Fleurette Jade August 4, 2021 Business Plan
Projections are important not for their actual numbers as much as for their presentation of drivers, relationships between growth and spending, key spending priorities, sales aspirations, and assumptions related to cash flow. They have to be solid and integrated, but accuracy is much more a matter of transparent assumptions than accurately predicting the future.
The most common mistake by far is on profits. Startups that grow don`t produce profits. Investors make money on valuation increases, not profits. Real businesses rarely produce more than single-digit profits. Big profit projections are sophomoric. Take all those profits and dump them into marketing expenses and you`ll be better off.
There are tons of good outlines available, plus books, blogs. Down below I have some specific resources related to my work; but not now. There is no single best outline to use, but investors will want to know about the market, potential growth, competition, differentiation (or secret sauce) strategy, tactics, key milestones, important assumptions, the management team, and financial projections including use of funds, projected sales, income, balance, and cash flow. Use your common sense to put first things first and organize it all well.
Without a business plan as a baseline, it will be far more difficult to track your progress, make adjustments, and have historical information readily available to reference when making difficult decisions. Creating a business plan ensures that you have a roadmap that doesn`t just outline where you plan to go, but where you`ve already been.