What should you say in your business plan?While only 2 pages in length, the executive summary is by far the most  important component of your business plan or proposal. It is designed to  summarize the key elements, capture attention and most importantly, showcase the  financial highlights.

So, if you only have 2 pages to convey a significant amount of information  and summarize the financial upside, how do you decide what to put in and what to  leave out? Which financial features are critical to emphasize?

Depending on the purpose of your document and the intended audience  (investment, sale, partnership, strategic alliance, joint venture etc.), you  will want to tailor your financial disclosure to suit their needs and  expectations. What would they want/need to see in order to make an informed  decision?

At a minimum, you need to clearly state what financial input is required from  them and what they will get in return – i.e. a share, debt instrument, license,  exclusive right etc. Next, highlight the expected net profit and cash flow over  2-3 years. Also, give a clear indication of return on investment (ROI) AND a  realistic, well defined exit strategy.

In an executive summary, it is important to be succinct and focused. It is  not the time to tell your life story, overpromise with unrealistic projections  or overwhelm with too much detail. You will only get one chance to make a good  first impression and capture the attention of the reader. In fact, many  sophisticated investors have told me they rarely read a business plan or  proposal in its entirety. They make their decision on the strength of the  executive summary and their assessment of the owner/manager (in terms of  character, knowledge, skills and tenacity).

Focus on “what’s in it for them”. Show them clearly how they can benefit and  when the result will be crystallized. Give them enough detail to understand the  industry, opportunity and unique solution you provide. And most importantly,  clearly summarize the key financial metrics of profitability, cash flow and  ROI.

In short, make it EASY for them to invest in YOU.

Article Source: http://EzineArticles.com/6107414

Rhondalynn Korolak

Rhondalynn Korolak

Did you know that inventory is one of the great hidden costs of business?

Business owners should understand its importance of keeping it under control.  Visit http://www.financialforeplaybook.com  for more on this story…

Is Inventory Killing Your Business?

Did you know that inventory is one of the great hidden costs of business?Very few business owners understand its importance and the significance of keeping it under control. Inventory ties up your cash while providing little benefit to revenue – until the items are sold.  Excessive inventory can weigh a business down and ultimately lead to revenue losses.

Excess inventory is so often the primary cause of cash flow problems that it is worth your time and effort to consider how your current stock holdings are affecting the health of your business. And it’s why you should have a clear understanding of how much inventory you have, how much you should realistically have, what it’s worth today, and how old it is. 

Every time you buy stock for your business, you should see the purchase as an investment. Like any other investment, you should expect it to provide you with a financial return in a short period of time.  If there is a significant gap between when you buy the goods and when you turn them into cash by selling them and collecting the money, you need to re-assess the value of your investment. 

When you spend before you earn you are effectively taking out a loan for the intervening period. Very often this will require a ‘real’ loan from some sort of finance company, a delay in paying suppliers or a delay in paying yourself.  If you want to improve the cash flow and health of your business quickly and without spending a dime on advertising, take some time out today to review your stock levels and get rid of excess inventory. 

 

 


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