Business Plan Templates
The business plan, model, or concept forms the bedrock upon which all else is built. If the plan, model, or concept is poor, there is little hope for the busi ness. In order to execute a business plan, a company requires top-quality management. Investors might look at management to assess its capabilities, strengths, and weaknesses. Even the best-laid plans in the most dynamic industries can go awry with poor management. Alternatively, strong management sometimes creates extraordinary success in a mature industry.
Later, after you gain experience and credibility, you will be able to raise money based on your reputation and achievements. When you're just getting started, though, I recommend that you write out a business plan for two reasons Partners can provide the money. You provide the talent, time, and business plan. 2. Credibility. Which of these approaches would most persuade you to invest in a property Someone simply asks, Hey, how would you like to invest 20,000 in a real estate deal I'm putting together Or she says, Here's a copy of my business plan for a real estate investment that I'm acquiring. As you can see from this market and financial analysis, a 20,000 investment will pay you back 30,000 within six months.
This question-and-answer format is designed to guide you in the development of your business plan. The probing questions will assist you in collecting the information you will need to make informed business planning decisions. This is a comprehensive workbook and, as such, explores all aspects of different types of businesses. Answer the questions appropriate to your company or venture. As you proceed, the questions will stimulate your thinking about your business, providing you with new insights into the planning process. Remember that the business plan is not only a compilation of answers to a series of questions but a written reflection on the conclusions that you draw from going through the questioning, research, analysis, and answering process.
On Day 26, start to write a very simple business plan that's one to four pages long. You can use that business plan to show potential money partners the activities you'll be doing. Assure them that they'll have a first mortgage on the properties, secured by the properties themselves, and that you'll only be buying deals that are 20 percent to 30 percent below market. That investor would be fairly safe if you're following the systems laid out here, as well as running comparable sales and getting market verifications.
The informal, more practical, realistic definition of the private placement is any deal that the entrepreneur can legally negotiate and an attorney can write up. In essence, the private placement in angel transactions becomes a written record of the agreement and deal struck between the entrepreneur and the angel investor, which is precisely why we do not advocate indulging prematurely in overly structured transactions. Peddling highly structured transactions in the current angel market precludes the angel's propensity to negotiate. More constructive for the entrepreneur is an open-minded, negotiation-oriented approach. This more flexible posture, when supported by a strong business plan, is the constructive strategy to open the negotiation
Many multinational companies are seeking to sell their products in China because it is emerging as a more mature market. Central to the process has been the continued rapid growth of the economy. According to a survey by KPMG in 2004, 43 percent of multinationals reported that their operations in China either outperformed or met their original business plans.1 Foreign companies have realized that they do not need one billion customers to justify their presence. Low per capita income does not prevent China from becoming a major global market for many types of goods and services. The emergence of consumer markets is the result of the widening income inequality. The poverty in the rural areas is a serious social problem facing the government. But in urban areas, the faster increase in incomes has generated a middle class that has the financial means to buy the more expensive products that foreign firms want to sell.
Since the explosion of active trading by the general public, numerous brokerages have developed their business plans to tailor to these individuals. Web-based and traditional brokerages such as E*TRADE and Schwab & Company do offer interesting advantages for the trader. The major advantage is to the newer trader because the trader does not have to learn a wide assortment of execution routes required by Electronic Direct Access Trading Firms (EDATs). He or she simply has to put an order in, including the ticker and number of shares, and the order routing method is chosen for him or her.
Trepreneur's ear to the vibrations of the marketplace. What out there might affect the company Sometimes entrepreneurs get so close to their own technology, so close to the features of their own deal, so close to developing the business plan, to putting the management team together, to raising the money, that they overlook the pulse of the market. Entrepreneurs must not ignore market information. They do so at their own peril. Entrepreneurs can ill afford a business plan that lacks a sense of the market within the past 6 to 12 months a time period after which market circumstances practically guarantee a shift in technology.
Just remember, making money in the futures market won't happen overnight. You will have to apply yourself, study the markets and charts, make a game plan and follow your plan consistently. You will also have to be conservative. It's a lot like a conventional retail business, where you learn all about the business, study the ins and outs and seasons, formulate a business plan, and open up for business. Once you start trading you should keep good accounting records so you can track your expenses, profits and losses. Tracking your trades can be done through accounting software, such as Quicken or a simple Excel spread sheet, this is important because you should be able to compare your records to your brokers statements It also helps you to calculate your overall returns. Try not to get greedy. Greedy people often lose out and don't profit at all.
L efore we get into the actual mechanics of finding deals, analyzing them, and making money off of them, let us talk about you. Every one of you is absolutely different. You have different skills, different assets, different worries, and different goals. You need to decide what you really want to do, how much you really want to make, what you are good at, what you are not good at, what you are scared of, what you are not scared of, and what you feel comfortable with, then start developing a business plan. Whether you are going to own 1 piece of property or 1,000, you are going to have a business. Every business needs a plan. Every business needs goals. Every business needs to decide who its key people are.
You work in a venture capital firm and are in charge of the selection of strategic business plans and performing financial analysis on their respective feasibility and operational viability. The firm gets more than a thousand business plans a year, and your boss does not have the time to go through each of them in detail and relies on you to sniff out the ones with the maximum potential in the least amount of time. Besides, the winning plans do not wait for money. They often have money chasing after them. Having been in the field of venture capital funding for 10 years and having survived the bursting of the dot-com bubble, your judgment is highly valued in the firm, and you are more often than not comfortable with the decisions made. However, with the changing economic and competitive landscape, even seemingly bad ideas may turn into the next IPO success story. Given the opportunity of significant investment returns, the money lost on bad ideas is a necessary evil in not losing out...
