Etini
Valued Contributor
One thing investors are particular about in any business plan is the financial projections. They want to see the channels their funds would pass through and the path it would take to bring them reasonable returns. Many entrepreneurs don't know how to make financial projections for their business plans. Also, some make unrealistic projections that end up putting them in trouble. This is so because the investors would be expecting returns that can't be gotten in reality.
First of all, have a full understanding of the industry you are operating in. Talk to the veterans and glean valuable data from them. Data like price levels, consumption patterns, cost of inputs, and other relevant financially related info. This would help you to set benchmarks in your projections.
Another thing you should do is that in your revenue projections, use the lowest possible price. Business is volatile and nothing is assured. It puts you on the safe side if you use the base level so you won't be caught off-guard. In juxtaposition, when you want to project expenses, use the highest possible ceiling. It would help you to adjust to inflationary shocks. Also, be realistic with your profit margin. Don't exaggerate. If the profit is 10 dollars, state it clearly, so you won't run into issues with investors.
First of all, have a full understanding of the industry you are operating in. Talk to the veterans and glean valuable data from them. Data like price levels, consumption patterns, cost of inputs, and other relevant financially related info. This would help you to set benchmarks in your projections.
Another thing you should do is that in your revenue projections, use the lowest possible price. Business is volatile and nothing is assured. It puts you on the safe side if you use the base level so you won't be caught off-guard. In juxtaposition, when you want to project expenses, use the highest possible ceiling. It would help you to adjust to inflationary shocks. Also, be realistic with your profit margin. Don't exaggerate. If the profit is 10 dollars, state it clearly, so you won't run into issues with investors.
