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Business Plans and Financial Modeling

Overview

Business Plan is a document giving detailed description of a new or existing business, including management’s vision and objectives and how these objectives are achieved through the company's products or services, its marketing plan and management principles.

The financial component of the Business Plan includes projections for income, costs and other cash layouts. The Business Plans are accompanied by a projected balance sheet, profit/ (loss) statement and cash flow (source and application of funds) statement.

Why Need a Business Plan

A thoroughly researched and well prepared Business Plan reduces the risks of unforeseen situations. It helps in the following areas:

  • A well researched market analysis provides better revenue estimates by defining the potential customers and the expected market share.
  • Market analysis also helps in devising an effective marketing strategy to compete in the marketplace.
  • The financial analysis component of a Business Plan provides an estimate of start up costs, recurring operating costs and thereby determining the financing requirements for initial investment as well as for working capital.
  • Facilitates the investors and lenders to finance the business.
  • Business Plan sets up realistic milestones for the organization by forecasting where the business will be at the end of every year over the next five years.
  • Business Plan acts as an ongoing business tool to monitor the actual growth / progress relative to the original plan
  • It anticipates potential problems so that a mitigating plan can be put in place.
How Does EDS Help
EDS has experienced personnel in developing ‘Business Plans’ for small and medium range organizations. We use our standard methodology and cover the following aspects in the Business Plan:

  • Define management’s Vision, Mission, Core Values and Objectives.
  • Prepare a detailed market plan, identifying the target markets, market size, marketing opportunities, market tests, market penetration strategy and communication strategy.
  • Conduct SWOT analysis workshops with the main stakeholders.
  • Define macro level organization structure and management of the proposed business.
  • Prepare financial projections for the first 3 – 5 years period, highlighting capital costs, monthly recurring costs and projected revenues; thereby preparing projected balance sheet, P&L and Cash Flow statements.
  • Present implementation strategy in terms of year-1 implementation plan.