Rather than presenting your business plan to funders only to hear difficult questions for the first time, why not think ahead of the questions funders will ask and incorporate those answers into the plan ahead of time? Here are some key questions and how you should go about answering them in your business plan.Why Are Your Chosen Managers Qualified?Funders are looking to see not just that the founders want to start the business in question, but that they have the qualifications to launch and run the business. They must at least have the qualifications to be hired to run a similar existing business.
Furthermore, some entrepreneurial skill from launching other businesses, products, services, or programs will be helpful. It should also be clear that each manager has functional experience in the areas which they will have responsibility for (such as operations, sales, marketing, finance, etc).Can This Business Scale Up?Investors will be especially interested in your business using its initial operations to create a foundation for much greater growth.
Wherever possible, explain how the business can add additional locations, products, services, or customer markets in the coming years, spreading the startup costs over more and more revenue. Investors will not be as attentive if your plan describes a small business which is created more or less to stay small.When Will The Business Break Even?Know when the business will reach break even from a cash flow standpoint (when monthly cash inflows begin to exceed cash outflows and the company no longer has to dig into cash reserves) and from the perspective of covering all of the initial startup costs and earning profit on top of that. Cash flow break even should occur within the first year if possible, while break even over startup costs may be in the first or second years generally. Funders want to see that your break even point is realistic, but that you are acting aggressively enough that it will not take too long.