In contrast, one can look at the start-up entrepreneur. How do you obtain venture funding, and how do you position the firm such that it is more attractive to the potential investor Your core competency is in developing software or Web-enabled vehicles on the Internet, not financial valuation. How do you then structure the financing agreements such that your firm will be more attractive yet at the same time the agreements are not detrimental to your operations, strategic plans, or worse, your personal equity stake What are your projected revenues and costs How do you project these values when you haven't even started your business yet Are you undervaluing your firm and its potential such that an unscrupulous venture firm will capitalize on your lack of sophistication and take a larger piece of the pie for itself What are your strategic alternatives when you are up and running, and how do you know it's optimal for you to proceed with the next phase of your business plan
If you're making a loan to a business, the same questions as for individuals apply. In addition, you should first review the business plan of the particular business you're thinking of lending to so that you understand all of the following to expand, but he needed to come up with the cash so he could build out the space. Ray went to an investor, Jane, and he said to her, I need 150,000, and I'm willing to put up some collateral for the loan. The bank won't lend me any more money because I have tapped out my equity on the existing loan. I tried the SBA to see if I could get an additional loan, but they haven't gotten back to me yet. I really believe in my business plan, and I want to get started now. Ray was willing to put up some of his restaurant equipment as collateral. He calculated that he had about 200,000 worth of restaurant equipment. Jane looked at his place and said, Let me see your business plan. His business plan was solid Ray showed that if he could expand his business...
Although development of the professionally prepared business plan and presentation (see Appendix A) is important to funding, only implementation of the ideas contained in the plan bear value. We emphasize the importance of the Investment Opportunity Profile over the business plan as a marketing tool during the initial stages of investor development and as a way to inspire, as well as assess, investors' interest in the venture. And while we affirm that investors invest in people, not documents, this does not render business plans and summaries unimportant. In the beginning, you want to focus on management, but eventually you will need documentation to enunciate your vision. Documents may not be crucial in the early going, but be assured their time will come. Never minimize their importance. Getting the most from your board means selecting individuals who add value, not merely serve in an honorary capacity. Look at the legal debacles we read about daily in the business press. An...
Entrepreneurs can expect due diligence to take two weeks to six months Due diligence is no more than the caution any prudent person would exercise with their own money. Sophisticated investors recognize that nothing takes the place of a full-venture audit, an in-depth assessment of the founder and entrepreneurs, and close scrutiny of the deal elements themselves to judge the viability of a prospective early-stage investment moreover, the investor will require numerous face-to-face meetings with the entrepreneur, thorough review of the business plan and strategy, and interviews with customers, suppliers, and competitors and he may seek counsel from relevant industry or technical experts.
Angels do not invest in business plans they invest in people. The relationship between the angel and entrepreneur is the most significant factor in moving forward the sale of the illiquid investment security. When the chemistry between dreamer and dream-maker merge, other factors, such as business plans and private placement memoranda with risk-disclosure statements, become secondary. The relationship is everything. Astute entrepreneurs will appreciate that people are motivated to acquire relationships that improve their self-image. Investors have different motivations for investing, just as they have different motivations for declining the opportunity. Still, people invest in people. This seems to be the sense of it I'm investing in you. If the association uplifts me, you have a better chance of gaining my contribution to the venture. By the same token, a transaction they think will lower their self-perception will keep them on the sidelines.
The entrepreneur can increase efficiency in finding investors by lining up a commitment from them before spending time and money on preparing documents. Private placement investments involve two types of documents (1) the business plan and (2) the private placement investment memorandum or risk disclosure document. Basically, the business plan proposes reasons for investing, while the risk disclosure document suggests reasons against investing. Ironically, many entrepreneurs incur 10,000 to 25,000 in legal fees to prepare a risk disclosure document even before building interest in the venture which presents investors with reasons why they should not invest. Before the dot-com bubble, a significant percentage of investors were willing to invest without a complete business plan that is not the case today. In its newest study of 1,300 investors in its proprietary investor database, 95 percent of those who responded required a full business plan and financials for review before seriously...
Risk is present in any and or all investments. Most certainly, any real estate deal can fail to achieve its projected end result. This does not mean that the transaction fails completely or at all. Failure to achieve goals can mean the goals were overly optimistic. Falling short on a timetable can be a fault of the business plan, and not the goal. Most real estate investments are inherently risky because of the investor's inability to properly assess the needs of the investment. Management of the investment is one of the major factors that can determine if the investment will be a success or not. The lack of good management skills often appears when an investor acquires a property and is thrown into on-the-job-training.
Value and Risk in Leverage The Bottom Line Can Be the Most Important Criteria to Determine Both Value and Risk
While the amount of cash flow is not always the most important economic criteria for an investor, it is generally the safest guide to market value for income- producing properties. Some investors want fast debt reduction and sacrifice cash flow for some other benefit because it fits their business plan. Low or even zero cash flow would be the case of an investment in vacant non-income producing or low-income property. Because there is little or no income to be leveraged into a higher yield, the relative yield must be based on the potential increase in value when the property is either sold or developed. In the meantime, debt and holding costs must be met by reaching into your own pocket. If the property were to be developed within a year or so, short-term financing costs may be absorbed into the transaction even though it might have an excessive constant rate in comparison to the actual market conditions of financing.
With the violation method you have a choice as to whether or not you would sell the entire position at the time of the violation, a violation being two reversal bars or the making of a higher high in a down move or a lower low in an up move. If you choose not to liquidate the entire position, you can scale out by exiting part of the position whenever you see the first violation, staying in part of the position until you see a second violation, and holding part of the position until you see anything that would cause you to take your money and run. It is entirely subjective as to what would cause you to do that. Depending on your strategy and business plan, you can decide which method is best for you and your trading.
