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Further
Reading ...
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3 Super-tips To Build, Promote And Profit More From Your Website! - Steve Nash
Are you happy with your website? (Does your business even have one?) Does it 'perform' as well as you'd like? I'm a professional web designer and I always try to influence the design of a client site with the following three so-called...
Negotiating and Sales Skills Are Critical - Tim Randle
When I first started getting active in creative real estate, my skill set at negotiating was very weak. I had done the telemarketing thing for American Express as a financial planner and had studied and learned a few techniques. On the surface one...
A Never-Fail Business Opportunity - Alan Tutt
A Never-Fail Business Opportunity by Alan Tutt http://www.KeysToPowerProsperity.com Everywhere you look online, someone is touting a new, fully tested, impossible-to-fail method of making more money than you've ever dreamed possible. And if you're...
I Make Money Online. You Can Too - Tom Worsley
When I purchased my first computer over 10 years ago, I knew I wanted to put it to work and make money with it some how. But I knew nothing about computers or the Internet. I knew nothing about network marketing, search engine marketing, or even...
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Developing Realistic Financial Assumptions
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Written By:
Dave Lavinsky
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Many investors skip straight to the financial section of the business plan. It is critical that the assumptions and projections in this section be realistic. Plans that show penetration, operating margin and revenues per employee figures that are poorly reasoned, internally inconsistent or simply unrealistic greatly damage the credibility of the entire business plan. In contrast, sober, well-reasoned financial assumptions and projections communicate operational maturity and credibility.
For instance, if the company is categorized as a networking infrastructure firm, and the business plan projects 80% operating margins, investors will raise a red flag. This is because investors can readily access the operating margins of publicly-traded networking infrastructure firms and find that none have operating margins this high.
As much as possible, the financial assumptions should be based on actual results from your firm or other firms. As the example above indicates, it is fairly easy to look at a public company’s operating margins and use these margins to approximate your own. Likewise, the business plan should base revenue growth on other firms. Many firms find this impossible, since they believe they have a break-through product in their market, and no other - continued below ...
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company compares. In such a case, base revenue growth on companies in other industries that have had break-through products. If you expect to grow even faster than they did (maybe because of new technologies that those firms weren’t able to employ), you can include more aggressive assumptions in your business plan as long as you explain them in the text.
The financials can either enhance or significantly harm your business plan’s chances of assisting you in the capital-raising process. By doing the research to develop realistic assumptions, based on actual results of your company or other companies, the financials can bolster your firm’s chances of winning investors. As importantly, the more realistic financials will also provide a better roadmap for your company’s success.
About the Author
As President of Growthink, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share. For more information please visit http://www.growthink.com.
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If You Want People's Business, I Mean REALLY WANT People's Business, Do This - Susan Dunn Professional Coach
I've been planning to move for some time, but first I had to repair the foundation on my house (a common problem in south Texas) and also get a new roof because of hail damage (another common problem in south Texas. I finished getting those major...
Are You Ready To Go International? - Gihan Perera
Although North Americans were the dominant population on the Internet, that has now changed, and the rest of the world has caught up rapidly. And while English is still the most widely used Internet language, it's not the language of choice for...
THE REASONS FOR FINANCIAL FAILURE - Craig Lock
"Money can't buy you happiness. But it helps you to be miserable in comfort." Why do people not achieve financial success? Reason One: Lack of knowledge: or more specifically, a lack of desire to gain knowledge. Make the effort to read about...
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