It is extremely important that your financial
projections fully support the amount of funds you
are seeking. If you are seeking debt financing your
request must be very specific. Lenders frown upon
you having to come back to ask for more, because you
underestimated. Investors may not be inclined to
keep your management team in place if you can't
make the funding work.
Downside Planning
Take the time to plan for the downside. It is far
better to over estimate your capital requirements
than to run short and be forced to go hat in hand
back for more.
Supportable Assumptions Both Lenders and Investors are going to want
to know that you have reasonably estimated and
supported your costs and projected revenues. Your
financial pro forma should include detailed
information and trade references on the costs of
each expense you list.
Association Documentation
In your income projections be sure to include Trade
Industry support information or other market
information that lends credibility to the
conclusions you have drawn. Most associations
publish reports of standard industry costs, margins
and financial ratios.