The limited partnership structure of most hedge funds provides investment flexibility, but also poses significant challenges to the due diligence process. It is crucial for family office professionals to develop the unique tools necessary for evaluating funds based on their investment strategies, personnel, and general business plans. If the family office chooses not to develop this expertise in-house, engaging an alternative investment professional should be considered the price of entry to these investments.
In the business world, seed capital investors absolutely require clearly defined business goals prior to contributing capital. During the design stage, goals can drift and scope can creep if not bounded by written and well-understood documentation. In the trading world, this is often not the case when evaluating new, proprietary ideas. Often, simple Excel models are used to prove strategies without ever writing a business plan. While
Venture capital investing is in some ways the riskiest and most unpleasant way to lose money. The business plan usually describes a unique entrepreneurial enterprise. It seems like a good idea and a good business on the face of it. The entrepreneurs will often have gold-bordered brochures to support their very logical plan. They will list very smart investors who are backing it. They may invite you to meetings if they are local. They also usually have a very affable, smart man or woman who somehow becomes your personal confidant, an executive of the firm who gives you the inside scoop about what's going on and fills you in confidentially on whom they are talking to Coca-Cola, Merck, Yahoo , General Electric. This person craftily merges the business and its very logical plan with you and your money.
When Bill buys a stock he usually owns it for a long time. The fund's turnover rate is only 25 percent, or holding the average stock for four years, compared to 80 percent, or just over one year, for the average large-cap core fund. Bill will tell you that he hopes to own a stock forever but as a pragmatist he quickly adds that he will hold a company for only as long as he and his staff remain confident in the underlying value and management's ability to execute its business plan effectively.
A good example of the typical 1990s distressed play was U.S. Gypsum Corporation (USG), which attempted to repeal a takeover attempt through a leveraged recapitalization. USG's investment adviser for the leveraged recapitalization worked on the assumptions of a sound business plan, strong new housing starts, and steady commodity (gypsum) prices. The economic slowdown and gypsum pricing pressure in the early 1990s sapped USG's cash flow, causing the company to miss interest payments on its debt obligations. This created valuable investment opportunities for distressed investors, who scooped up cheaply priced debt and turned a nice profit upon USG's emergence from bankruptcy. (As a side note, USG has once again filed for Chapter 11 bankruptcy protection as a result of the mounting threat of asbestos litigations).
In 2002, a period when telecom stocks hit record lows, Bill increased his exposure to the downtrodden sector, focusing primarily on an existing position, Nextel Communications.When Bill stepped up his investment in Nextel Communications, he already understood the company and its strong management team, diversified product line, and solid business plan because the fund had held the stock since 1999.As of this writing, Nextel is the fund's second largest holding.
Obviously, investors want a return on their investments, with a minimum return in today's market of 30 percent. If a venture does not show enough potential, if the margins simply are not there, the risk return ratio is not adequate to attract investors. In some instances, as we indicated earlier, people get funded, not business plans. Therefore, if chemistry or mutual respect is lacking in the management team, if credentials seem weak, if no track record exists, an investor's rejection is almost sure to follow.
Investment in China does not guarantee success, however, there is much evidence that an increased presence there will generate opportunities that may not have been originally envisaged. It is important to have a robust business plan that will stand scrutiny. Challenge statements that rules and regulations do not permit the establishment of your stated enterprise. Meet and lobby the mayor and every official in the municipality, so that everyone understands your plans and, more importantly, feels involved in your new and exciting enterprise. This should help to achieve the best terms and a condensed time frame for the establishment of your new enterprise.
As of August 1, 1997, the company had sales of about 50 million and debt of about 373 million. It was obvious that we needed to restructure. We put together a quick business plan and decided that 35 million was the most debt we could service. This meant that the banks would need to take more than a 90 percent write-off. They were shocked. The banks were facing their own liquidity problems because of the growing levels of nonperforming loans. Even though we tried to get them to help us to restructure, they were primarily focused on their own problems.
For me, the critical ticket for the laundry is the business plan. Ninety percent of the deals that I look at have business plans and, frankly, the flow, the funnel, has been real big over the years. I've gotten to the point where if I just get the executive summary I'm a happy camper. And if it's of interest, I'll talk with the company. The projected numbers that you have in your business plans definitely are important, but they're not as important to me as the assumptions that underlie them. I will spend time carefully going through those assumptions, trying to comprehend the depth of understanding and the degree to which the company has grasped all the components of its business. I have rarely found projected numbers actually occurring, so I'll spend the time on the assumptions. When I get a business plan, I'll first take a look at the executive summary. I hope it's not more than a couple of pages. Then I go right to the resumes. In other words, I like to very quickly get an idea of...
When I look at a business plan, my interest is heavily weighted toward the numbers. I look at projections going out only about three years, because after three years, I've never found a crystal ball that was clear enough to mean anything. The other thing I'd look for in a business plan is a reason to believe the numbers are good. I would expect a write-up saying it's a projection, but why should I believe this projection is solid I do not want just words I do not want just numbers. I really think you have to feel ownership of that business plan. You have to believe in it otherwise, you can't sell it. When you ask for investor capital, you're asking the investor to buy your perception or your business plan. I guess everything boils down to three important things the quality of the CEO, the feasibility of the projected balance sheet, and the reasonableness of the business plan. The rest becomes second fiddle. If you can get those three things in order, you should be able to get an...
