Start-up Funding | |
Start-up Expenses to Fund | $0 |
Start-up Assets to Fund | $20,100,000 |
Total Funding Required | $20,100,000 |
Assets | |
Non-cash Assets from Start-up | $0 |
Cash Requirements from Start-up | $20,100,000 |
Additional Cash Raised | $0 |
Cash Balance on Starting Date | $20,100,000 |
Total Assets | $20,100,000 |
Liabilities and Capital | |
Liabilities | |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $0 |
Other Current Liabilities (interest-free) | $0 |
Total Liabilities | $0 |
Capital | |
Planned Investment | |
Investor 1 | $20,000,000 |
Investor 2 | $100,000 |
Other | $0 |
Additional Investment Requirement | $0 |
Total Planned Investment | $20,100,000 |
Loss at Start-up (Start-up Expenses) | $0 |
Total Capital | $20,100,000 |
Total Capital and Liabilities | $20,100,000 |
Total Funding | $20,100,000 |
Strategy and implementation summary, sales forecast forecast sales .">.
Sales Forecast | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Sales | |||||
Management Fees | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 |
Equity appreciation | $0 | $0 | $0 | $0 | $45,000,000 |
Total Sales | $400,000 | $400,000 | $400,000 | $400,000 | $45,400,000 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Management Fees | $0 | $0 | $0 | $0 | $0 |
Equity appreciation | $0 | $0 | $0 | $0 | $0 |
Subtotal Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 |
7.1 personnel plan.
This hypothetical company pays salaries to its partners and other employees, and office expenses, from the management fee of two percent (2%).
Personnel Plan | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Partners | $240,000 | $252,000 | $265,000 | $278,000 | $292,000 |
Other | $60,000 | $63,000 | $66,000 | $69,000 | $72,000 |
Total People | 4 | 4 | 4 | 4 | 4 |
Total Payroll | $300,000 | $315,000 | $331,000 | $347,000 | $364,000 |
8.1 projected profit and loss.
Please note that in the third year one investment is written off as a failure, producing a $5 million cost which ends up showing a loss for the year of nearly $5 million. The sale of equity at the end of the period enters the sales forecast and the profit and loss statement as a $45 million gain.
Pro Forma Profit and Loss | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Sales | $400,000 | $400,000 | $400,000 | $400,000 | $45,400,000 |
Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 |
Investment write-off | $0 | $0 | $5,000,000 | $0 | $0 |
Total Cost of Sales | $0 | $0 | $5,000,000 | $0 | $0 |
Gross Margin | $400,000 | $400,000 | ($4,600,000) | $400,000 | $45,400,000 |
Gross Margin % | 100.00% | 100.00% | -1150.00% | 100.00% | 100.00% |
Expenses | |||||
Payroll | $300,000 | $315,000 | $331,000 | $347,000 | $364,000 |
Sales and Marketing and Other Expenses | $13,200 | $13,900 | $14,600 | $15,300 | $16,000 |
Depreciation | $0 | $0 | $0 | $0 | $0 |
Leased Equipment | $2,400 | $2,500 | $2,600 | $2,700 | $2,800 |
Utilities | $1,200 | $1,300 | $1,400 | $1,500 | $1,600 |
Insurance | $2,400 | $2,500 | $2,600 | $2,700 | $2,800 |
Rent | $36,000 | $37,800 | $39,700 | $41,700 | $43,800 |
Payroll Taxes | $45,000 | $47,250 | $49,650 | $52,050 | $54,600 |
Other | $0 | $0 | $0 | $0 | $0 |
Total Operating Expenses | $400,200 | $420,250 | $441,550 | $462,950 | $485,600 |
Profit Before Interest and Taxes | ($200) | ($20,250) | ($5,041,550) | ($62,950) | $44,914,400 |
EBITDA | ($200) | ($20,250) | ($5,041,550) | ($62,950) | $44,914,400 |
Interest Expense | $0 | $0 | $0 | $0 | $0 |
Taxes Incurred | $0 | $0 | $0 | $0 | $8,982,880 |
Net Profit | ($200) | ($20,250) | ($5,041,550) | ($62,950) | $35,931,520 |
Net Profit/Sales | -0.05% | -5.06% | -1260.39% | -15.74% | 79.14% |
The Cash Flow shows four $5 million investments made in the first few months of the plan.
In the third year, one of the target companies fails, so $5 million is written off as failure. You’ll see that shows as a $5 million sale of long-term assets in the cash flow, and a balancing entry of $5 million in costs of sales in the profit and loss, making for a loss and write-off that year. The result is a tax loss, and the balance of investments goes to $15 Million.
In the fifth year, another investment is transacted at $50 million. This shows up as a $5 million equity appreciation in the Sales Forecast, plus a $5 million sale of long-term assets in the Cash Flow. At that point there’s been a $45 million profit and the balance of long-term assets goes down to $10 million.
The partners invest an additional $100,000 in the fourth year as additional working capital to balance the cash flow of the company.
Pro Forma Cash Flow | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Cash Received | |||||
Cash from Operations | |||||
Cash Sales | $400,000 | $400,000 | $400,000 | $400,000 | $45,400,000 |
Subtotal Cash from Operations | $400,000 | $400,000 | $400,000 | $400,000 | $45,400,000 |
Additional Cash Received | |||||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $5,000,000 | $0 | $5,000,000 |
New Investment Received | $0 | $0 | $0 | $100,000 | $0 |
Subtotal Cash Received | $400,000 | $400,000 | $5,400,000 | $500,000 | $50,400,000 |
Expenditures | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Expenditures from Operations | |||||
Cash Spending | $300,000 | $315,000 | $331,000 | $347,000 | $364,000 |
Bill Payments | $92,128 | $104,671 | $4,699,155 | $526,465 | $8,365,697 |
Subtotal Spent on Operations | $392,128 | $419,671 | $5,030,155 | $873,465 | $8,729,697 |
Additional Cash Spent | |||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Purchase Long-term Assets | $20,000,000 | $0 | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 | $0 | $0 |
Subtotal Cash Spent | $20,392,128 | $419,671 | $5,030,155 | $873,465 | $8,729,697 |
Net Cash Flow | ($19,992,128) | ($19,671) | $369,845 | ($373,465) | $41,670,303 |
Cash Balance | $107,872 | $88,201 | $458,045 | $84,580 | $41,754,883 |
You can see in the balance sheet how the ending balances for long-term assets were not re-valued. They remain at the original purchase price until they are sold, or written off as a complete loss. There is a $5 million write-off in the third year, and a sale of $5 million worth of assets in the last year. That sale of $5 million in assets produces the $5 million sale at book value plus the $45 million gain in the sales forecast and profit and loss table.
Pro Forma Balance Sheet | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Assets | |||||
Current Assets | |||||
Cash | $107,872 | $88,201 | $458,045 | $84,580 | $41,754,883 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $107,872 | $88,201 | $458,045 | $84,580 | $41,754,883 |
Long-term Assets | |||||
Long-term Assets | $20,000,000 | $20,000,000 | $15,000,000 | $15,000,000 | $10,000,000 |
Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 |
Total Long-term Assets | $20,000,000 | $20,000,000 | $15,000,000 | $15,000,000 | $10,000,000 |
Total Assets | $20,107,872 | $20,088,201 | $15,458,045 | $15,084,580 | $51,754,883 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Current Liabilities | |||||
Accounts Payable | $8,072 | $8,651 | $420,045 | $9,530 | $748,313 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $8,072 | $8,651 | $420,045 | $9,530 | $748,313 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $8,072 | $8,651 | $420,045 | $9,530 | $748,313 |
Paid-in Capital | $20,100,000 | $20,100,000 | $20,100,000 | $20,200,000 | $20,200,000 |
Retained Earnings | $0 | ($200) | ($20,450) | ($5,062,000) | ($5,124,950) |
Earnings | ($200) | ($20,250) | ($5,041,550) | ($62,950) | $35,931,520 |
Total Capital | $20,099,800 | $20,079,550 | $15,038,000 | $15,075,050 | $51,006,570 |
Total Liabilities and Capital | $20,107,872 | $20,088,201 | $15,458,045 | $15,084,580 | $51,754,883 |
Net Worth | $20,099,800 | $20,079,550 | $15,038,000 | $15,075,050 | $51,006,570 |
The Standard Industry Code (SIC) for this type of business is 7389, Business Services. The Industry Data is provided in the final column of the Ratios table.
