Chapter 4_MGT422_SP11 (2)

G self family loans investors include realistic

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Unformatted text preview: ore turning a profit (called the “burn How rate”) rate”) When do you expect to turn a profit and at what rate do you expect profits to grow? In the body of the Business Plan, you will include summary tables and prose that In describes the financial situation In your appendices, you include supporting and detailed financial statements to In back up this discussion. Always include: back Assumption sheet: The assumptions you made in coming up with the projections Income statement: Shows the estimated income and expenses over a year Cash flows statement: Shows how the company is paying for its operations Shows Financial indicators: Financial ratios that indicate the “health” of the business Part 11 (continued): Payback/Exit Strategy Part Discuss how and when you anticipate investors Discuss will recoup their money. Examples: will Go public (IPO), investors cash out Liquidity event (e.g., sell to another company), Liquidity investors cash out investors Internal cash flows pay back investors Discuss the timeframe expected for investor exit Discuss timeframe Discuss likelihood and assumptions that lead to exit Discuss likelihood strategy strategy Part 12: Critical Risks Part Businesses do not operate in a vacuum They face uncertain futures and new ventures are based on many They assumptions as to “how the game will be play out” as Must be realistic about potential risks and courses of action Must potential to combat potential risks risks Discuss likely risks/problems that the firm might face and how the firm would Discuss deal with them. Examples: Financial projections are somehow flawed Unable to obtain patent protection Assumptions about consumer preferences flawed Speed and processes used to manufacture products flawed Competitive responses are different from what expected Part 13: Milestone Schedule Part Discuss timeline and actions for achieving business Discuss activities activities Initial funding received Prototype completion Additional funding received Manufacturing capabilities solidified Advertising campaign designed and launch Initial sales achieved Expected time to breakeven Actions taken to turn profit Estimates for growth actions (e.g., expansions, increase Estimates production, increase R&D, etc.) production, Part 14: Appendices Part Supporting, detailed, documents that expand on Supp...
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This document was uploaded on 03/24/2014 for the course ER 203 at John Carroll.

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