Calling the best investment in the market has always been a nerve-wracking job. We look at determining the fair value of an asset, and the risk involved with it. Investment value discounted for risk under RAROC is examined. There is concern that the financial experts have not been more proficient than the common layperson in the selection and management of investments. This makes the due diligence procedure doubly important. We look at the cult of investment reputation. A business plan and an investment methodology along RAMP lines is proposed. We end this chapter with an overview of hedge funds.
But to me the story is much more important than numbers. The business plan is really important, but numbers usually aren't very reliable no matter how well they're done. So the concept is much more important. People may have an idea of what they want to do with product One other thing that's important to me in concept is accessible geography. On a business plan, I think it becomes a terribly important sales tool.
If these traders had prepared themselves better with a written business plan and some serious soul-searching, more could have survived. That's what writing a business plan for trading is all about. That's what realizing what the market is and accepting it for what it is, is all about. That's what surviving and being paranoid is all about. That's what this book is all about.
The premier entrepreneurial finance educational event in the United States. This is not a networking event or forum it is an intensive educational workshop on understanding what investors want, how to present and structure your business plan and investor presentation, how to target the angel market, and how to work with investors you have been introduced to through alternative funding resources. More than 50,000 entrepreneurs have attended this event since 1989. The presenters have been sponsored by more than 200 major entrepreneurial organizations. Contact International Capital Resources, 388 Market Street, Suite 500, San Francisco, CA 94111. (415) 296-2519. www.icrnet.com.
But success means more than simply numbers to John. It gives me great satisfaction knowing that I can help to fulfill individuals' dreams, he begins. It's especially pleasing to know that our investment philosophy is in sync with the investor. It's very important that investors understand our investing process, which is really a significant portion of a long-term business plan that every investor has when pursuing financial goals. Indeed, when the Calamos team considers success, they think about their investors reaching their goals. We don't keep a close eye on performance we just stick to our investing process and discipline, and service clients.
Taking time management programmes a step further, there is considerable evidence to demonstrate that the stress experienced by market traders is significantly reduced when they are supported by a comprehensive trading business plan. The trading business plan All business schools teaching MBA courses emphasise the necessity of planning and structure. Most businesses fail because they do not plan adequately. Trading is no different to any other business. A business plan for traders is a way of placing your knowledge about the psychology of successful trading plus your methodology into a comprehensive business plan to make money in the markets. Having a business plan is not only a way to reduce stress but is the cornerstone of the paramouncy principle. With a business plan, every contingency can be considered while you are away from the stressful situation of trading. You are able to consider new methods of working and test alternatives to your current plan. As a result, when you...
Business plan area 1 - Decision making Not only does your business plan take into account your abilities to make decisions, it should also account for the type of trader you are. Position traders enter and exit positions within days or weeks. Day traders enter and exit trades within a few hours if not minutes. You need to become a competent position trader before you can day trade. Once you have decided what type of trader you are your business plan needs to reflect this. If you are a day trader what is your time frame for making profits Do you use more than three time frames to confirm signals Do you jump in and out of the market several times each day or are you like one trader I know who on one occasion made 57 round turns in a single day trading stock index futures Perhaps you get in the market only a couple of times each week or each month Perhaps you are looking for those few excellent trades that come along in each market once or twice a year On page 33 I introduced the concept...
If you do not have the above information in your business plan you will not have the confidence to execute trades flawlessly and fearlessly. It will help you to ask these three questions of each and every system vendor you encounter. If the vendors do not employ these performance criteria, it would be interesting to find out exactly what outcome criteria they use. Perhaps the purpose of the system is to analyse parameters of the market leaving the discrete rules of entry and exit to you. Any system will have a number of problems or biases and it is essential that you identify these problems. These biases have their roots in elementary statistics and psychology. Some biases that affect trading system development are as follows Developing a money management plan as outlined in the previous chapter in the section entitled Financial Management , should be applied to the business plan. For example, we discussed rules, which would ensure that on each trade or contract we would not risk more...
The final section of the Camp framework focuses attention on financial analysis. Investors will carefully analyze financial projections or pro forma financial statements, since start-ups do not have historical financial data. This is a way for investors to think through financial implications of management decisions made in preparing the business plan.
The manager using the fundamental approach looks to pair stocks in the same industry when he believes that one will outperform the other based on the fundamentals of the two companies. The specific metrics the manager considers will vary from manager to manager, but the characteristics of those metrics will follow some general themes. For the duration of this explanation, consider the example of Coke and Pepsi both companies are in the same industry, follow a very similar business plan, and are similarly affected by major macroeconomic news events. While these conditions are preferential to the technical manager, they are virtually required by the fundamental manager. The first condition of a pairs trading strategy using the fundamental approach is that the companies be as close to identical in terms of their businesses as possible.
In an attempt to determine which company will likely outperform in the short to intermediate term, the manager will consider both the product lines and profitability of each company. Each of these factors affects the success of the company in executing its business plan and in controlling market share. Perhaps more importantly, these factors have a significant impact on how each company is viewed by the market, both individually and relative to one another.
Does all of this mean that there is no relationship between stock price and company value Of course not. In the long run, companies that have good business plans, good management, good earnings, and needed products or services tend to move higher. Businesses that are failing, that have poor management, and that have obsolete products tend to go down. But the catch in that statement is the phrase in the long run. In the long run, we will be in and out of the stock a dozen times. In between, the up and down waves may be caused by the fundamentals, but those moves are very difficult to predict from a fundamental standpoint. So, the shorter the time frame of trading, the more difficult it becomes to base decisions on fundamentals. That brings us to the technical picture. It reflects the supply and demand for a company's stock rather that the supply and demand for the goods or services produced by that company. And that is what we want to trade the stock, not the company.