Ratio Analysis | ||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Industry Profile | |
Sales Growth | 0.00% | 0.00% | 0.00% | 0.00% | 11250.00% | 8.20% |
Percent of Total Assets | ||||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 44.20% |
Total Current Assets | 0.54% | 0.44% | 2.96% | 0.56% | 80.68% | 74.30% |
Long-term Assets | 99.46% | 99.56% | 97.04% | 99.44% | 19.32% | 25.70% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 0.04% | 0.04% | 2.72% | 0.06% | 1.45% | 49.00% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 13.80% |
Total Liabilities | 0.04% | 0.04% | 2.72% | 0.06% | 1.45% | 62.80% |
Net Worth | 99.96% | 99.96% | 97.28% | 99.94% | 98.55% | 37.20% |
Percent of Sales | ||||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 100.00% | 100.00% | -1150.00% | 100.00% | 100.00% | 0.00% |
Selling, General & Administrative Expenses | 100.05% | 105.06% | 110.39% | 115.74% | 20.86% | 81.40% |
Advertising Expenses | 0.30% | 0.33% | 0.35% | 0.38% | 0.00% | 1.70% |
Profit Before Interest and Taxes | -0.05% | -5.06% | -1260.39% | -15.74% | 98.93% | 2.10% |
Main Ratios | ||||||
Current | 13.36 | 10.20 | 1.09 | 8.88 | 55.80 | 1.49 |
Quick | 13.36 | 10.20 | 1.09 | 8.88 | 55.80 | 1.17 |
Total Debt to Total Assets | 0.04% | 0.04% | 2.72% | 0.06% | 1.45% | 62.80% |
Pre-tax Return on Net Worth | 0.00% | -0.10% | -33.53% | -0.42% | 88.06% | 4.20% |
Pre-tax Return on Assets | 0.00% | -0.10% | -32.61% | -0.42% | 86.78% | 11.30% |
Additional Ratios | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Net Profit Margin | -0.05% | -5.06% | -1260.39% | -15.74% | 79.14% | n.a |
Return on Equity | 0.00% | -0.10% | -33.53% | -0.42% | 70.44% | n.a |
Activity Ratios | ||||||
Accounts Payable Turnover | 12.41 | 12.17 | 12.17 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 29 | 15 | 676 | 15 | n.a |
Total Asset Turnover | 0.02 | 0.02 | 0.03 | 0.03 | 0.88 | n.a |
Debt Ratios | ||||||
Debt to Net Worth | 0.00 | 0.00 | 0.03 | 0.00 | 0.01 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||||
Net Working Capital | $99,800 | $79,550 | $38,000 | $75,050 | $41,006,570 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||||
Assets to Sales | 50.27 | 50.22 | 38.65 | 37.71 | 1.14 | n.a |
Current Debt/Total Assets | 0% | 0% | 3% | 0% | 1% | n.a |
Acid Test | 13.36 | 10.20 | 1.09 | 8.88 | 55.80 | n.a |
Sales/Net Worth | 0.02 | 0.02 | 0.03 | 0.03 | 0.89 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Management Fees | 2% | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 |
Equity appreciation | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Sales | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Management Fees | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Equity appreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Partners | 0% | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 |
Other | 0% | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 |
Total People | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | |
Total Payroll | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Tax Rate | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | |
Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Investment write-off | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Gross Margin | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | |
Gross Margin % | 0.00% | 0.00% | 100.00% | 0.00% | 0.00% | 100.00% | 0.00% | 0.00% | 100.00% | 0.00% | 0.00% | 100.00% | |
Expenses | |||||||||||||
Payroll | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
Sales and Marketing and Other Expenses | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | $1,100 | |
Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Leased Equipment | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Utilities | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
Insurance | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Rent | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | |
Payroll Taxes | 15% | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 | $3,750 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | |
Profit Before Interest and Taxes | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | |
EBITDA | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | |
Interest Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | |
Net Profit/Sales | 0.00% | 0.00% | 66.65% | 0.00% | 0.00% | 66.65% | 0.00% | 0.00% | 66.65% | 0.00% | 0.00% | 66.65% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | |
Subtotal Cash from Operations | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | $0 | $0 | $100,000 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
Bill Payments | $278 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | |
Subtotal Spent on Operations | $25,278 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $5,000,000 | $5,000,000 | $5,000,000 | $5,000,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $5,025,278 | $5,033,350 | $5,033,350 | $5,033,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | $33,350 | |
Net Cash Flow | ($5,025,278) | ($5,033,350) | ($4,933,350) | ($5,033,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | ($33,350) | ($33,350) | $66,650 | |
Cash Balance | $15,074,722 | $10,041,372 | $5,108,022 | $74,672 | $41,322 | $107,972 | $74,622 | $41,272 | $107,922 | $74,572 | $41,222 | $107,872 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $20,100,000 | $15,074,722 | $10,041,372 | $5,108,022 | $74,672 | $41,322 | $107,972 | $74,622 | $41,272 | $107,922 | $74,572 | $41,222 | $107,872 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $20,100,000 | $15,074,722 | $10,041,372 | $5,108,022 | $74,672 | $41,322 | $107,972 | $74,622 | $41,272 | $107,922 | $74,572 | $41,222 | $107,872 |
Long-term Assets | |||||||||||||
Long-term Assets | $0 | $5,000,000 | $10,000,000 | $15,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 |
Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Long-term Assets | $0 | $5,000,000 | $10,000,000 | $15,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 | $20,000,000 |
Total Assets | $20,100,000 | $20,074,722 | $20,041,372 | $20,108,022 | $20,074,672 | $20,041,322 | $20,107,972 | $20,074,622 | $20,041,272 | $20,107,922 | $20,074,572 | $20,041,222 | $20,107,872 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $0 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $0 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 | $8,072 |
Paid-in Capital | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 | $20,100,000 |
Retained Earnings | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Earnings | $0 | ($33,350) | ($66,700) | ($50) | ($33,400) | ($66,750) | ($100) | ($33,450) | ($66,800) | ($150) | ($33,500) | ($66,850) | ($200) |
Total Capital | $20,100,000 | $20,066,650 | $20,033,300 | $20,099,950 | $20,066,600 | $20,033,250 | $20,099,900 | $20,066,550 | $20,033,200 | $20,099,850 | $20,066,500 | $20,033,150 | $20,099,800 |
Total Liabilities and Capital | $20,100,000 | $20,074,722 | $20,041,372 | $20,108,022 | $20,074,672 | $20,041,322 | $20,107,972 | $20,074,622 | $20,041,272 | $20,107,922 | $20,074,572 | $20,041,222 | $20,107,872 |
Net Worth | $20,100,000 | $20,066,650 | $20,033,300 | $20,099,950 | $20,066,600 | $20,033,250 | $20,099,900 | $20,066,550 | $20,033,200 | $20,099,850 | $20,066,500 | $20,033,150 | $20,099,800 |
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The possibility for substantial financial gains is one of the main advantages of an investment company. As the company expands and gains customers, it has the potential to generate large fees and commissions based on investment portfolios.
Are you looking for the same rewards? Then go on with planning everything first.
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Writing an investment company business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:
An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.
Here are a few key components to include in your executive summary:
Ensure your executive summary is clear, concise, easy to understand, and jargon-free.
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The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:
This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.
The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.
Here are a few tips for writing the market analysis section of your investment company business plan:
The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:
In short, this section of your investment business plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.
Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:
Overall, this section of your investment company business plan should focus on customer acquisition and retention.
Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your investment business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.
The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:
Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.
The management team section provides an overview of your investment business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.
This section should describe the key personnel for your investment company, highlighting how you have the perfect team to succeed.
Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:
Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.
The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.
Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.
Remember, the appendix section of your investment firm business plan should only include relevant and important information supporting your plan’s main content.
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This sample investment company business plan will provide an idea for writing a successful investment company plan, including all the essential components of your business.
After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our investment company business plan pdf .
Frequently asked questions, why do you need an investment company business plan.
A business plan is an essential tool for anyone looking to start or run a successful investment business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.
Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your investment company.
There are several ways to get funding for your investment company, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:
Crowdfunding, angel investors.
Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.
There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your investment company business plan and outline your vision as you have in your mind.
A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any investment company business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .
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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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Are you looking to start your own investment bank? It's an exciting venture that requires careful planning and strategic decision-making. In this blog post, we will guide you through the process of writing a business plan for an investment bank in 9 essential steps . But first, let's take a look at the latest statistics and growth trends in this industry.
The investment banking industry has been experiencing steady growth over the past few years. According to market research , the global investment banking market size was valued at $78.3 billion in 2020 and is projected to reach $108 billion by 2027. This indicates a compound annual growth rate (CAGR) of 4.6% from 2021 to 2027. The growing demand for financial services and the rise of corporate restructuring activities are major factors contributing to this growth.
Now that we have a glimpse of the industry's potential, let's dive into the step-by-step process of writing a business plan for your investment bank. These steps will help you lay a solid foundation and position your bank for success in a competitive market.
By following these steps, you will be well-prepared to write a comprehensive business plan for your investment bank. Stay tuned for the detailed guide on each of these steps in our upcoming blog posts.
Market research is a crucial step in the process of writing a business plan for an investment bank. It provides valuable insights into the current market conditions, industry trends, and customer preferences. By conducting thorough market research, you can gather essential information that will help you make informed decisions and develop a successful business strategy.
Here are some important aspects to consider when conducting market research:
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Identifying the target market and potential clients is a crucial step in developing a successful business plan for an investment bank. This step allows you to understand who your services will cater to and how you can effectively reach them.
1. Conduct market research: Start by conducting thorough market research to gain insights into the financial industry and the specific needs of your target market. Look at industry reports, market trends, and customer preferences to identify potential gaps or opportunities.
2. Define your niche: Determine the specific niche or area of expertise within the financial services industry that your investment bank will focus on. This could be a particular industry sector, geographical location, or specialized financial products.
3. Segment your target market: Divide the market into specific segments based on demographic, geographic, psychographic, and behavioral characteristics. This segmentation will help you define customer profiles and tailor your services to their unique needs.
4. Determine ideal clients: Identify the characteristics of your ideal clients within each market segment. Consider factors such as their financial goals, investment preferences, company size, and potential for long-term business relationships.
5. Evaluate competition: Research and analyze your competitors to understand their target markets and the services they offer. This analysis will help you identify gaps in the market that your investment bank can fill and differentiate your services from the competition.
By identifying your target market and potential clients, you can develop a business plan that aligns with their needs and positions your investment bank as the preferred choice in the market. This step lays the foundation for the next stages of your business plan, such as defining your services, creating a marketing strategy, and projecting financials.
Assessing the competition and industry trends is a crucial step in developing a business plan for an investment bank. By conducting a thorough analysis of the competitive landscape, you can gain valuable insights into the market dynamics and identify potential opportunities and challenges.
To assess the competition, start by identifying the key players in the investment banking industry. Look at both local and global banks that offer similar services and target a similar client base. Analyze their strengths, weaknesses, and market positioning. This will help you understand what sets your bank apart and how you can differentiate yourself.
