In response to purogovind on Twitter
Purogovind: “Am wondering how important are financials. I just have a vague picture of it.”
(Context: filling up Financials section in the Business Summary for submission to The Power Of Ideas)
The Economics Times response:
“For those with an existing business, please use a table to summarise your past years’ revenues and profits and project the same for the next three years (if applicable). Also, state the funding you have received to date (whether venture capitalist, family, etc) and the funding that you are now seeking and how you plan to use the funds. Please give forward projection of your funding requirements for the next three years. If you are planning a new venture, please give projected financials, investment sought and plan for use of funds.
Essentially, it is important to have a sense of financials. This will help the VC to understand how much he needs to give out.”
@ Purogovind
ReplyDelete@ ET
Financial are very Important part of a winning Business Plan. Let me explain you in Layman's language.
Let us discuss what Venture Capitalist look in your Financials and how he thinks?
INVESTOR'S PERSPECTIVE -
"It's your job to show me that you've thought about all the ways your business might fail. Look at what happens to your financials as you change each of your major assumptions"
A POTENTIAL INVESTOR WANTS TO KNOW -
1. Is the profit picture for this enterprise credible?
2. What return will I earn on my investment?
3. When will I earn a return on this investment?
4. What is my potential exit plan?
5. How will I know if the investment is performing according to my expectations?
TIPS OF WRITING A WINNING FINANCIAL SECTION
- Complete research required to support your revenue assumptions.
- Include all funds required to launch your business.
- Consider ongoing cash flow needs.
- Include an exit or payback plan for lenders or investors.
- Forecast financials for an appropriate time period.
- Explicitly indicate when the company will earn a profit
I think this information might be helpful to all the readers.....
You commit an error. Let's discuss it.
ReplyDeleteWhat words... super, a remarkable idea
ReplyDelete