Many people want me to invest in their business plan. One of the things most of them say is, Once this company is up and running, we're going to take it public. That statement always intrigues me, so I ask what all of you should ask Who on your team has experience taking a company public, and how many companies has that person taken public If the answer to that question is weak, I know I am listening to a sales pitch more than to a business plan. Another line I look at in the numbers of a business plan is the line item called salaries. If the salaries are high, I know I am looking at people who are raising money in order to pay themselves fat salaries. I ask them if they are willing to work for free or to cut the salaries in half. If the answer is weak or a definite No, I know the true mission of their business. The mission of the business is probably to provide them a job with a nice salary.
Today, most everyone wants to invest in real estate. A lot of people have lost money in the stock market in the last 5 to 10 years and have now become interested in real estate. So develop a business plan to include in your identity package. Show them that plan and your activity list. Go to three to four people and ask, If I find a deal, would you like to use your credit, not even your money, to get the deal Then we'll split the profits and set up a win-win situation.
First, prospective investors will not necessarily share the entrepreneurs' level of enthusiasm for the project. Investors must be thoroughly convinced of the merits of the opportunity before any discussion of valuation or terms. Entrepreneurs have to understand that sophisticated investors are besieged with projects. Investors could look at business plans seven days a week. A project may soak up 100 percent of an entrepreneur's life, but it constitutes only one more business plan on an already prodigious stack of business plans as far as the investor is concerned. So entrepreneurs have to adjust their mind-sets they have to concentrate on selling the investor on why this venture is a great deal. Also, entrepreneurs sometimes become upset because an investor fails to jump at a project they fail to realize that the investor may have invested in three similar projects, each of which turned sour. As we mentioned earlier, for most early-stage enterprises, the demand for equity capital...
Part of your due diligence is to come up with a sales and marketing plan to lease your spiffy new property with great tenants and great leases as quickly as possible. Just as any new forward-looking, successful business has a business plan, your project needs one too. This part of due diligence is often overlooked because the person managing the update has his hands full with those challenges. And most great project managers don't have a salesperson's mentality. They're usually very analytical, but not the salesperson you need to have on the team.
Financial management can be the determining factor in the survivability as well as the success of your business. It is important to make careful financial projections as a way of both planning and controlling the business. While accounting is essentially a record of historical performance of the business, financial projections, or the creation of pro forma financial statements and budgets, helps you to think through the financial implications of the decisions made during the preparation of your business plan. In previous sections of the business plan, you have analyzed the market and set objectives. In this section you will put into financial terms the strategies detailed in the business plan. You document the past in financial terms (if applicable), take a forward look, and complete the final task in writing the business plan, that is, forecast likely conditions and project allocation of resources to support future operations.
The purpose of these financial documents is to help you assess future performance and funding requirements. After completing the projections and statements mentioned above, you will be able to state (1) the amount of funds needed over the course of time covered by the business plan, (2) when funding will be needed, (3) the types of funding most appropriate (e.g., debt or equity based), and (4) what you are willing to give up to get the funding. In the case of a loan (e.g., loan amount, collateral, interest rate, and repayment schedule) or in the case of equity financing, state the percentage of the company to be given up, proposed return on investment, and the anticipated method for taking out the investor (buy-back, public offer, or sale). You also will be on firm ground when describing how the funding will be used and be able to prepare a uses of funds statement.
Once you have completed the main body of the business plan, consider the additional records that should be included pertaining to your business. These supporting documents are records that back up the statements and decisions in the body of the plan. Include resumes, financial statements, credit reports, copies of leases, contracts and letters of commitment to purchase, legal documents, maps of location, descriptive materials about your products or services, collateral sales and marketing materials, reference lists, glossary of terms, and any other miscellaneous documents best assembled with the plan.
Some of the criteria are relevant to more than one standard. For example, the writing of a trading business plan represents excellence in discipline and planning and is a standard in itself, yet it also is a major behavioural method of reducing stress in the trading context. Financial management and risk assessment is integral to any business plan but it is also a standard in itself.
In 1999, all I hear and read about are IPOs. There is definitely a mania. As someone who is often asked to invest in other people's businesses, I often hear sales pitches like this Invest in my company, and in two years we'll be going public. The other day, a budding future billionaire CEO called me and asked for an opportunity to show me his business plan and offer me the opportunity to invest in his future Internet company. After the presentation, he nodded slowly with a sly cockiness as he said, And of course you know what will happen to the price of your shares after the IPO. I felt like I was talking to a new car salesman who had just informed me that the car I wanted was the last one of its kind and he was doing me a special favor by letting me have it for the list price.
Small businesses came to Mark when they needed venture capital, or money to expand their businesses. Since I needed lots of money to expand, rich dad encouraged me to meet with him and learn from his point of view. It was not a pleasant meeting. Mark was far tougher than my rich dad. He looked at my business plan and my actual financial statements, and listened for about 23 seconds to my glorious plans for the future. Then he began to tear me apart. He told me why I was an idiot, a fool, and completely out of my league. He told me that I should never have quit my daytime job and that I was lucky my rich dad was his client. Otherwise, he would never have wasted any time on someone as incompetent as me. He then told me how much he thought my business was worth, how much money he could raise for it, his terms and conditions for the money, and that he would become my new partner with a controlling interest in the company. As I said, the term VC had a very familiar ring to it.
