Answer to Question #184009 in Management for sahba

Question

When a new business is started, or a patent idea needs funding, venture capitalists or investment

bankers will want to see a business plan that includes forecast information related to a profit and

loss statement. What type of forecasting information do you suppose would be required?

Answer 1

When a new business is started, there is always need for funding and approaching financers such as bankers and venture capitalists requires the presentation of some crucial data for their funding decisions and support. When seeking funding, the following information should be presented: Information about the developed patent - this includes how the business will work, and its SWOT analysis together with the new features of the patent.

Future forecasted sales and the expected profits from the business.

A well defined business plan including cost of production, cost of machinery, manpower or labor requirements, as well as the projected cost for running the business.

Any significant expense or income such as income from royalty of the patent.

Cost benefit analysis of the patent must also be presented to help investors focus on the return on investment of the business.

Generally, presenting the above forecasting information may help influence the decisions of the venture capitalists and financers.