Industry trends play a significant role in shaping the future of investment banking. Stay up-to-date with the latest developments, regulatory changes, and emerging technologies that are impacting the industry. This will help you anticipate shifts in customer preferences and adapt your business strategy accordingly.
When writing a business plan for an investment bank, it is crucial to determine and define the services and product offerings that your bank will provide. This step is essential in order to clearly communicate to potential investors and clients what your bank brings to the table and how it differentiates itself from competitors.
To start, conduct a thorough analysis of the market to identify the specific financial services that are in demand and that align with your bank's expertise and target market. This analysis will help you identify the unique value proposition that your bank can offer.
Once you have identified the services that your bank will provide, define them in detail in your business plan. Outline the specific features and benefits of each service and how they can meet the needs of your target market. Additionally, explain how these services will be delivered and any unique approaches or methodologies that your bank will employ.
It is important to consider that as an investment bank, your services and product offerings should be comprehensive and tailored to the specific needs of your clients. This may include capital raising services, securities trading, financial advisory, corporate finance, and asset management. The ability to offer a full range of financial solutions is often a key differentiator for investment banks.
By determining and defining your services and product offerings, you can effectively position your investment bank in the market and attract clients who are in need of the specialized financial solutions that your bank provides.
In order to build a successful investment bank, it is essential to develop a strategic business model that outlines how the bank will operate and achieve its goals. This model will serve as the foundation for the bank's operations and will guide decision-making processes.
1. Define your value proposition: Start by identifying the unique value that your investment bank will bring to the market. Determine what sets your bank apart from competitors and how you will differentiate yourself in terms of the services and products you offer. This will help you attract clients and build a strong customer base.
2. Assess the market demand: Analyze the market to understand the demand for the services your bank aims to provide. Identify potential clients and target markets, and determine how your bank can meet their specific financial needs. This will help you narrow down your focus and tailor your services accordingly.
3. Identify revenue streams: Determine how your bank will generate revenue. Explore different revenue streams, such as fees for financial advisory services, commissions from securities trading, or management fees for asset management. Understand the profitability of each revenue stream and prioritize them based on their potential impact on your business.
4. Build partnerships: Consider forming strategic partnerships with other financial institutions or service providers. Collaborating with established players in the industry can give your bank access to valuable resources, expertise, and a wider network of potential clients. Look for opportunities to create mutually beneficial partnerships that can enhance your bank's offerings.
By developing a strategic business model, you will have a clear roadmap for your investment bank's success. It will help you make informed decisions, allocate resources effectively, and position your bank as a trusted and reliable financial partner in the market.
Once you have conducted market research, identified your target market, and defined your services and product offerings, it is crucial to establish a strong legal structure for your investment bank. This will not only ensure compliance with regulatory requirements, but also safeguard your business and its stakeholders. Here are the key steps to follow:
By establishing a strong legal structure and obtaining the necessary licenses, you are demonstrating your commitment to operating your investment bank ethically and within the boundaries of the law. This will not only instill confidence in potential clients and investors, but also serve as a solid foundation for your bank's long-term success.
When developing a staffing and recruitment strategy for your investment bank, it is crucial to consider the specific needs of your business and the skills required to deliver your services effectively. Below are some key steps to help you determine your staffing and recruitment strategy:
Creating a comprehensive financial projection is a crucial step in writing a business plan for an investment bank . It allows you to forecast and estimate the financial performance of your bank over a specific period, usually three to five years. A well-prepared financial projection demonstrates to potential investors and lenders that you have a clear understanding of your bank's revenue, expenses, and profitability.
Here are some important elements to consider when creating a comprehensive financial projection:
By creating a comprehensive financial projection, you can demonstrate the financial viability and potential profitability of your investment bank. This will instill confidence in potential investors and lenders, increasing your chances of securing the necessary funding to turn your business idea into a reality.
Once you have determined your target market, identified potential clients, and assessed your competition, it is crucial to define a marketing and sales strategy that will effectively reach and attract your target audience.
Firstly, you need to clearly outline your unique selling proposition (USP) – what sets your investment bank apart from the competition and why clients should choose your services. This will form the foundation of your marketing and sales messaging, helping you differentiate yourself in a crowded market.
Identify the most effective marketing channels to reach your target market. This could include traditional methods such as print advertising, industry events, and networking, as well as digital channels like social media, content marketing, and search engine optimization. Determine which channels are most relevant to your audience and allocate resources accordingly.
Next, develop a comprehensive marketing plan outlining specific tactics and initiatives to promote your services. This plan should include a mix of online and offline strategies tailored to your target market, ensuring consistency in messaging and brand identity across all channels.
In addition to marketing, it is crucial to establish an effective sales strategy to convert leads into clients. This involves defining your target audience's buying journey and creating a sales process that guides potential clients through each stage. Determine the specific actions, resources, and tools your sales team will need to effectively engage and convert leads into loyal customers.
Regularly track and measure the success of your marketing and sales efforts. Monitor key performance indicators (KPIs) such as lead generation, conversion rates, and customer retention to identify areas for improvement and make data-driven adjustments to your strategy.
By defining a well-thought-out marketing and sales strategy, you will increase your chances of attracting and retaining clients, setting your investment bank on the path to success.
In conclusion, writing a business plan for an investment bank requires careful consideration and thorough research. By following the nine steps outlined in this checklist, entrepreneurs can create a comprehensive and well-defined plan that will attract potential investors and set their business up for success. Conducting market research, identifying target markets, assessing competition, and defining services and product offerings are all essential aspects of developing a strong business plan for an investment bank. Additionally, establishing a legal structure, determining staffing strategy, creating financial projections, and defining marketing and sales strategies are crucial steps in ensuring the bank's long-term viability and profitability. By carefully following these steps, entrepreneurs can position their investment bank to thrive in the competitive financial industry.
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Written by Dave Lavinsky
You’ve come to the right place to create your Investment Company business plan.
We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Investment Companies.
Below is a template to help you create each section of your Investment Company business plan.
Business overview.
NovaGrowth Investments is a startup investment company located in Aurora, Colorado. The company is founded by Thom Anderson, an investment broker from Colorado Springs, Colorado, who has amassed millions of dollars for his clients over ten years while working at Clear River Investments. Because Thom has gained an extensive following of clients who have already indicated they will follow him to his new investment company, he has made the initial steps into forming NovaGrowth Investments. Thom plans on recruiting a team of highly-qualified professionals to help manage the day-to-day operations of a premier investment company in every aspect of marketing and advising in the land acquisition investment company.
NovaGrowth Investments will provide a wide array of services for investors, in particular those related to the optimal attention and time needed to secure valuable investments on their behalf. Investors can feel confident and secure, knowing that Thom and his team are looking out for their interests in every aspect of the land acquisition process. What’s more, NovaGrowth offers customized guarantees of investment performance that are singular within the investment company industry.
The following are the services that NovaGrowth Investments will provide:
NovaGrowth Investments will target individual investors. They will also target corporate investors who are seeking land acquisitions. They will target fast-growing companies known to be seeking additional tracts of land. NovaGrowth Investments will target industry partners (cattle ranchers, horse breeders, etc) that could benefit from land acquisition as an investment.
NovaGrowth Investments will be owned and operated by Thom Anderson. He recruited Jackson Byers and Kylie Carlson to manage the day-to-day operations of the investment company and oversee human resources.
Thom Anderson is a graduate of Cambridge University in the U.K., where he graduated with an International Business bachelor’s degree. He spent five years in the U.K. sourcing land for a large investment firm as an entry-level investment advisor.
Upon his return to the U.S.,Thom obtained his investment broker’s license and was employed by Clear River Investments in Colorado Springs, Colorado. Within one year, Thom secured over 5M in investments for his clients and, within five years, he amassed over 25M in land acquisition investments on behalf of his clients.
Jackson Byers is a graduate of the University of Illinois, where he graduated with a master’s degree in Accounting. His former role at Clear River Investments was as the Associate Accountant, where he managed the normal business accounting processes for the firm. He will serve as the Staff Accountant in the startup company and will assist in overseeing the day-to-day operations of the firm.
Kylie Carlson was hired by Thom Anderson as his Assistant and worked for him at Clear River Investments for over ten years. Her new role will be the Human Resources Manager, overseeing personnel and the processes that are regulated and required by Colorado.
NovaGrowth Investments will be able to achieve success by offering the following competitive advantages:
NovaGrowth Investments is seeking $200,000 in debt financing to launch its NovaGrowth Investments. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the marketing costs. The breakout of the funding is below:
The following graph outlines the financial projections for NovaGrowth Investments.
Who is novagrowth investments.
NovaGrowth Investments is a newly established, full-service investment company in Aurora, Colorado. NovaGrowth Investments will be the most reliable, effective and value-driven choice for private and commercial investors in Aurora and the surrounding communities. NovaGrowth Investments will provide a comprehensive menu of portfolio and land acquisition services for any potential investor to utilize. Their full-service approach includes a comprehensive seminar and helpful introductory information for first-time investors.
NovaGrowth Investments will be able to manage the investments and acquire new investments for their clients. The team of professionals are highly qualified and experienced in investment brokerage and land acquisitions. NovaGrowth Investments removes all headaches and issues of trying to locate safe and secure investments and ensures all issues are taken care of expeditiously while delivering the best customer service.
Thom Anderson is a graduate of Cambridge University in the U.K., where he graduated with an International Business bachelor’s degree. He spent five years in the U.K. sourcing land for a large investment firm as an entry-level investment advisor. Upon his return to the U.S.,Thom obtained his investment broker’s license and was employed by Clear River Investments in Colorado Springs, Colorado. Within one year, Thom secured over 5M in investments for his clients and, within five years, he amassed over 25M in land acquisition investments on behalf of his clients.