Required approvals Changes of strategic importance (e.g., acquisitions, divestitures, and changes in the business plan) must be approved by the private equity firm. Goals are milestones set in business plan and growth strategy Goals reference cash flows, strategic plan, and business plan
It's really important to review someone's business plan before you invest in the business. However, sometimes even the business plan doesn't reveal the critical information you need to make a sound decision. And it's not always easy to assess a situation objectively until you learn as much as you possibly can about the deal and the new owner's plans.
For whatever reason, investors often make the mistake of investing in something they don't think will work. Before you invest in anything, review the business plan and consider whether you think the business is viable. Ray, an HR professional by day, also loved comic books. In his spare time, he was trying to get into the business of brokering ads in comic books. With this type of business, Ray wouldn't get paid until the ad was placed in a magazine, but he believed he had the contacts and the desire to make this business work. He was confident that he could make a six-figure income selling ad space in comic books. Unfortunately, Ray had no money. For him to get out there and try to bring Ray lived in California, but the annual comic book convention was in Chicago. He knew he needed to go to that convention to meet with publishers face-to-face and convince them to include ads in their comic books. He needed to meet with the right potential advertisers companies whose products would...
Day Trading has been greatly disparaged by the media, with reporters focusing on those who have lost all their money, while ignoring those who are successful. Many of the subjects of these reports were inexperienced and untrained, and hadn't yet learned the fundamentals of the business they had chosen. They risked all they had without a plan, without rules, and without any tested, systematic methodology whatsoever. No business can survive without a solid business plan rigorously followed, yet we see no sensationalized media stories about all the small businesses that fail each year in other industries as the result of the same lack of planning.
The legal costs of a Rule 506 offering only to accredited investors can be as low as 6,000 (excluding filing fees) if the business plan has good disclosure in which case a wrap-around can be used wrapping the legal requirements around the business plan to provide disclosure sufficient to protect against successful fraud claims in the future.
Comes not from the successful companies whose research stays on schedule, but from those whose business plans fail. When the single product of a one-product company fails (say the mice die from side effects), the only disagreement between the optimists and pessimists is likely to be the liquidation value of the used laboratory and office equipment. Even the optimists can not give a very high value to these. When all the companies in this hypothetical cohort are averaged, the divergence of opinion declines over time. Thus, these stocks should under-perform the market. will, management, brand names, a good business plan, etc.). There is much more scope for disagreement about the value of these various intangibles than there is about the value of tangible assets (valued at historical cost minus depreciation).
For example, a seed company is looking for a small amount of capital (between 50,000 and 250,000), and needs to think through its concept and develop a prototype. Market research has begun but is not yet finished. The business plan is in development and the management team is being formed. Compare a start-up. The start-up is a year-old company, legally structured but already in business. It may be test marketing its product or service and may even be bringing in revenue although not yet making a profit. Management has been assembled and is starting to form a team. The business plan has been completed, and the company is prepared for manufacturing and sales. It lacks only capital.
For entrepreneurs with promising start-ups, Venturescape is a portal to venture capitalists and institutional investors. The visitor can search for venture capital sources on the Venturescape database and route their business plan to selected venture capital firms through the site. www.vfinance.com. vfinance offers an online search service for venture capitalists and angels. Visitors can post their business plan, and the site publishes venture capital data. The site claims to attract deal flow for investor-client consideration, and therefore provides some level of brokerage services.
Hosts its five-minute forum monthly. Business owners present brief descriptions of venture opportunity for the purpose of helping raise capital. Focus is on new ventures seeking early-stage investors. Prescreened ventures present business plans that must conform to OVA guidelines. Contact Ohio Venture Association, 1120 Chester Ave., Suite 470, Cleveland, OH 44114. (216) 566-8884.
Eddie's new business was going really well, but then the borrowing scene changed and there were no funding sources to tap. He found himself in a situation in which people didn't see an opportunity in his teaching them to be bird dogs to find new investing opportunities from seller-financed mortgages. So he needed a new way to continue to support himself. He decided to try to develop other alliances and work with other types of cash flows and develop a school for all alternative cash flow investing. He wrote a business plan that described how he would do that. Whether to invest in Eddie's new business is really the same as deciding whether to invest in Rita's catering business because it's an intangible business, and the only collateral is Eddie himself. If Lisa believed enough in Eddie's idea, and if she thought his business plan was strong enough, and if the term of the money that Eddie needed and that Lisa invested was short enough, Lisa would consider investing in his business. She...
Or experientially trained for the task, they view it as an onerous activity. Still, it is an activity inextricably woven into their job description and inextricably woven into their chances for success. The troublesome task of raising capital is simply inescapable. Angel Capital analyzes the problem, then presents strategies for addressing it. But more important, the book provides entrepreneurs with tools for articulating their vision, enabling them to move forward in the private market, furnishing contacts with which to begin their search for capital. However, too often the entrepreneurs are ill-prepared, not having built their management team, prepared for valuation and due diligence, or written their business plan. In a word, they have not developed a capitalization strategy. This book presents a workable capitalization strategy. For entrepreneurs, Angel Capital also provides protocol on how to cost-effectively begin developing their own proprietary info-base of high-net-worth...
A BUSINESS PLAN FOR TRADERS Putting together a proper plan will force a trader to focus on his strengths while letting him avoid conditions that are unfavorable. In High Probability Trading, I refer to a trading plan as a trader's business plan. Very few businesses succeed without a business plan, so why should a trader think he's above it Trading is a business and don't ever forget it or take it as less than that. Business plans are made either before going into business or when trying to raise more capital once in business. This should hold true as well for traders. Before you get serious about trading full-time, you should take some time and put together your business plan.
