Business plan

50 Questions Your Business Plan Should Answer

SFortunately, most investors don’t read business plans. However, writing one is the only way to answer the following 50 questions an investor will ask you:

1. What is the price of your product or service and why?

2. How much capital is needed to execute your business plan?

3. How much is the business worth?

4. What existing products/services does your business offer?

5. What is the use of the product?

6. In summary, what is the historical financial performance of the company (even if, and perhaps especially if, you have no turnover)?

7. On a summary basis, what is the projected financial performance of the business?

8. What new products/services are being developed and when will they be ready to go to market?

9. What is the market size of your product in dollars?

10. What is the size of the market in terms of units?

11. How has the market for the product/service changed over the last 5 years and why?

12. How do you think this will change in the future?

13. How fast is the market for your product growing?

14. Is the competition highly concentrated or highly fragmented?

15. What is your distribution channel and why is it the best?

16. In general, what are the elements of your marketing strategy?

17. How much does lead generation cost and what is the relationship between leads and sales?

18. What funding is allocated to the development of new products from ongoing funding and operations?

19. How many potential clients did you talk to?

20. What are the gross and margins of your product/service? Why are they superior or inferior to a competitor?

21. What are your assumptions about bad debts and the collection period for unpaid debts?

22. What are your working capital needs once sales start and how will these needs be met?

23. What will happen to gross and operating margins as sales increase and why?

24. What percentage of your sales is recurring?

25. Who are your top five leaders and what is their professional and educational background?

26. What regulatory or legal threats are there?

27. Are there international markets for this product and is the company able to capitalize on them?

28. Who is the biggest competitor in your industry?

29. What criteria will be used to choose locations for geographic expansion?

30. How will you get this product into mass market distribution channels?

31. Is the product/service patented?

32. Who are your suppliers and/or vendors?

33. Do you have more than one for each supplier/vendor of your raw materials or basic services?

34. What are your terms of payment with vendors or suppliers?

35. What will drive the improvement in gross and operating margins as volume increases or decreases?

36. Where is the business located and how many square feet does it rent or own?

37. How long is the sales cycle?

38. How did you estimate returns and payouts?

39. How are sales staff compensated? Encouraged?

40. What is the industry standard for R&D expenditure as a percentage of sales?

41. What is the earnings multiple of public companies like yours?

42. What are your immediate marketing goals?

43. Does the company have a board of directors or advisers?

44. What is the ownership structure of the business? Who else owns it?

45. How has the business been funded to date? What other financial transactions have taken place in the past?

46. ​​Has the product generated any publicity? Where?

47. What is the age of current liabilities on the balance sheet?

48. Who prepared the historical financial statements and have they been compiled, reviewed or audited?

49. Are there cyclical sales?

50. What are the competitive advantages of your products?

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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