NUTS AND BOLTS OF GREAT BUSINESS PLANS-2016.pdf

Describe the size of the overall gross margins ie

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Describe the size of the overall gross margins (i.e., selling price less cost of goods sold or variable costs) and margins the for each of the major revenue drivers in the business. Where you have multiple products in a given revenue driver category, calculate the contribution margin for each product and take an average (or just use the margin for the most typical product that falls within that revenue driver). Then determine the weighted average contribution margins by weighting the individual contribution margins of each revenue driver based on the percentage of total sales expected to come from that revenue driver. Include results of your overall contribution analysis. B. Fixed and Variable Costs: Provide a detailed summary of fixed and variable costs, in dollars and as a percentage of total costs, for the venture. To get variable costs, you must identify a “unit of analysis” . Fixed costs assume a given range of volume or capacity. For analysis purposes, classify semi-variable costs as either fixed or variable. Where appropriate, show relevant industry benchmarks for costs. C. Operating Leverage and its Implications Characterize whether your cost structure is predominantly fixed or variable and then indicate the implications. For example, if you have a high fixed cost structure, you have high operating leverage which means it takes longer to reach breakeven, but once there, much more of your revenue flows straight to the bottom line. High operating leverage (high fixed costs) suggests a riskier venture, at least initially. D. Start Up Costs Distinguish the one-time start-up costs of the business (put into a table). These are distinct from the ongoing operating costs. E. Overall Economic Model Put the pieces above together. Indicate how you will make money in terms of the combination of margins, volumes, operating leverage and revenue source flexibility. How attractive is this combination? F. Breakeven Chart and Calculation Make clear what your unit of analysis is for the purpose of calculating breakeven. Calculate breakeven and prepare a chart that shows when breakeven will be reached and any stepwise changes in breakeven that may occur (as fixed costs go up). Discuss whether it will be easy or difficult to achieve the breakeven level of sales, the size of gross margins and price sensitivity, and how the break-even point might be lowered in case the venture falls short of sales projections. G. Profit Durability: Address the issue of how solid or vulnerable the profit stream appears to be. Provide reasons why your profit stream is solid or vulnerable, such as barriers to entry you can create, your technological and market lead time, and so on.
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IMAGINE > BELIEVE > CREATE 14 SECTION V: THE MARKETING PLAN The Marketing Plan describes how your projected sales will actually be attained. How will you make sales actually happen? A great idea is meaningless if you cannot find customers. Thus, this section builds on the earlier Market Section , where you defined your market and outlined market segments and their buyer behavior. The marketing plan
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