Value and prioritize the paths that exist You are a venture capital firm with multiple business plans to consider. How do you value a start-up firm with no proven track record How do you structure a mutually beneficial investment deal What is the optimal timing to a second or third round of financing
At the start-up phase of a new business, there are many sunk costs and expenses required to get the business started as well as much preparation and hard work. As the owner of the new company, you need a detailed business plan, which outlines the purpose of the business and how it will get started and conduct its daily operations and also provides guidance on budgeting issues so that the company can manage its revenues and expenses. You will need to acquire assets to start the business and hire employees. The start-up phase, which usually covers the first year, is the most important and difficult part of starting a new business. Most new businesses take some time to be profitable and therefore you, as the owner, have to be able to bear the losses until your company can begin turning a profit. Just as a new company is based on a business plan, so should trading options. We have already discussed the type of business plan that is required for trading options an investment and portfolio...
This is by far the most exciting phase of your trading career. But it also requires the most discipline, even more so than in the start-up phase. It is very difficult to get started and actually make money. It is even more difficult to stay profitable. The tendency for most businesses when they begin making money is to think that they are invulnerable and will just continue making more and more money. They begin to stray from the business plan and make riskier choices in the desire to make even more money. They may even try to move too soon into other markets to capture as much of the business as possible, and end up expanding too quickly. Once the business gets too overextended, one small slip-up or a series of losing months usually has disastrous effects and could bring the business crashing down.
Trading and money management is a business and in order to succeed, product teams need to raise research and development capital as well as trading capital, from either inside the firm or outside it. Either way, the product team will need to describe in a persuasive manner why a system can potentially be better than competing systems and worthy of seed capital. As with most business proposals, a focused, professional business plan is essential, especially in a start-up stage. As a template, we present the Money Document, the primary deliverable before fully laying out a trading investment system's business plan. A well-done Money Document serves as a Vision and Scope Document by outlining the business goals of a proposed trading investment system in a clear and concise fashion in order to persuade management or outside investors (that is, collectively, seed capital investors) to provide the initial capital needed for research and subsequently for development of a trading investment...
Suppose Silverado Springs Inc. is considering a new spring-water bottling plant. The business plan forecasts an internal rate of return of 14 on the investment. Research shows the beta of similar products is 1.3. Thus, if the risk-free rate is 4 , and the market risk premium is estimated at 8 , the hurdle rate for the project should be 4 + 1.3 X 8 14.4 . Because the IRR is less than the risk-adjusted discount or hurdle rate, the project has a negative net present value and ought to be rejected.
I Start-up IPO This is a company that didn't exist before the IPO. In other words, the entrepreneurs get together and create a business plan. To get the financing they need for the company, they decide to go public immediately by approaching an investment banker. If the investment banker thinks that it's a good concept, the banker will seek funding (selling the stock to investors) via the IPO.
Don't assume that institutional firms are standing by with an open checkbook waiting to invest in the first property that you bring to them. That isn't the case. These investors have accumulated large pools of capital because they are very careful, not because they throw money at every opportunity presented to them. As a smaller investor who is familiar with the local market, you will have to carefully select a property that you believe has potential and represents a sound investment. Then you need to be prepared to put together a well-thought-out business plan, which will include data specific to the area and the property, such as the unemployment rate, average vacancy rates, and rental rates for similar properties. Institutional investors are very selective when they purchase properties, so be prepared to sell them not only on the property and the area, but on yourself as well.
The risk plan should set expected return and volatility (e.g., VaR and tracking error) goals for the relevant time period and establish mileposts which would let oversight bodies recognize points of success or failure. The risk plan should use scenario analysis to explore those kinds of factors that could cause the business plan to fail (e.g., identify unaffordable loss scenarios) and strategic responses in the event these factors actually occur. The risk plan helps ensure that responses to events be they probable or improbable are planned and not driven by emotion. Difficult business climates have happened before and they will happen again. The planning process should explore the many paths to the long term and prepare the organization, and its owners and managers, for the bumps3 along the way. If any of these bumps are material, concrete contingency plans should be developed and approved by the organization's owners and managers.4 6In this context, a large holding refers to one that...
Shorting is considered a high-risk activity and is probably inappropriate for the average investor. Nevertheless, Watson demonstrates that if risk controls are in place to avoid the open-ended losses that can occur in a short position, shorting can reduce portfolio risk by including positions that are inversely correlated with the rest of the portfolio. On the short side, Watson seeks out high-priced companies that have a flawed business plan often one-product companies that are vulnerable either because the performance of their single product falls far short of promotional claims or because there is no barrier to entry for competitors.
Provides a forum for entrepreneurs to present business plans to investors for the purpose of obtaining financing. Sophisticated institutional and private investors who invest in small, privately held, early-stage companies attend. Members make their own decisions this group is not an investment pool. Investors negotiate their own terms directly with the company. Contact www.AngelVentureFair.com. Early-Stage Investment Forum. Presented by the Northwest Entrepreneurs Network. An event for early-stage start-ups to present business plans to prospective angel investors and venture capitalists. Deals are subject to conscientious prescreening. Approximately 15 companies each present for 15 minutes. Exhibit space is also available. Contact Northwest Entrepreneurs Network, P.O. Box 40128, Bellevue, WA 98015. (425) 564-5701.
When figuring out how much money is needed to start trading, it is important to take a big overall view of your current financial situation. The best thing to do is develop a basic business plan. This should include at least six months' worth of planning that entails living expenses,
Do you have a written business plan How much money will you trade In what markets How will you choose entries and exits How will you manage risks, use stops, and allocate capital Do not go near day-trading without a written plan. Be sure to keep separate records for day-trading and position trading. Find out which one is more profitable for you.
