business plan help

i am writing my business plan now so i can qualify for a loan but im having some trouble. I need to put in my plan my projected income for my business, well my business will be a social networking site where my income will rely on selling ad space. How can i go about predicting the amount of money i will make. Should i provide exact figures or what? Can someone with experience with this please help me asap?

Thanks alot

 

Even if your business wasn't online, there still wouldn't be any way to know how much money you can make in any new business. It takes time to build up a customer base.

Best bet would be to under estimate what you will be making. Do a ton of research of other sites similar to yours and see what they are making and how long it took them to make it. Then find out what they did to make it.

 

Can you provide them with an estimated cost of the ad space? That way, you can tell them how many advertisers you're targeting for x amount of dollars a month.

 

ok thanks alot, i will do that instead. Also does anyone know if you have to have employees in order to be taken seriously and get a loan.

 

No, Employee's should not matter with getting a loan.

 

Any business plan forecasts are pure guesswork, but you have to base those estimates on proper research, like Fewski said, research similar sites and see what they did in the beginning and then under estimate based on the facts that you can present to a bank or VC as evidence of research. Investors love appendices in your BP's, it shows that you have done your homework.

You should also do what add_cents said too tho, estimate the numbers that you are targeting, and explain how you are going to get there, more research i'm afraid.

As for needing employees, I dont think that having employees before you open is good business practice. You would be paying money for salaries without having an income to cover them, hence already making a loss which you would have to recover. However, if your research demonstrates a need to have employees before you open, either for administrative, marketing or development purposes then, of course, you would be able to demonstrate that need and so would be acceptable to any investor.

An investor needs to see that you have done your research, and that you have, or are willing, to invest a large amount of your own money into the idea. Also, they want to see that you are capable of delivering the goods, that their investment is a viable proposition for them and that they would see the ROI that they hope to.

The more detail you put into your business plan, and the more research you do will help you in that, the more likely it is that a bank or VC will invest in your idea. I am assuming that you are going to a bank, "so i can qualify for a loan", most banks will only match the amount of investment that you are putting in, and would want some sort of security even if your idea is a "dead-cert" (i dont think there are too many of those in business, it takes hard work and dedication).

 

can someone review my business plan so far and tell me if its good so far? sounds professional , etc...

 

You said "loan", so that’s with a bank normally... Banks don’t care about Employees, they have no market value.

Banks will look at what you have that has a market value, real estate, etc. I worked for an IT company that did 250k a month and had around 15-20 employees, and they could not pull a loan out of the bank, due to that they had nothing that had a market value other than computers.

Since you’re a starting a biz, and your probably have nothing that has a market value that is owned by the company, then you will be looking at pulling the loan under your personal and using something that you have as collateral.

If you’re going to write your biz plan for an Angel than you will need to make your plan sell, show them the money, and get them excited about what you’re going to be doing.

They also like to see your background, education, as well as, any partners background and education.

CVs look for bigger investments, but want a larger percent. Most say if its less than 2 million most CVs will not be interested.

Its best to Inc, or LLC before you start asking for money, because this shows that your one already building your corp structure, and not some hillbilly just trying to pickup some pocket change on an idea, without knowing anything about running a biz.

LLCs have a limit on how many investors can hold membership in the company, while Inc are unlimited, and that will also tell your investor what are your plans in the long run.

Hope that helps!