Since incorporation, NovaGrowth Investments has achieved the following milestones:
The following will be the services NovaGrowth Investments will provide:
The investment company industry is expected to grow over the next five years to over $1.3 trillion. The growth will be driven by ongoing vast opportunities for individuals and organizations seeking to grow their wealth The growth will be driven by new technology that navigating the complexities of the financial markets The growth will be driven by an increase in the interest of individuals in “making their own way” in the world The growth will be driven by the stability of land ownership as an on-going and important element in investment portfolios.
Costs will likely be reduced as technology continues to advance, allowing better-informed acquisition interest and supplemental risk mitigation Costs will likely be reduced as younger investors, such as Gen Z and millennials, continue to express an interest and desire for land acquisition investments, which indicates an increased number of sellers will enter the market due to favorable conditions.
Demographic profile of target market.
NovaGrowth Investments will target those potential individual investors in Aurora, Colorado. They will target businesses with a track record of land investments or a need for land due to company growth. NovaGrowth Investments will target industry partners (cattle ranchers, horse breeders, etc) that could benefit from land acquisition as an investment.
Total | Percent | |
---|---|---|
Total population | 1,680,988 | 100% |
Male | 838,675 | 49.9% |
Female | 842,313 | 50.1% |
20 to 24 years | 114,872 | 6.8% |
25 to 34 years | 273,588 | 16.3% |
35 to 44 years | 235,946 | 14.0% |
45 to 54 years | 210,256 | 12.5% |
55 to 59 years | 105,057 | 6.2% |
60 to 64 years | 87,484 | 5.2% |
65 to 74 years | 116,878 | 7.0% |
75 to 84 years | 52,524 | 3.1% |
NovaGrowth Investments will primarily target the following customer profiles:
Direct and indirect competitors.
NovaGrowth Investments will face competition from other companies with similar business profiles. A description of each competitor company is below.
CapitalMax Advisors is a startup investment company in Colorado Springs, Colorado. The owner, Barry Jackson, is a graduate of Purdue University and has been an investment advisor for over ten years. He recently launched Capital Max Advisors to meet what he coined, “The Great Asset Allocation” investment opportunities within the city of Colorado Springs. Barry has hired ten associates from his former employer’s company to seek investors who are primarily interested in asset allocation investments and the company is promising reduced portfolio management rates for the first six months of business.
CapitalMax Advisors is a full-service investment company with a strong following of investors who were delighted by Barry’s performance on their behalf at his former employer. The expectation is that CapitalMax Advisors will live up to their primary purpose, which is to oversee and direct asset allocation to maximize returns in substantial numbers.
Owned by Tamara and Loren Downs, WealthWise Investments is known for it’s assertive actions on behalf of clients. The company was founded in 2010 and currently offers a diverse range of investment products and services. They specialize in ETFs, mutual funds, and alternative investments. WealthWise Investments is known for its expertise in risk management, technology-driven investment strategies, and statewide reach beyond it’s home city of Colorado Springs.
WealthWise Investments offers excellent services to clients; however, clients have noted publicly that the fees and service charges are high in tandem with the asset allocation gains. There have been two complaints noted with the state regulatory agencies. Meanwhile, Tamara and Loren Downs continue to employ efforts to bring technology-driven tools into the investment company that will trim staff and distribute higher rates on behalf of investors.
FinTech Capital Management is a five-year-old company located in Denver, Colorado. The focus of the company is on financial technology investments on behalf of their client investors. Currently, the company has recorded stable and growing levels of profitability and has been tagged as an investment management firm known for its expertise in mutual funds and retirement planning They offer a sizable range of investment strategies, including equity, fixed income, and asset allocation funds. They are tech-driven and focus on research-driven investment decisions to fulfill the goals of their clients in long-term wealth creation.
In addition to tech acquisitions, FinTech Capital Management is also directed toward senior investors, with brokerage, retirement planning, wealth management, and mutual funds in their services offered. They provide a range of investment options, from individual stocks and bonds to managed portfolios and retirement accounts, many of which are perfect for those investors who have amassed a sizable portfolio, but are becoming risk-averse as they age. FinTech Capital Management is owned by The Thurgood Family Trust with the Thurgood brothers, Jonathan and Regis, responsible for day-to-day management. It has been recently suggested that the firm may be sold if the right buyers were to approach.
NovaGrowth Investments will be able to offer the following advantages over their competition:
Brand & value proposition.
NovaGrowth Investments will offer the unique value proposition to its clientele:
The promotions strategy for NovaGrowth Investments is as follows:
Word of Mouth/Referrals
Thom Anderson has built up an extensive list of contacts over the years by providing exceptional service and expertise to former clients and potential investors. The contacts and clients will follow him to his new company and help spread the word of NovaGrowth Investments.
Professional Associations and Networking
The executives within NovaGrowth Investments will begin networking in professional associations and at events within the city-wide industry groups. This will bring the new startup into focus for other companies, providing a path to increased clients and strategic partnerships within the city.
Social Media Marketing
NovaGrowth Investments will target their primary and secondary audiences with a series of text announcements via social media. The announcements will be invitations to the opening of the company, with a champagne reception and information regarding the services available at NovaGrowth Investments. The social media announcements will continue for the three weeks prior to the launch of the company.
Website/SEO Marketing
NovaGrowth Investments will fully utilize their website. The website will be well organized, informative, and list the services that NovaGrowth Investments provides. The website will also list their contact information and biographies of the executive group. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Investment company” or “Investment opportunities near me,” NovaGrowth Investments will be listed at the top of the search results.
The pricing of NovaGrowth Investments will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.
The following will be the operations plan for NovaGrowth Investments. Operation Functions:
NovaGrowth Investments will have the following milestones completed in the next six months.
Key revenue & costs.
The revenue drivers for NovaGrowth Investments are the fees they will charge to clients for their investment acquisition and portfolio management services.
The cost drivers will be the overhead costs required in order to staff NovaGrowth Investments. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.
NovaGrowth Investments is seeking $200,000 in debt financing to launch its investment company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
Income statement.
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
Revenues | ||||||
Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
Expenses & Costs | ||||||
Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
ASSETS | ||||||
Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
LIABILITIES & EQUITY | ||||||
Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
Share Capital | $0 | $0 | $0 | $0 | $0 | |
Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
CASH FLOW FROM OPERATIONS | ||||||
Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
CASH FLOW FROM INVESTMENTS | ||||||
Investment | ($180,950) | $0 | $0 | $0 | $0 | |
Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
CASH FLOW FROM FINANCING | ||||||
Cash from equity | $0 | $0 | $0 | $0 | $0 | |
Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
What is an investment company business plan.
An investment company business plan is a plan to start and/or grow your investment company business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Investment Company business plan using our Investment Company Business Plan Template here .
There are a number of different kinds of investment company businesses , some examples include: Closed-End Funds Investment Company, Mutual Funds (Open-End Funds) Investment Company, and Unit Investment Trusts (UITs) Investment Company.
Investment Company businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
Starting an investment company business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop An Investment Company Business Plan - The first step in starting a business is to create a detailed investment company business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your investment company business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your investment company business is in compliance with local laws.
3. Register Your Investment Company Business - Once you have chosen a legal structure, the next step is to register your investment company business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your investment company business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Investment Company Equipment & Supplies - In order to start your investment company business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your investment company business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful investment company business:
Crafting a comprehensive business plan as an investment banker or entrepreneur is no walk in the park. It requires a detailed roadmap of your business model, financial forecasts, and market strategies to entice investors. Enter ClickUp's Investment Banker Business Plan Template—the ultimate tool to elevate your pitch game!
With this template, you can:
Ready to make your business dreams a reality? Try ClickUp's Investment Banker Business Plan Template today!
Crafting a solid business plan is crucial for securing funding and setting your business up for success in the competitive world of investment banking. The Investment Banker Business Plan Template offers numerous benefits, including:
To create a comprehensive business plan for your investment banking needs, utilize ClickUp’s Investment Banker Business Plan Template, which includes:
Ensure a structured and organized approach to your investment banking business plan with ClickUp's versatile template, streamlining the process for potential investors and financial success.
Crafting a comprehensive and effective business plan as an investment banker is crucial for success. follow these steps to make the most out of the investment banker business plan template in clickup:, 1. define your business objectives.
Before diving into the template, clearly outline your business objectives. Are you aiming to expand your client base, increase revenue, or launch a new service? Understanding your goals will help shape the rest of your business plan.
Utilize the Goals feature in ClickUp to set and track your business objectives effectively.
Conduct a thorough market analysis to identify trends, competitors, and potential opportunities. Understanding the market landscape will help you position your business effectively and make informed decisions.
Use the Board view in ClickUp to visually map out your market analysis and competitor research.
Outline a detailed financial strategy that includes revenue projections, expense forecasts, and profit margins. This will give you a clear picture of your financial health and help you make strategic financial decisions.
Utilize the Gantt chart feature in ClickUp to create a timeline for your financial strategy implementation.
Detail the steps you need to take to achieve your business objectives. Break down tasks, set deadlines, and assign responsibilities to ensure smooth execution of your business plan.
Use Automations in ClickUp to streamline task assignments and notifications for seamless execution.
Regularly monitor key performance indicators (KPIs) outlined in your business plan to track progress. Analyze your performance against set goals and be ready to make adjustments as needed to stay on track.
Utilize the Dashboard feature in ClickUp to create a customized dashboard with real-time data to monitor your business plan's progress effectively.
Investment bankers and entrepreneurs can utilize the Investment Banker Business Plan Template in ClickUp to craft a comprehensive business plan for potential investors.
To get started, click on “Add Template” to incorporate the Investment Banker Business Plan Template into your Workspace. Ensure you select the appropriate Space or location within your Workspace.
Next, invite key team members or stakeholders to your Workspace to begin collaborating on the business plan.
