We can work on Developing a business model.

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. 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.

find the cost of your paper
facebookShare on Facebook

TwitterTweet

FollowFollow us

Sample Answer

Business Model

The business model of my venture company is to provide a subscription service for educational content. Subscribers would have access to a library of online courses, tutorials, and other learning resources on a variety of topics. I have selected this business model because it is a scalable and recurring revenue model. Once I have created a library of high-quality content, I can continue to add new content and subscribers over time without incurring significant additional costs.

Full Answer Section

Five-Year Revenue Projection

The following table shows a five-year revenue projection for my venture company:

Year Revenue
1 $100,000
2 $500,000
3 $1,000,000
4 $2,000,000
5 $5,000,000

I made the following assumptions in generating this projection:

  • I will acquire 1,000 subscribers in the first year and grow my subscriber base by 50% per year thereafter.
  • Each subscriber will pay a monthly subscription fee of $100.

Five-Year Pro Forma P&L Statement

The following table shows a five-year pro forma P&L statement for my venture company:

Year Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income
1 $100,000 $25,000 $75,000 $50,000 $25,000
2 $500,000 $125,000 $375,000 $250,000 $125,000
3 $1,000,000 $250,000 $750,000 $500,000 $250,000
4 $2,000,000 $500,000 $1,500,000 $1,000,000 $500,000
5 $5,000,000 $1,250,000 $3,750,000 $2,500,000 $1,250,000

I made the following assumptions in generating this P&L statement:

  • Cost of goods sold will be 25% of revenue.
  • Operating expenses will be 50% of revenue.

Five-Year Pro Forma Cash Flow Statement

The following table shows a five-year pro forma cash flow statement for my venture company:

Year Cash Flow from Operations Cash Flow from Investing Cash Flow from Financing Net Change in Cash
1 $25,000 ($100,000) $100,000 $25,000
2 $125,000 ($50,000) $500,000 $625,000
3 $250,000 ($100,000) $0 $150,000
4 $500,000 ($200,000) $0 $300,000
5 $1,250,000 ($400,000) $0 $850,000

I made the following assumptions in generating this cash flow statement:

  • Cash flow from operations will be equal to net income.
  • I will invest $100,000 in the first year to create my content library.
  • I will not need to raise any additional financing after the first year.

Conclusion

I believe that my business model is sound and that my financial projections are realistic. I am confident that my venture company can be profitable within five years.

This question has been answered.

Get Answer

Is this question part of your Assignment?

We can help

Our aim is to help you get A+ grades on your Coursework.

We handle assignments in a multiplicity of subject areas including Admission Essays, General Essays, Case Studies, Coursework, Dissertations, Editing, Research Papers, and Research proposals

Header Button Label: Get Started NowGet Started Header Button Label: View writing samplesView writing samples

Custom Written Work

Guaranteed on Time

Achieve the Grade You ordered