How to Analyze a Business Plan
A business plan is important for anyone that is starting a new business. For those who already have a business plan, it is important to revise it if the business is experiencing growth and development. Analyzing the business plan requires in-depth evaluation and examination, which is essential to make sure that the information is correct.
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Instructions
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The Steps
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1
Assess the executive summary of the business plan. This is the part where the company's mission statement and the purpose of the business will be listed. Make sure that the overview of the company is stated clearly.
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2
Search to find any summary about the company that mentions funds for starting the business. Try to find any information containing employee data in this section.
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3
Find the section where the product or service is detailed. Look to see what kinds of product or services will be involved with the business. Compare this with what other similar business plans are offering.
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4
Look to see if there are any strategies mentioned in the business plan about marketing and research. This section should indicate what the sales projection will be in detail. It should include projections for each month, quarter, and year. Try to determine whether the financial forecast is indicative of a continual increase over a specific period of time.
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5
Examine the summary of the financial data to see what is the specific date mentioned by the owner of the company that profitable earning will take place. See if there is any point where the company will break even in terms of finances. Estimate from where the income will be generated. Inspect the profit and loss statement, as well as the cash flow.
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Tips & Warnings
Search the Internet for information on the industry that the company falls into, and see if the information contained in the business plan for that industry is correct.
Pay close attention to the company description, legal entity of the business, and sources of financing for the company.