Here's how you can leverage the template to create a compelling business plan:
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BizFundingResource.com
Investment Bank Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Investment Bank Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an Investment Bank business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
Your Business Planning Package will be immediately emailed to you after you make your purchase.
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Investment banks are a highly important part of the capital market. These companies are able to source investments, underwrite their securities, and bring shares to the general public. Additionally, and over the last 30 years – many investment banks have gone on to provide a number of other services outside of securities underwriting. These companies have become one-stop shops for many businesses that are looking to raise capital, seller business, acquire business, and engage in specialized financing activities. Many investment banks are now completely integrated with their commercial banking counterparts. As such, these businesses are always able to remain profitable and cash flow positive at all times. While there is no standard textbook definition for an investment bank as many companies call themselves, most commonly the companies are that are considered true investment banks engage thoroughly in securities underwriting. These businesses are able to charge anywhere from 3% to 10% of the overall offering.
Any major financial institution or investment bank needs a business plan. This document should include a three-year to five-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, business ratios page, and lending rush ratios page. Many investment banks focus heavily on the income that is derived not only from securities underwriting but also asset management as well. Asset management has become one of the most major aspects for most investment banks as it generates highly recurring streams of revenue from the monthly fees that are debited from a customer’s account. Within the business plan as well, a full discussion regarding the target market should be included. This includes a number of businesses in the target market, their annual revenues, distribution of industries covered, and other relevant information relating to the businesses that the investment bank we working with from the onset of operations as well as through a five-year time..
An investment bank marketing plan is also essential to having this business become successful. Most importantly, many investment banks work with marketing firms that have a specialized expertise in financial firms given that certain disclosures must be made as part of their overall marketing campaign. Most investment banks have their attorneys thoroughly review any materials that are distributed to the general public given that certain disclosures must be made in accordance with regulations and laws. A presence on the Internet is now mandated for pretty much every financial firm that wants to be successful given that most companies will first search online to see the operating history of an investment bank for they choose to do business with them.
An investment bank SWOT analysis is frequently developed as well. This analysis focuses on the strengths, weaknesses, opportunities, and threats that are common within this industry. As it relates the strengths, most investment banks are always able to remain profitable as companies are to continue to need capital in order to expand their operations. As these banks work with a number of different industries – many of whom are immune from negative economic changes – their ability to remain profitable in all economic climates is very stable. For weaknesses, this is a highly regulated industry and any investment bank is going to need to have a substantial number of compliance officers in place to make sure that are operating within the letter of the law at all times. Pertaining to opportunities, many financial firms will look to hire associate bankers, acquire third-party investment banking firms, and develop new service lines in order to boost their revenues on a year-to-year basis. For threats, many investment banks face ongoing changes in regulatory matters. This trend is not expected to change anytime soon and it can be expected that having to deal with complex regulatory issues will be something that an investment bank needs to deal with in perpetuity.
Regulation and investment banking.
Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.
Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.
Ellen Lindner / Investopedia
Investment banking is a type of banking that organizes large, complex financial transactions such as mergers or initial public offering (IPO) underwriting. These banks may raise money for companies in a variety of ways, including underwriting the issuance of new securities for a corporation, municipality, or other institution. They may manage a corporation's IPO. Investment banks also provide advice in mergers, acquisitions, and reorganizations.
In essence, investment bankers are experts who have their fingers on the pulse of the current investment climate. They help their clients navigate the complex world of high finance.
Investment banks underwrite new debt and equity securities for all types of corporations, aid in the sale of securities, and help facilitate mergers and acquisitions , reorganizations, and broker trades for institutions and private investors. Investment banks also provide guidance to issuers regarding the offering and placement of stock.
Many large investment banking systems are affiliated with or subsidiaries of larger banking institutions, and many have become household names, the largest being Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America Merrill Lynch, and Deutsche Bank.
Broadly speaking, investment banks assist in large, complicated financial transactions. They may provide advice on how much a company is worth and how best to structure a deal if the investment banker's client is considering an acquisition, merger, or sale.
Investment banks' activities also may include issuing securities as a means of raising money for client groups and creating the documentation for the U.S. Securities and Exchange Commission (SEC) necessary for a company to go public.
Investment banks employ investment bankers who help corporations, governments, and other groups plan and manage large projects , saving their clients time and money by identifying risks associated with the project before the client moves forward.
In theory, investment bankers are experts who have their finger on the pulse of the current investing climate, so businesses and institutions turn to investment banks for advice on how best to plan their development, as investment bankers can tailor their recommendations to the present state of economic affairs.
The Glass-Steagall Act was passed in 1933 after the 1929 stock market crash led to massive bank failures. The purpose of the law was to separate commercial and investment banking activities. The mixing of commercial and investment banking activities was considered very risky and may have worsened the 1929 crash.
This is because, when the stock market crashed, investors rushed to draw their money from banks to meet margin calls and for other purposes, but some banks were unable to honor these requests because they too had invested their clients' money in the stock market.
Before Glass-Steagall was passed, banks could divert retail depositors' funds into speculative operations such as investing in the equity markets. As such operations became more lucrative, banks took larger and larger speculative positions, eventually putting depositors' funds at risk.
However, the stipulations of the act were considered harsh by some in the financial sector, and Congress eventually repealed the Glass-Steagall Act in 1999. The Gramm-Leach-Bliley Act of 1999 thus eliminated the separation between investment and commercial banks. Since the repeal, most major banks have resumed combined investment and commercial banking operations.
Essentially, investment banks serve as middlemen between a company and investors when the company wants to issue stock or bonds. The investment bank assists with pricing financial instruments to maximize revenue and with navigating regulatory requirements.
Often, when a company holds its IPO, an investment bank will buy all or much of that company's shares directly from the company.
Subsequently, as a proxy for the company launching the IPO, the investment bank will sell the shares on the market. This makes things much easier for the company itself, as it effectively contracts out the IPO to the investment bank.
Moreover, the investment bank stands to make a profit, as it will generally price its shares at a markup from what it initially paid for them. In doing so, it also takes on a substantial amount of risk.
Although experienced analysts use their expertise to accurately price the stock as best they can, the investment bank can lose money on the deal if it turns out that it has overvalued the stock, as in this case, it will often have to sell the stock for less than it initially paid for it.
Suppose that Pete's Paints Co., a chain supplying paints and other hardware, wants to go public. Pete, the owner, gets in touch with José, an investment banker working for a larger investment banking firm.
Pete and José strike a deal wherein José (on behalf of his firm) agrees to buy 100,000 shares of Pete's Paints for the company's IPO at the price of $24 per share, a price at which the investment bank's analysts arrived after careful consideration.
The investment bank pays $2.4 million for the 100,000 shares and, after filing the appropriate paperwork, begins selling the stock for $26 per share. However, the investment bank is unable to sell more than 20% of the shares at this price and is forced to reduce the price to $23 per share to sell the remaining shares.
For the IPO deal with Pete's Paints, then, the investment bank has made $2.36 million [(20,000 × $26) + (80,000 × $23) = $520,000 + $1,840,000 = $2,360,000]. In other words, José's firm has lost $40,000 on the deal because it overvalued Pete's Paints.
Investment banks often compete with one another to secure IPO projects, which can force them to increase the price they are willing to pay to secure the deal with the company that is going public. If competition is particularly fierce, this can lead to a substantial blow to the investment bank's bottom line.
Most often, however, there will be more than one investment bank underwriting securities in this way, rather than just one. While this means that each investment bank has less to gain, it also means that each one will have reduced risk.
Broadly speaking, investment banks assist in large, complicated financial transactions . They may provide advice on how much a company is worth and how best to structure a deal if the investment banker's client is considering an acquisition, merger, or sale.
Essentially, their services include underwriting new debt and equity securities for all types of corporations, providing aid in the sale of securities, and helping to facilitate mergers and acquisitions, reorganizations, and broker trades for both institutions and private investors. They also may issue securities as a means of raising money for the client groups and create the necessary U.S. Securities and Exchange Commission (SEC) documentation for a company to go public.
Investment banks employ people who help corporations, governments, and other groups plan and manage large projects, saving their clients time and money by identifying risks associated with the project before the client moves forward. In theory, investment bankers should be experts who have their finger on the pulse of the current investing climate. Businesses and institutions turn to investment banks for advice on how best to plan their development. Investment bankers, using their expertise, tailor their recommendations to the present state of economic affairs.
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors. Companies must meet requirements set by exchanges and the SEC to hold an IPO. Companies hire investment banks to underwrite their IPOs. The underwriters are involved in every aspect of the IPO due diligence, document preparation, filing, marketing, and issuance.
The names of investment banks like Goldman Sachs and Morgan Stanley come up frequently in discussions about the financial market, highlighting the importance of these institutions in the financial world.
In general, investment banks assist clients with large and complex financial transactions. This includes underwriting new debt and equity securities, aiding in the sale of securities, and helping to facilitate mergers and acquisitions, reorganizations, and broker trades. Investment banks may help other organizations raise capital by underwriting initial public offerings (IPOs) and creating the documentation required for a company to go public.
Federal Reserve History. " Banking Act of 1933 (Glass-Steagall Act) ."
Federal Trade Commission. " Gramm-Leach-Bliley Act ."
Written by: Olujinmi Oluwatoni
Having a exceptional product or idea is great. But it’s not enough to scale growth.
Research by Skynova revealed that about 47% of startups fail due to a lack of investors and financing, while 44% decline when they run out of cash. When these founders were asked what they would do differently, 43% said they would seek more investors to stay afloat.
Whether you run a startup or lead a large corporation, knowing how to craft a convincing investment proposal can boost your chances of getting funding or scaling up.
A well-crafted investment proposal demonstrates the viability of the investment and builds confidence, thereby increasing the likelihood of securing funding.
