An integral part of the business plan is to develop a business model. Simply put, a business model describes how a company plans to make money. It is not what you do, but how you will make money doing what you do. A solid business model is the link between venture strategy and financial plans. Projecting the financial performance and requirements can be classified as financial goals of the venture. A venture capitalist will want to know not only the numbers, but how those were derived.
For this professional assignment, you will develop both a business model and financial goals for your new venture. Using chapters 5 and 9 of your textbook for reference, develop and submit the following:
- Define the business model of your venture company, explaining why it is you have selected this business model as the ideal model for your venture.
- Create a five-year revenue projection and illustrate how you have come up with the projected numbers.
- Develop a five-year pro forma P&L statement and justify your assumptions within the statement.
- Devise a five-year pro forma cash flow statement and justify your assumptions within the statement.
- Design a five-year pro forma balance sheet and specify how the balance sheet relates to the other two financial statements in parts (2) and (3).