What are the key questions that a business plan should answer? Every entrepreneur and investor should be able to quickly calculate a simplified business plan. Literally on the knee - such a calculation should fit on one or two A4 pages. Or one napkin - there were such cases too.
So, your business plan should answer the following questions:
1) What is the initial investment?
2) What is required besides money, and how to provide it?
3) How long does it take to organize and run a business?
4) What will be the ongoing costs of the business? How much will be required each month to cover the minimum required operating costs? How and depending on what current costs will increase with an increase in turnover or business scale?
5) How and where is it planned to generate income? What goods and services are you planning to sell? Who can be the client of the business? Where will these clients come from? How will we attract them?
6) All business costs should be divided into VARIABLES (the size of which depends on the turnover of the business) and CONSTANT (which you have to pay in any way, regardless of the turnover). What percentage of the value of your goods and services on the price list is variable costs, including the purchase value of the goods? What volume of monthly sales do you need to provide in order to bring the business to its current self-sufficiency (break-even point)? TIP: It is very useful to make a price list for the goods and services of the business whose business plan you are calculating. The price list - full, or "squeeze" for key items - it would be nice to fit on one A4 sheet. Drawing up such a price list clears the mind well. And then this price list is indispensable when discussing a business plan.
7) What month will sales start? How many months will it take for the business turnover to reach the waterline (break-even point)? How much will the costs of the initial stage increase during this time?
8) If the launch of the business and the start of sales do not go as expected, at what point and under what conditions will the project need to be canceled? What will be the total costs by this time? How can at least part of the investment be returned when the project is liquidated? What will be the size of the planned and maximum possible losses? Can you afford such a loss?
9) How long will it take for the business to reach the Sales Plan for the first time? What is the turnover of the business? How much income will a business owner receive? It makes sense to consider three Plans: • Plan-MIN - the business brings the minimum acceptable current income. • Plan-NORM - business brings good cruising income. • Plan-MAX - the business brings excellent (for the period of initial development) income.
10) How soon will the business exit at the time of return on investment? This happens when the total income received by the owner from the business equals the amount of the initial investment in the business. In fact, it can be considered that at this moment the business owner fully returns to himself the capital initially invested in the business. And thus it receives protection from the risk of losing this capital in whole or in part. It is at this moment that the business owner can take a breath for the first time. And say to myself: "After all, I was not a complete idiot when I invested in this business."
11) What profitability can you expect from the business after that? What is the projected annual income of a business owner - in absolute terms? And as a percentage per annum to the equity capital of the business?
Business is a risky business. If the business will provide lower returns than more conservative real estate investments - is it better to invest in real estate? It is unlikely that it would be reasonable for you to make less income for the greater risk. bio.fm/m0ney007