Not sure how to write a good investment proposal?
In this article, we will show you how to write a proposal that will help you secure funding. We’ve included 10 professionally designed investment proposal templates for you to customize and send right away.
Are you ready to scale up?
Let’s begin!
What is an investment proposal, business plan vs investment proposal, what should an investment proposal include.
An investment proposal is a document that showcases your business as a suitable opportunity for potential investors who have shown interest in your company. This document details crucial information such as your company’s objectives, market analysis , plan of action, budget and a clear return on investment (ROI) strategy.
Whether you’re trying to raise capital or fund an expansion, a detailed investment proposal is also a great tool for pitching to an investor and winning over. It convinces an investor that your business is viable and worth investing in.
After an investor pitch deck presentation, you can share an investment proposal with your client. It acts as a reminder and brings some of the information they might have missed during the session to their attention.
While a business plan and an investment proposal may share certain components, their core differences lie in their purpose and audience.
A business plan is a detailed documentation of your business idea, target market, financial projections and growth strategy. Its purpose is to clarify your ideas and flesh out your concept. You can use your business plan to gain partners or seek a license.
Your investment proposal, however, aims to secure funding from potential investors. Every section here is written to convince them why investing in your company will be a good decision.
This infographic below summarizes the differences between a business plan and an investment proposal.
Made with Visme Infographic Maker
Your investment proposal should include the following key components:
Your cover page should carry a clear title describing what your proposal entails. For example, “Digital Bank Investment Proposal.” You can also include your name and the receiver’s name as well.
The table of contents helps your investor scan your document before reading it. Ensure you label and include the important sections of your investment proposal in the table of contents.
Your executive summary should briefly highlight your business. It should give an overview of the solution your business offers to the market and your achievements thus far. You can also include your mission and vision statement to give your reader more insight into your company.
The market analysis section should include a bird’s eye view of your target market, market value or market share and market trends.
This section should demonstrate an in-depth understanding of your market or audience. It should show your reader that you have done extensive research and have real data to back up your funding request. You should also showcase that you’ve conducted your competitive analysis and understand their strengths and weaknesses.
Your business model should include details about the products or services offered, target customers, pricing strategy, distribution channels and cost structure. It should showcase how your company will operate, make money, and stay competitive and sustainable in the market.
Here, you should highlight the problem that your market is facing and how you plan to solve it. Discuss the solution you are introducing and your strategy to execute it. This section doesn't have to be so thorough, but it should give your reader an understanding of your plan or process for execution.
In this section, you should break down how your business generates revenue or your plan for customer acquisition. Highlight your revenue model, whether it is a sales, subscription, freemium, transaction fee revenue model, or any other model.
You want to show your potential investor that you have a proven framework for profitability. Also, be transparent about how you will utilize the investment, as this will boost trust in your company.
In addition to your business's profitability, your potential investor will care about other things that can influence your company’s success. One of which is your team’s expertise and ability to carry out your plans and goals.
Depending on the theme of your proposal, you can showcase your management’s experience and the team behind the venture.
Great investors always look out for the safety of their principal or reasonable returns.
Knowing this, you can spotlight a return on investment or exit strategy, which could be an initial public offering (IPO), acquisition, merger, liquidation or shutdown. Also, highlight the various ways investors can receive a return on their investments.
Once you have all the important details in your investment proposal, close with a clear call to action (CTA). Your potential investor should know what to do or how to reach you to finalize the deal or set up a meeting for more details.
Here’s a step-by-step guide to writing your investment proposal:
Before you begin writing your investment proposal, you need to have proper and relevant information at hand. Some key areas of research you will carry out include:
1. The investor you're writing to. For example, when researching an investor, you want to find out;
2. Market research and opportunity: You should conduct a thorough research on the following;
3. Budget and financial projections: You should consider the following key areas;
4. Marketing plan and strategies and lots more.
You must spend time on this step to get accurate data or estimations. Presenting accurate information can make a good impression and also accelerate your writing process.
After your research, bring together all the information you've gathered and organize them into an outline. An outline will guide you as you write and ensure you don't forget any important aspect or detail.
Look through the section above on what your investment proposal should include and note the parts you want to add to yours.
Writing a comprehensive investment proposal from scratch can be overwhelming. A premade template can help you save time and energy. And Visme has a vast library of professional templates you can tap into.
Just select one that matches your outline and vision. Then add and remove pages or swap any information you wish. All of Visme's templates are professionally designed and customizable, giving you a creative head start and making the entire process stress-free.
Hear what one of our users has to say about our templates:
Web Designer & Digital Marketing Specialist
Now that you've chosen your template, it's time to fill in the sections with the information you've gathered from your research.
The executive summary of your investment proposal should be concise and informative. It should include a brief overview of the project, the problem it addresses, the proposed solution, market analysis, financial projections, and potential returns for investors.
Keep it focused. Highlighting the key points that would interest potential investors and provide a compelling case for why the investment offer is worthwhile.
You don't have to settle with the template's fonts or colors if you don't like them. You can personalize your investor proposal template to suit your brand.
Using Visme's brand design tool , all you need to do is upload your company's brand assets and apply them to all the documents you create.
If you don't have a branding kit for your business yet, click on "My Brand" left panel and set it up in just a few minutes. You can then apply your branding to the whole document with just one click.
If you have more than one potential investor, you may want to consider customizing your investment proposal for each of them.
Ensure you personalize their contact address or company name before you share it with them.
To make this easier, use Visme's dynamic field tool to update key details across your documents in one click. With this tool, you don't have to worry about going page by page to make important changes to your document.
Before sending your investment proposal to your potential investor, review each section to ensure they include relevant details about your company and funding requests.
Provide a clear CTA so investors know the next step to take. Do you want them to schedule another call to talk? Or do you want them to go ahead and request an investment term sheet if they're interested?
Whatever the case, ensure it's feasible and easy to respond to.
You've done all the tough work. Now it's time to send out your investment proposal and expect great feedback.
Visme allows you to publish and share your investment proposal in different ways. You can download it as a presentation, a PDF document, or an embed link.
You can also share a private link with your potential investor to view it or publish it and share it with a group of people at once.
If you're pressed for time to create an investment proposal or any other document, Visme's AI document generator has you covered. Simply give it a text prompt, and it will craft a suitable draft with text, images and icons in a style that suits you.
Then, you can tailor every aspect of the document to your needs to create eye-catching professional documents in no time.
Here are 10 amazing templates you can customize right now!
Use this template to attract interested and enthusiastic investors to your real estate properties.
Research forecast shows that by 2030, the global real estate market will grow to over $6.13 trillion at a compound annual growth rate (CAGR) of 5.2%. As the demand for real estate increases, you need to position your company as a trusted business to invest in.
This investment proposal template highlights your company’s achievements through the About Us section, portfolio and testimonials from happy customers. Investors are always on the lookout for credible businesses, so these sections prove your authority in the industry and showcase your results thus far.
One thing that sets this template apart is how it utilizes Visme’s vast library of high-quality stock photos to add to the essence of your company’s brand and goals.
You can also tap into the infinite possibilities of Visme’s AI image generator . Simply type in your prompts and generate professional-quality photos and graphics for your proposal in minutes. The Visme AI image editor also comes in handy for polishing your images and giving them a professional look.
This business investment proposal template empowers entrepreneurs, startups and businesses to present their vision with precision and impact. From the dynamic executive summary to the detailed financial projections, every section of this business investment plan is strategically designed to showcase your potential.
The ultimate goal of a successful investor proposal is to present information in a digestible way without boring your audience. Utilize Visme's charts, graphs and maps to effectively present data such as market analyses, financial projections and more. If you need to streamline your design process even more, you can easily import your data from Google Sheets.
This carefully created template will walk you through each step of creating a powerful partnership proposition.
Prove that you've done your homework by outlining your competitive advantages and explaining how your business model will help stakeholders get their returns on investment.
To get feedback about your proposal from coworkers quickly, you can invite them to your Visme project using Visme’s collaborative features . This way, you can control their access and let them view, modify and comment on it.
This template is tailor-made for real estate enthusiasts, investors and developers seeking to unlock the potential of prime locations. Whether you're aiming to attract capital for a luxury residential project or a commercial venture, you can make your case with this template.
This investment proposal format will help you showcase your market analysis, projected returns, strategic vision and how the project will deliver impressive returns on investment.
Whether you're seeking seed funding, angel investment, or venture capital, the sections provided help you convey the potential and uniqueness of your solution.
From the captivating introduction that captures your startup's mission and vision to the detailed market analysis, this startup investment proposal template equips you to make a persuasive case.
You can also highlight your competitive advantage, business model, financial projections and team expertise. This will provide investors with a clear understanding of the growth trajectory your startup envisions.
Take advantage of the animation and interactivity tools available in Visme, such as clickable menus to reveal larger data sets or hover effects to reveal additional information. This will allow you to create an immersive experience for your audience and also improve the value of your proposal.
Whether you're seeking funding for an infrastructure project, a community initiative, or a technological innovation, this template guides you through each step of the process. Showcase how your project addresses challenges and meets demands, positioning it as a worthy investment opportunity.
Don’t know what to write in the different sections of your investment proposal? You can take advantage of Visme’s AI writer to generate your first draft and help you craft a compelling story.
If you're ready to entice investors with a taste of what your restaurant can achieve and secure the funding to make it a reality, leverage our investment proposal example.
Navigate through market analysis, your restaurant's competitive edge and the revenue potential that your culinary masterpiece promises. Showcase how your menu, ambiance and innovation set your establishment apart. This will help you position your restaurant as an appetizing investment opportunity.
If you want to provide a clear and convincing investment proposal to your potential investor, then this template is a goldmine!
