
o What is the historic growth rate? Future growth rate?
o What data is there to support your analysis? Identify the sources.
• Prepare a table(s) that summarizes the size and growth by segments
or groups of customers:
o Market demographic, psychographic
o Geography: local regional, national, international
o Sector: industrial, consumer, government

32. B. SWOT analysis
A SWOT analysis looks at your strengths, weaknesses, opportunities, and threats.
• What are the best things about your company?
• What are you not so good at?
• What market or industry shifts can you take advantage of and turn into
opportunities?
• Are there external factors threatening your ability to succeed?

34. C. Competition
Write a paragraph on each competitor that provides a short description of what the
company does; its position in the industry; strengths and weaknesses.
You’ll always have competition in the market, even with an innovative product, so
it’s important to include a competitive overview in your business plan.
To help you write this section prepare a competition matrix analysis that
compares your venture with the major competitors.

35. If you’re entering an established market,
include a list of a few companies you
consider direct competitors, and how you
plan to differentiate your products and
business.
For example, if you’re selling jewelry, your
competitive differentiation could be that
unlike many high-end competitors who
offer high-quality products, you donate a
percentage of your profits to a notable
charity, or you pass savings on to your
customers.
Direct: companies that produce same
product/service; but, they may have
different strategies to compete - price,
quality, selection, performance, design, tech
support.
If you’re entering a market where you can’t easily
identify direct competitors, consider your indirect
competitors. These are the products that are
substitutes for yours.
As an example, if you’re selling an innovative new
piece of sports equipment, it’s too easy to say that
because your product is new you have no competition.
Consider what your potential customers are doing
now to solve the same problems your product solves,
and think about how to make sure you stand out from
their current solution.
Indirect: companies that satisfy same need with different
product/services.
Future: companies that have the capability to enter your
market; they may have the same customers; but use
different technology or channels

36. Once you’ve identified your competition, it’s time to review what makes your products and your business
stand out.
There are three overarching factors you can use to differentiate your business:
• Cost leadership. You have capacity to offer lower prices than the majority of your competitors to
maximize profits.
• Differentiation. Your product or service offers something distinct from the current cost leaders in your
industry and banks on standing out based on your uniqueness.
• Segmentation. You focus on a very specific or “niche” target market and focus on building traction with a
smaller audience before moving on to a broader market.
While those are the major strategies to differentiate your business, there are plenty of other ways you can
compete within them, including customization, design, branding, and convenience, to name a few.
You’ll want to include details about your specific plans to stand out.

37. D. Opportunity
In this section you should describe succinctly what the opportunity is and why it is
attractive.
Here is where you need to draw conclusions based on your research, interviews and
particularly the customer surveys?
This is a key section of the Plan because here you must make the case that there is
attractive opportunity for your venture.
• What is the size of the opportunity? How rapidly is it growing? What trends support the
opportunity?
• What is the compelling need? What problem are you solving?
• What evidence do you have that proves there is a market?
• Who is the target market?
• What is unique about your product or service? What are the benefits?
• What is your competitive advantage?

38. 4. Customer Segmentation
Your ideal customer, also known as your target market, is the foundation of your
marketing plan, if not your business plan as a whole. As you make strategic
decisions, you’ll keep this person in mind, which is why an overview of who they
are is so important to understand and include.
The questions you’ll answer will vary based on what you’re selling, but you
should provide enough information so that it’s unquestionably clear who you’re
trying to reach—and more importantly, why you’ve made the choices you have
based on who your customers is and what they value.
As an example, a college student has different interests, shopping habits, and
price sensitivity than a 50-year old executive at a company.
Your business plan and decisions would look very different based on which one
was your ideal customer.

39. To give a holistic overview of your ideal customer, describe a number of general
and specific demographic characteristics.
Customer segmentation often includes:
• Where do they live?
• What’s their age range?
• What’s their level of education?
• What are some common behaviour patterns?
• What do they spend their free time on?
• Where do they work?
• What technology do they use?
• How much do they earn?
• Where are they commonly employed?
• What are their values, beliefs, or opinions?

40. 6. Marketing Plan
The Marketing Plan will make or break
the prospects for your venture.
A great idea is meaningless if you cannot
find customers. Carefully drafted and
logical financial projections are
irrelevant if nobody buys your product.
In this Marketing Plan section you must
convince the reader that there is indeed
an eager market for your product.
The Marketing Plan is where you show
how you are going to fit into the market
structure you just finished describing.
Sources of Information
Research you do for this subsection will be with customers
and potential customers. It is imperative that you do
sufficient customer research to convince potential investors
that customers will indeed come flocking to buy your
product or service. Customer research can include simply
talking with potential customers to get reactions to your
product idea, conducting focus groups, undertaking walk-up
or mailed surveys, putting up a mock demonstration of your
concept and soliciting customer feedback, and so on. Be
creative in finding ways to get honest customer input about
your product or service. And finally, don't inadvertently cook
the books here. You are undoubtedly enthused about your
concept. Customers will pick up on your enthusiasm and
often reflect it back to you, leading to erroneous conclusions
about customer acceptance. So be neutral and factual as you
collect data.
• Customer surveys
• Interviews
• SWOT analysis

