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Business Model and Financial ProjectionsCritical components of your business plan include the revenue model, a description of the cost structure and projections. The revenue model distinguishes each income stream and the cost structure details the expenses associated with those income streams. The revenue and cost schedules should be forecasted into the future to construct a set of projections, which should show margins, EBITDA and key profitability metrics (e.g., profitability by product line, costs as percentage of sales, etc.).You should include as part of your presentation information to support the business model such as: “We're going to sell this many products to this number of clients or partners for this amount of money, resulting in a gross margin of this. Of those gross profits, this is how much we can bring down to the bottom line.”
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Rob Stein, Women's Growth Capital Fund (5:27) Stein stresses the importance of a well reasoned business proposition and revenue projections: How will you make money?
MEconomy, Inc., Silicon Valley 2001 (1:13) After describing MEconomy's business model, Springboard Alumna Valerie Buckingham tells the potential investors about MEconomy's expected revenues and gross margins. Finally, she talks about the upside potential expected with the value-based pricing model.
VIPDesk.com, Mid-Atlantic 2000 (1:37) Using an typical contract as an example, Alumna Mary Naylor describes their revenue streams and the typical contract size. |
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