CHAPTER 7 - WHAT AMOUNT DO YOU NEED?
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.
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.
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.
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.
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