It begins with your company’s story, vision and mission statement. This helps your reader understand the purpose of your company and what it hopes to achieve. Presenting this early on in your proposal template can help your reader relate to your story.
This investment plan template goes further to give a breakdown of your company’s target market, market share and profit and loss statement. This shows your potential investor that you have a lot of knowledge about your market. It also gives them the confidence that your company is profitable and a good investment.
The SWOT analysis is a unique angle in this investment proposal. Including this paints a more realistic picture of the internal and external factors that influence your company’s success.
This template is dedicated to app-related ventures and assists you in presenting your app's potential to investors. It takes you from a compelling introduction about your app's purpose and user benefits to a thorough market analysis. Also, it allows you to highlight investor benefits and exit strategies.
You can convincingly express your app's promising future by showcasing your competitive advantage, revenue projections and risk assessment.
Visme offers advanced collaboration features , such as live editing, commenting, annotating and version control, to make the collaboration process as smooth as possible.
Invite other team members to join you in creating an investment proposal by emailing or sharing a link to collaborate with them on the project.
In addition, Visme also provides workflow management features that allow you to manage roles, tasks, progress, and corrections all in one place.
The basic investment proposal template takes you on a cohesive journey through your proposal. Starting with an impactful executive summary, it smoothly transitions into a detailed market analysis, all wrapped in bold black, white and neon colors for a memorable impression.
Powerful data visualizations such as vertical bar graphs, line charts, and pie charts aid in simplifying complex market data.
With sections for financial projections and thorough SWOT analysis, it tells the full story of your proposal in an engaging and visually impressive manner.
Once your investment proposal gets accepted, you might be asked to present an in-depth presentation to potential investors. Check out the stock pitch templates from Visme's library to create a presentation to wow the investors and secure the deal.
Q. what to avoid when writing an investment proposal.
Here are some things to avoid when writing your investment proposal:
A good investment proposal incorporates storytelling and establishes clear expectations, leaving no room for ambiguity. Data-driven projections and realistic timelines result in great investment proposals.
Your document should address the questions and concerns of any potential investor and position your company as an asset. Before you send your investment proposal to a potential investor, we suggest giving it to a colleague or partner to read and review.
You know you have a good investment proposal when their feedback includes words like credible, realistic, detailed, engaging, persuasive, or solid.
When you want to propose your business idea or concept to an investor, keep in mind a few things:
Nothing beats prior preparation. Understanding the interests of an investor can help you find a good way to approach them and pitch your idea.
Prioritize a warm approach with a well-crafted pitch that communicates your business’ value and potential. Having a pitch deck on hand that details your company’s products or services might be a good idea.
Be passionate about your business, yet concise. Investors feed off your energy and are intrigued by well-informed founders.
Lastly, aim to build relationships and rapport with a potential investor. Encourage a relaxed conversation and always be ready to answer their questions in more detail.
Your investment proposal should begin with an executive summary or introduction that highlights what your company does, its mission and values and solution offerings.
You can incorporate your company’s story or a quick glance at your journey. Make sure you begin on a strong note. Resonate with your potential investors and engage them from the beginning.
When you submit your investment proposal to a potential investor, they will go through the complete document to get an overview of your business offering and funding expectations.
However, there may be sections that deserve closer attention than others. While Investors vary in their approach, most take a deep dive into your market opportunity, your revenue model, final projections and allocation of funds and an exit strategy.
Also, potential investors want to see if you’ve done proper research and can present it well.
They also look to see if you have what it takes to carry out the plans you’ve highlighted in your proposal.
Your process from research to completion may vary depending on the availability of relevant data or investor-specific demands. It may take days or weeks to present a foolproof business proposal for investors.
However, this time can be reduced when you utilize proposal templates. These templates provide a clear structure, improve your efficiency and give you more time to personalize and perfect your investment proposal for each investor.
A business plan is a comprehensive document that outlines a company's objectives and the strategies that will be used to accomplish them. It's a helpful guide for both people working within the company and those looking from the outside.
In comparison, an investment proposal is specifically created for potential investors. It's a document that shares important details about a business's request for funding, making it easier for investors to decide whether they want to invest.
To sum up, a business plan covers the broader scope of a company's objectives and goals, while an investment proposal is tailored to attract investors to fund the business.
There's no strict page limit for an investment proposal. However, since investors are busy people, you should aim for brevity. A good rule of thumb is to aim for 10 to 15 pages. This allows you to provide enough detail of the investment opportunity without overwhelming the reader with unnecessary information.
When you write an investment proposal, make sure you focus on quality content and relevant data, not just the number of pages.
A business proposal is a document that pitches a product or service to a potential client, while an investment proposal outlines an investment opportunity for investors.
The goal of a business proposal is to win over the client by emphasizing how valuable and beneficial our product or service is. In comparison, an investment proposal aims to attract funding by showing investors the financial potential and expected returns of a business or project.
Knowing the capital or funding your company needs to expand is one thing. Being able to communicate this effectively to a potential investor is another.
With this guide, we’re confident in your ability to produce a well-rounded investment proposal that guarantees funding from potential investors.
Visme's capabilities and user-friendly interface make it ideal for developing excellent investment proposals whether you’re a professional designer or not. Your presentation will come to life with the help of millions of available graphics, icons, design elements and professional templates.
Beyond creating investment proposals, Visme allows you to create other assets, such as investor pitch decks, videos, sales enablement content and marketing assets.
If you’re ready to impress your investors, attract funding and scale growth, sign up with Visme today !
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Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.
If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.
Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.
You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.
Let’s get started.
Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.
One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.
For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.
A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.
Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.
A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:
A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.
You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.
A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.
Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.
You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.
You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.
Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.
In your business plan, your marketing strategy must answer the questions:
1. create your executive summary.
The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.
A good executive summary should do the following:
The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.
Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.
View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:
Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.
The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.
If you are writing your business plan for your planning purposes, you do not need to write the executive summary.
The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.
Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.
Your company overview should contain the following:
When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.
If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.
After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.
The company description or overview section contains three elements: mission statement, history, and objectives.
The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.
Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”
When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:
When you fill in this information, you use it to write one or two paragraphs about your company’s history.
Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.
The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.
Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.
This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.
Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?
You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.
Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?
Illustrate the competitive landscape as well. What are your competitors doing well and not so well?
Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.
Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.
Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.
The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.
A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.
To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.
The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.
Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.
You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.
How to Quantify Your Target Market
One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:
What Does a Good Market Analysis Entail?
Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.
You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:
The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.
Here are some questions you can answer that can help you position your product or service in a positive light to your readers.
Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.
In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.
Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.
Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.
The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.
Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.
When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.
Find answers to the following questions after you have identified who your competitors are.
If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.
If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.
Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.
The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.
Direct vs Indirect Competition
You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.
There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.
If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.
In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.
For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.
There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.
Factors that Differentiate Your Business from the Competition
There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.
1. Cost Leadership
A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.
A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.
2. Product Differentiation
Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.
Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.
3. Market Segmentation
As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.
If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.
The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.
Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.
If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.
Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.
The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.
Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.
The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.
Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.
A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.
Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.
Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.
If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.
1. Avoid Adding ‘Ghost’ Names to Your Management Team
There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.
Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.
2. Focus on Credentials But Pay Extra Attention to the Roles
Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.
While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.
Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.
If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.
An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.
You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.
In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.
Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.
The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.
If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”
Your product and service section in your business plan should include the following:
In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.
When describing the benefits of your products or services, here are some key factors to focus on.
When describing the product life cycle of your products or services, here are some key factors to focus on.
When describing the production process for your products or services, you need to think about the following:
1. Avoid Technical Descriptions and Industry Buzzwords
The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.
A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.
2. Describe How Your Products or Services Differ from Your Competitors
When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.
If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.
For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.
3. Long or Short Products or Services Section
Should your products or services section be short? Does the long products or services section attract more investors?
There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.
If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.
Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.
The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.
If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.
A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.
4. Describe Your Relationships with Vendors or Suppliers
Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.
Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.
5. Your Primary Goal Is to Convince Your Readers
The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.
When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.
While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.
Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.
Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.
You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.
Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.
The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.
There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.
In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.
The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).
Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.
Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.
Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.
Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.
Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.
Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.
Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?
Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market
After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.
All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.
Here is a simple template you can use to develop a positioning statement.
For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].
For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.
“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”
You can edit this positioning statement sample and fill it with your business details.
After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.
Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.
You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.
Basic Rules to Follow When Pricing Your Offering
Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.
Pricing Strategy
Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.
After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.
As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.
There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.
Advertising
Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.
Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.
Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.
A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.
Public Relations
A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.
Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.
Content Marketing
Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,
Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.
Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.
If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.
Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.
When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.
Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.
You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.
Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.
Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.
You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.
If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.
Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.
The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.
Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.
1. Focus on Your Target Market
Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.
2. Evaluate Your Competition
One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.
You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.
These questions can help you know your competition.
3. Consider Your Brand
Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.
4. Focus on Benefits
The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.
Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.
5. Focus on Differentiation
Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.
You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.
The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.
If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’
A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.
Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.
In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.
Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.
If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.
When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.
Case for Equity
If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.
Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.
Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.
Case for Debt
You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.
When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.
Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.
Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.
You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.
The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.
If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.
You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.
If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .
Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.
If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.
The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.
If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.
Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.
If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.
When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.
The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.
Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.
Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.
The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.
Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.
Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.
You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.
The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.
A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.
Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.
1. Sales Forecast
Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.
One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.
For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.
Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.
Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.
For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.
2. Personnel Plan
The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.
However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.
The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.
3. Income Statement
The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.
Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.
The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.
4. Cash Flow Statement
The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.
5. Balance Sheet
The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.
You can get the net worth of your company by subtracting your company’s liabilities from its assets.
6. Exit Strategy
The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.
You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.
Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.
Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.
Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.
You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.
Here are some key questions to answer to help you develop this section.
Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.
The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.
When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.
Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.
You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.
If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.
A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.
