Problem
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.
1. 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.
2. A five-year revenue projection and illustrate how you have come up with the projected numbers.
3. A five-year pro forma P&L statement and justify your assumptions within the statement.
4. A five-year pro forma cash flow statement and justify your assumptions within the statement.
5. 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).