41. 5. Marketing plan
Your marketing efforts are directly informed by your ideal
customer and your plan should outline your current
decisions and your future plans, with a focus on how your
ideas are a fit for your ideal customer.
If you’re planning to invest heavily in ads on Instagram, for
example, it might make sense to include whether Instagram
is a leading platform for your audience.
Most marketing plans include answers to four key questions,
in as much detail as makes sense for your plan’s goals:

43. 6. Logistics And Operations Plan
Your logistics and operations are the workflows that you’ll implement to make
your ideas a reality.
If you’re writing a business plan for your own planning purposes, this is still an
important section to consider, even though you might not need to include the
same level of detail as if you’re seeking investment.
You’ll want to cover all parts of your planned operations, including:
Suppliers
Production
Facilities
Equipment
Shipping and fulfilment
Inventory

44. Where do you get the raw materials you need for production, or where are your products produced?
How long does it take to produce your products, and get them shipped to you? How will you handle a busy
season, or an unexpected spike in demand?
Where will you and any team members work?
Do you plan to have physical retail space? If yes,
where? Physical retail space? If yes, where?
What tools and technology do you require to be up and running? This includes everything from computers
to lightbulbs and everything in between.
Will you be handling all the fulfillment tasks in-house or will you use a third-party fulfillment partner?
How much will you keep on hand, and where will it be stored? How will you ship it to partners if required,
and how will you keep track of incoming and outgoing inventory?
This section should signal to your reader that you’ve got a solid understanding of your supply chain, and
strong contingency plans in place to cover potential uncertainty. If your reader is you, it should give you
a basis to make other important decisions, like how to price your products to cover your estimated costs,
and at what point you plan to break even on your initial spending.

46. 7. Financial plan
No matter how great your idea is, a business lives or dies based on its financial
feasibility.
Regardless of the effort, time, and money you’ve already invested, at the end of the
day people want to work with a business they expect to be viable for the
foreseeable future.
The level of detail required in your financial plan will depend on your audience
and goals, but you’ll typically want to include three major views of your financials:
an income statement, a balance sheet, and a cash-flow statement.
It may also be appropriate to include financial projections.
Here’s a spreadsheet template that includes everything you’ll need to create an
income statement, balance sheet, and cash-flow statement, including some sample
numbers.
You can edit it to reflect projections as well if needed.

47. Your income statement is designed to give readers a look at your
revenue sources and expenses over a given time period.
With those two pieces of information, they can see the all-important
bottom line, or the profit or loss your
business experienced during that time.
If you haven’t been operating your business yet, you can put together
a forecast for the same information.
INCOME STATEMENT

48. Balance sheet
Your balance sheet offers a look at how much equity you have in your business.
On one side you list all your business assets (what you own) and on the other side, all your
liabilities (what you owe).
That provides a snapshot of your business’ shareholder equity which is calculated as
Assets - Liabilities = Equity

49. Your cash-flow statement is similar to your income statement, with one important difference. It
takes into account when revenues are collected and when expenses are paid.
When the cash you have coming in is greater than the cash you have going out, your cash
flow is positive.
When the opposite scenario is true, your cash flow is negative.
Ideally, your cash flow statement will help you see when cash is low, when you might have a
surplus, and where you might need to have a contingency plan to access funding
It can be especially helpful to forecast your cash-flow statement to identify gaps or negative
cash-flow, and adjust operations as required. Here’s a full guide to working through cash-flow
projections for your business.

50. 8. Management Plan
Investors often assert that there are three attributes important for a successful start-up
business: management, management, and management.
Many claim they will invest in a strong management team with a mediocre idea, but will
decline to fund a weak management team with a great idea.
This is not the place for modesty or self-deprecation. Be honest, but highlight your
accomplishments and your capabilities while mitigating any obvious shortcomings or
weaknesses.
For example, if you are young and inexperienced, accentuate your energy, capacity for hard
work, and willingness to learn, while downplaying your lack of experience. When readers
are finished with this section, you want them to be confident that your venture is in good
hands and will be competently managed -- by you!

51. A. Company Organization
Describe how your company will be organized.
• Prepare an organization chart.
• Will you have a board of directors? Who will be on it? What will be their role?
• Will you have a board of advisors? Who will be on it? What will be their role?
• What is the ownership structure of your company? What percent of the company
do each of the founders own?
• Do you plan to have a stock option plan? If so, describe how the plan will be
organized and how large a pool of shares is needed.

