BPparts3

Market analysis
No BP would be complete without talking about your market. Who are your customers? What do you know about them and their preferences? Describe customer base, and why your product will appeal to the targeted customers. This section should otline the market potential for your service or product. Remember, that you’ve got to convince lenders that the market you’re after is relatively large and growing. You should be prepared that you’ll need to do some research for this section.

Competition
Describe in-depth your major competitors - products they provide, geographic location, sales figures, etc. Lenders are keenly interested in how and why a startup feels it can take away market share from an established company. A competitive analysis is a critical - yet often the most underdeveloped - section of many BPs. Don’t be afraid to say your competitors are better than you in one area. Just counter that with how you will make up the difference. This not only addresses a concern the reader will probably realize anyway. It shows him that you truly understand your business, and the difficult tasks that lay ahead.

Operations
Examine the production and supply of your product or service. List all your needs: factories, warehouses, machinery, labor, materials, etc.

Advertising strategy
How do you plan to tell the world that you’re open for business? Will you rely exclusively on word of mouth (not a good plan unless you’ve already got a reputation and a list of customers)? Will you advertise in print, television, radio, on the web or maybe all of this? Will you use online marketing tools to get your company listed on search engines? Or will you use something else? You’ll need to include how much you plan to spend on advertisement.

Detailed Financial Analysis
This is one of the most iportant part of your BP. The assumptions that you make in this section will make or break your company’s success. That’s why this section is most dreaded by entrepreneurs. More so that the all-important introduction/Executive Summary. It involves supplying numbers and figures that are often hard to come up with. Remember, that most BPs are not even read because the financials are not accurate. Many investors look right after the Executive Summary at your financial numbers.
If your business has been up and running for a while, then you’ll start by providing the track record - the balance sheet, profit and loss sheet, cash flow statements, and budgets.
If starting from scratch, you’ll make estimates. Among the many figures to include are: sales or revenues, direct costs, costs of materials, wages/salaries, gross profit. Profit margins. Overhead costs, rent and utilities, tax, insurance, cash flow, professional fees, and interest charges.
List source of funding, budget, financial projections, income statement, balance sheet. Add details of available security for required funding, if any; details of own funds and assets available for the project, if any.
One of the main document here will be a 3-to5-year financial projection that should include a summary of your financial forecasts, with spreadsheets showing the formula you used to reach your projections. You’ll need balance sheets, income statements and cash-flow projections for the entire forecast period.
The summary in this section is also were you would tell a lender how much money you’d like to borrow to cover your start-up costs, how the funds will be utilised and timing thereof.
One more comment regarding the financial section of your BP. Put the tables and charts in the appendix and refer the reader to them. That way you don’t have big, distracting charts of numbers in the middle of your text.

If you’re unsure about using this kind of financial modeling, find a professional. It’s worth the money.