The quality of the business plan suggests the quality of the venture, the deal itself, and the people who wrote it. At ICR, fewer than two percent of business plans received are given serious evaluation. The rest simply don't merit in-depth analysis. The business plan presentation is vital to getting an in-person meeting with investors. We refer you to Appendix A on drafting an investor-oriented business plan to better appreciate what investors typically look for in venture documentation, organization, content, and presentation.
There are broad and narrow definitions of venture capital, and here we'll use a narrow definition investment in private start-up companies, mostly high-tech companies. These companies may be as early-stage as an idea and a business plan, or as late-stage as a private company that is already producing a product, needs expansion capital, and may be preparing to go public (make an initial public offering of its stock). As thus defined, venture capital is probably the riskiest of investments. Most start-up companies fail to survive, and only a small percentage become highly successful. How can our fund invest prudently in such risky ventures
Investment banks perform thorough due diligence on LBO targets (usually alongside their sponsor clients) and go through an extensive internal credit process in order to validate the target's business plan. They also must gain comfort with the target's ability to service a highly leveraged capital structure and their ability to market the structure to the appropriate investors. Investment banks work closely with their sponsor clients to determine an appropriate financing structure for a particular
Then came the so-called Internet bubble. The latest technology, the World Wide Web, was going to transform the way the world did business. Many Old Economy businesses would be replaced by New Economy businesses that sold goods and services over the Internet. Any company with a business plan and the right buzzwords could raise millions of
Presenting your business to investors is essential in building business success. Your business plan must offer a desirable opportunity that encourages the investor to take the next step just based on written pages. When you have the opportunity to make a presentation on your business, you are the focus of attention and your presentation material provides images to enhance understanding. In both cases, you must understand your audience and provide the right information in a manner that will help investors develop a reasonable understanding of your business. The business plan must focus on why your solution provides a very desirable customer benefit. Have learned that creating and executing against a well-devised business plan is key to success. Investors are looking for a business plan that Provide a footnote to show that the business plan is proprietary and confidential and note DO NOT DUPLICATE on each page. If you are offering more than one product service, or more than one...
Your objectives in this section are to create a readable, credible, brief overview of your business plan. A second, equally important, objective is to demonstrate appreciation of investor or lender needs. From a funding acquisition perspective, the executive summary may be the most important tool for introducing your offering to lenders and investors. A final objective of the executive summary is to motivate and entice the reader to review the document in its entirety. Although mentioned first and placed at the front of your plan or under separate cover, the executive summary is best written last, since it serves as a concise overview of the business plan and highlights the key points from every section of your completed plan. In a few precise, clear sentences, the executive summary crystallizes the hours of labor you have spent in researching and writing each section. A maximum of one or two pages is recommended.
The comprehensive Marketing Plan section will thoroughly explain the scope of your marketing activities quarter by quarter for the period encompassed by your business plan, including market research, positioning, pricing, collateral materials, marketing support systems, communications and distribution channels, merchandising, and sales.
The two companies being considered in this trade are Bed, Bath & Beyond (BBBY) and Linens n' Things (LIN). These companies make an appropriate pair because they are not only in the same sector and industry, but they follow similar business plans both stores focus on the specialized home goods market. For the purpose of this example, it will be assumed that the pairing has met with the fundamental manager's pair criteria, which may include such metrics as relative P E, relative industry ranking, growth expectations, as well as a variety of others a vastly simplified comparison will be presented. Generally, a fundamental manager will determine that of the two companies being considered, one company is positioned to outperform the other over the expected duration of the trade, usually several months. While different managers use different criteria, the common element necessary to select a trade is a belief that one stock is a better value than the other based on fundamental criteria.
Procrastination You purposely avoid a challenging task such as making a trading diary or reading literature on how to make a business plan. There is always a good reason why it should be done tomorrow and not today. Sometimes procrastination can be an indication that the task or goal is very important for your own development and is an area you have neglected and have some fear of.
A hedge fund's organizational structure and business plan can affect investment returns, and must be carefully analyzed prior to committing capital to the manager. Organizational distractions can disrupt the investment decision makers' ability to focus on managing the portfolio. Conversely, effective internal controls can provide important safeguards against fraudulent practices in the fund.
The most critical part of having rental property is management. I highly recommend that you not manage your own property. It's a high liability endeavor. Instead, pay someone from 7 percent to 10 percent to manage your property. You'll need systems in place to screen tenants and collect rent. Set up a business plan detailing how you will manage rental property.
The advent of the euro and the growth of online trading has resulted in a greater focus on the client within the majority of sell-side institutions. The infrastructure cost of this focus can be high though, and this has prompted many to look at their business plans, specifically how they deliver their FX services to their clients. This changing landscape of the FX market means that it is harder to make money as volumes, volatility and spreads are all much reduced. At the same time as many of the traditional sources of revenue have contracted, many financial institutions have discovered the tremendous cost of creating an efficient infrastructure to deliver products to their clients in the best possible fashion. Following initial pan-industry enthusiasm for e-trading, many have decided that it is not such a long-term proposition as it first sounded due to the costs associated with developing and more importantly enhancing an offering.
This is the basis of what you need to know in order to make money on the markets. The rest is experience, a business plan or system, and the right attitude. There is a lot of other information that should be considered but this simple statement holds the key to a reasonable second income on the markets. And perhaps even financial independence.
|Business Plan Templates|
Better Business Planning
A business plan is an essential document for anyone commencing a new business, already in business and critical for anyone seeking funding from a venture capitalist. The business plan needs to be comprehensive, well thought and should contain sound business reasons. You can get all the info you need here.