52. B. Management Team
founders and principal managers who will run your
firm.
overview of your existing team, and any predicted
hires.
What will be their duties and responsibilities?
Write a short paragraph on each of the key
managers? (Include resumes in the Appendix)

53. 9. Funding
In this section you will determine how much funding you require and how you will
use it; decide what type of funding is appropriate for your venture; and explain the
offer you are making to investors or lenders.

54. Funding Requirements
From your cash flow statement, determine the required amount and timing of investments needed
to execute your plan.
• Review the Cash Flow projections to determine the amount of cash generated or required for
each year.
• Review the monthly and quarterly cash flows to determine the impact of seasonality or one time
expenditures.
• Determine the amount and timing of cash infusions needed to prevent cash balances from going
negative.
• Add a cash safety cushion to anticipated cash needs to protect against unexpected expenses or
delayed income. A cushion of 20% is a good starting point in many situations.
• Develop a funding strategy that is consistent with your cash needs. For example, if you need cash
in year one and again early in year two, it may make sense to seek funding in one lump sum in
year one. Alternatively, if cash is needed in year one and again late in year two or year three, it
may make better sense to seek funding in two tranches: the first in year one and a second in
year two.

55. Sources and Uses of Funds Statement
• Sources: determine the type of funding most suitable for your business: equity, debt, or non-
traditional financing
o Equity funding is appropriate for most start-up businesses with moderate to large cash needs.
o Debt may be appropriate for existing businesses with a financial track record and assets, or for
start-up businesses with modest cash needs. In the latter case, credit card or other consumer debt
may be appropriate.
o Non-traditional financing may be appropriate when customers or vendors are willing to
participate in the business.
• Uses of Funds: based on the estimate of the funds required, describe how the funds would be used
o Product design and development
o Marketing actions, e.g. major advertising campaign, catalog
o Capital expenditures, e.g. new machine, major renovation, information system
o Working capital

56. Funding Strategies
Determine the most appropriate source(s) for the type of funding you seek:
1. Sources of equity funding
o Friends and family – suitable for smaller businesses with modest cash needs, and that will
eventually be able to pay dividends or buy back shares. Or, seed stage for high growth ventures.
o Angel investors – suitable for moderately sized business with moderate cash needs, excellent
growth potential, and a clear exit strategy. Or, seed stage for high growth ventures.
o Venture capital – suitable for potentially large businesses with large cash needs,
extraordinary growth potential, and a clear exit strategy (e.g., will go public or will be acquired)

57. 2. Sources of debt financing
o Banks – suitable for businesses with established credit records, ongoing
operations, and/or physical assets to use as collateral.
o Small Business Administration – government guaranteed loans made by
banks. The criteria are less stringent than a traditional bank loan, but the
terms are more expensive.
o Credit cards, second mortgages, consumer debt – may be suitable when cash
requirements are small and the business will quickly begin to through off cash.
o Friends and family – may be suitable for small businesses with modest cash
needs, and with the ability to make loan payments on a timely basis

58. 3. Sources of non-traditional financing
o Leases – lease rather than purchase equipment; cash flow must permit regular lease payments.
o Customer advances – customers pay for merchandise or service at time of order in order to
assist business and secure needed product.
o Customer participation – customers purchase an equity stake in the business to secure need
product and reliable source of supply.
o Vendor participation – vendors furnish equipment and/or supplies in return for an equity
stake in the business to secure initial and follow-on sales.
Other creative arrangements – sources of non-traditional financing are limited only by the
creativity and ambition of the entrepreneur.

59. Offering
The Offering (or Funding Request) is where you make your pitch for money.
• Equity: describe the type of security being offered (common, preferred, warrants, etc) to the
investor and what share of your company they will receive for a specified investment.
o How many rounds of funding are required? How much is needed for each round?
o To calculate how much of the company to offer you will need to place a value on the business. It is
important that you persuade investors that the deal you are offering is fair to them and is supported
by the facts. There are many approaches that can be used; you should investigate which method(s)
are appropriate for your industry. From your interviews with industry experts and secondary
research find out what valuations investors are being agreed to for companies of your size, stage and
industry.
o A valuation model is included in the Financial Projections Model.
o What is your preferred exit strategy? How can investors realize a return on their investment? Go
public? Sell out? Operate and grow? What is our exit for investors if the business does not develop as
you hope?
o Remember that everything is open to negotiation, so don't give away the farm on the first round!

60. Debt: If you are seeking a loan, then you need to indicate to the lender the term
of the loan, interest rate, collateral and how it will be repaid.
In either case, it is important that you clearly spell out the key terms of the
proposal and sell the advantages to the investor/lender, and make it clear how
they can get a satisfactory return.

61. 10. Appendices
The appendices are where you should collect all of the documentation that supports the
body of your business plan.
INCLUDE (Required docs)
• Financial projections
• Results of marketing studies
• Letters of interest from potential
customers.
Don't include (tangential information)
• Newspaper clippings or
• Tables of data