The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.
People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.
The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:
Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.
To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.
When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.
The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.
Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.
Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.
To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.
When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.
Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.
The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.
In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.
The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.
To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.
When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.
One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.
Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.
You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.
To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.
A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.
For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.
To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.
This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:
Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.
When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.
You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.
In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.
Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.
1. hubspot's one-page business plan.
The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.
Hubspot’s one-page business plan template is divided into nine fields:
Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.
The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.
HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.
The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.
There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.
My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.
The comprehensive template consists of a whopping 15 sections.
There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.
Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.
The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.
There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.
The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.
The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .
There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.
The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.
There are five sections in the two SBA’s free business plan templates.
The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.
There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.
The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.
There are 11 sections in PandaDoc’s free business plan template.
You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)
PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.
InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.
Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.
A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.
Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.
The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.
The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.
The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.
The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.
Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:
While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.
Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.
Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.
Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.
Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.
It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.
Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.
Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time. They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.
Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans. A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.
A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs. Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.
The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.
A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.
Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.
Martin luenendonk.
Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.
This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.
Why A Thoughtful Business Plan Is Essential For Success
Starting a business is an exciting journey, full of opportunities and challenges. For women entrepreneurs, particularly those transitioning from corporate life to entrepreneurship, the path can feel daunting. But with the right roadmap (a well-thought-out business plan), you can navigate the uncertainties and set your business up for success.
A business plan is more than just a document; it's your blueprint for building and growing your business. It outlines your goals, strategies, and the steps you need to take to achieve them. A strong business plan not only guides your decisions but also communicates your vision to potential investors, partners, and employees.
Here’s why a business plan is crucial and how you can create one that will steer your business toward success.
1. clarifies your vision and objectives.
As you build out your business plan it forces you to think deeply about your business idea and if it’s a viable idea. What exactly are you trying to achieve? What are your short-term and long-term goals? By putting these thoughts on paper, you create a clear vision that will guide every decision you make.
Researching and writing a business plan requires you to analyze your market. Who are your competitors? Who is your target audience? What are the market trends? This understanding helps you position your business strategically and identify opportunities for growth.
Viral ‘chase bank glitch’ isn’t the hack people thought it was, directv blacks out espn, abc, and other disney channels, 3. defines your strategy.
A business plan includes your marketing strategy, sales approach, and operational plan and outlines how you will achieve objectives. This strategic framework ensures that your efforts are aligned and focused on achieving your goals.
If you need financial support to start or grow your business, a well-prepared business plan is essential. Investors and lenders want to see a clear plan for how you will generate revenue and repay any loans. A business plan that demonstrates a thorough understanding of your industry and a solid strategy is more likely to attract funding.
A business plan serves as a reference point, helping you make informed decisions that align with your long-term goals. By consistently referring to your business plan, you ensure that every decision contributes to the overarching vision and objectives of your business, ultimately driving growth and success.
A business plan includes milestones and key performance indicators (KPIs) that allow you to track your progress. Regularly reviewing your business plan helps you stay on course, adjust your strategies as needed, and celebrate your successes.
The bottom line is that creating a business plan is a crucial step in turning your entrepreneurial dreams into reality. It’s your roadmap, guiding you through the complexities of starting and growing a business. For women entrepreneurs, especially those transitioning from a corporate career, a well-thought-out business plan can provide the clarity, confidence, and direction needed to succeed. Take the time to craft a business plan that reflects your vision and sets the foundation for a thriving, profitable business.
Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and also guides established business owners to grow their businesses to more profitably.
The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.
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Written by Dave Lavinsky
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their banks.
If you’re unfamiliar with creating a bank business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bank business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
A business plan provides a snapshot of your bank as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
If you’re looking to start a bank or grow your existing bank, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bank to improve your chances of success. Your bank business plan is a living document that should be updated annually as your company grows and changes.
With regards to funding, the main sources of funding for a bank are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for banks.
How to write a business plan for a bank.
If you want to start a bank or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your bank business plan.
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bank you are running and the status. For example, are you a startup, do you have a bank that you would like to grow, or are you operating a chain of banks?
Next, provide an overview of each of the subsequent sections of your plan.
In your company overview, you will detail the type of bank you are operating.
For example, you might specialize in one of the following types of banks:
In addition to explaining the type of bank you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
In your industry or market analysis, you need to provide an overview of the bank industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the bank industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your bank business plan:
The customer analysis section of your bank business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, small businesses, families, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of bank you operate. Clearly, corporations would respond to different marketing promotions than individuals, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other banks.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes trust accounts, investment companies, or the stock market. You need to mention such competition as well.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type of bank company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide savings accounts, auto loans, mortgage loans, or financial advice?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your bank. Document where your company is situated and mention how the site will impact your success. For example, is your bank located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your bank marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your bank, including reconciling accounts, customer service, accounting, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign up your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your bank to a new city.
To demonstrate your bank’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing banks. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bank or successfully running a small financial advisory firm.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer sign up bonuses? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bank, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bank:
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your bank location lease or a list of accounts and loans you plan to offer.
Writing a business plan for your bank is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bank industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bank.
Don’t you wish there was a faster, easier way to finish your Bank business plan?
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success. Click here to see how a Growthink business plan consultant can create your business plan for you.
Thursday, 29 Aug 2024
Fbm klci falls slightly amid profit-taking, broader market holds up, asian markets diverge as china woes offset us rate hopes.
In a filing today, the exchange said the suspension was triggered after the investment bank's share price fell by more than 15 per cent, or 15 sen, from the reference price.
It said the short-selling for Kenanga Investment Bank under IDSS will resume on Friday, Aug 30, at 8.30 am.
As of 2.30 pm, Kenanga Investment Bank’s shares had fallen 15.25 per cent to RM1.00 from the previous day’s close of RM1.18, with 1.25 million shares changing hands. - Bernama
Tags / Keywords: Bursa Malaysia , IDSS , Kenanga Investment , suspension , short selling
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Learn the key components of a winning investment bank business plan, from executive summary to financial projections. Download a template to create your own plan and get funding or improve your strategy.
To start your own investment bank, you need to follow these steps: (120 words) First, obtain the necessary licenses and certifications from regulatory authorities in your jurisdiction. This is crucial for legal compliance and gaining the trust of potential clients. Next, develop a comprehensive business plan that outlines your target market ...
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This article demystifies the process of launching an investment bank business, offering a detailed 9-step checklist tailored to help entrepreneurs navigate the challenges and capitalize on opportunities within the thriving U.S. financial landscape. Analyze market. Plan business.
This sample plan was created for a hypothetical investment company that buys other companies as investments. In this sample, the hypothetical Venture Capital firm starts with $20 million as an initial investment fund. In its early months of existence, it invests $5 million each in four companies. It receives a management fee of two percent (2% ...
2. Develop A Business Plan. Developing a solid business plan is crucial for any entrepreneur looking to start an investment bank business.It outlines the direction for the company, identifies potential challenges and opportunities, and helps to secure financing from investors and financial institutions.
Investment Company Business Plan. Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their investment companies. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an investment ...
Writing an investment company business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan: 1. Executive Summary. An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ...
The investment banking industry has been experiencing steady growth over the past few years. According to market research, the global investment banking market size was valued at $78.3 billion in 2020 and is projected to reach $108 billion by 2027.This indicates a compound annual growth rate (CAGR) of 4.6% from 2021 to 2027. The growing demand for financial services and the rise of corporate ...
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Growthink Capital, our wholly owned FINRA / SIPC broker-dealer investment bank - raises capital and executes upon business sale, merger, and acquisition transactions for emerging and middle market companies. ... Their team was very responsive and helped us with a business plan that expedited our quest for additional growth capital.
The Investment Banker Business Plan Template offers numerous benefits, including: Providing a comprehensive roadmap for your business model and strategies. Helping to showcase financial projections and potential returns to investors. Streamlining the market analysis process and identifying key opportunities. Ensuring a professional presentation ...
The Investment Bank Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an Investment Bank business. All business planning packages come with easy-to-use ...
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Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of debt or equity securities.
Earn a Bachelor's Degree. Investment bankers start by earning a bachelor's degree, usually in a field like business administration, finance or statistics. A bachelor's degree typically takes ...
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
Quick Read. An investment proposal is a written document that presents your company to interested investors as a viable investment option. Your investment proposal should include the following key components: the cover page, table of contents, executive summary or about us page, market analysis, value proposition and plan of action, budget and revenue model, team's portfolio, ROI or exit ...
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
Gorman also paved the way for growth at Morgan Stanley's wealth management business through a series of acquisitions starting five years ago: the 2019 purchase of Solium Capital, a stock plan ...
4. Secures Funding. If you need financial support to start or grow your business, a well-prepared business plan is essential. Investors and lenders want to see a clear plan for how you will ...
Marketing Plan. Traditionally, a marketing plan includes the four P's: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following: Product: In the product section, you should reiterate the type of bank company that you documented in your company overview.
PETALING JAYA: 3REN Bhd has inked an underwriting agreement with KAF Investment Bank Bhd for its listing on the ACE Market of Bursa Malaysia, scheduled for the fourth quarter of this year.
"The combination is expected to create a premier full-service commercial bank serving clients from 77 full-service locations across 10 states with combined total assets of approximately $20 ...
As of 2.30 pm, Kenanga Investment Bank's shares had fallen 15.25 per cent to RM1.00 from the previous day's close of RM1.18, with 1.25 million shares changing hands. - Bernama Open Modal
Plan to hike windfall tax sparks energy jobs warning. Typical household energy bill up £149 a year in October. ... or setting out a business tax roadmap to attract investment.
TORONTO - Scotiabank says it has completed the first step in its investment in KeyCorp with the acquisition of a 4.9 per cent stake in the U.S. bank. The Canadian bank says it paid US$17.17 per ...